Biden Administration Takes Aim at Local Housing Regulations

A lack of adequate affordable housing has been on the Biden administration’s task list for some time. The Economic Report of the President sent to Congress this month has an entire chapter on the topic, called Increasing the Supply of Affordable Housing. In that context, the White House suggesting something unusual — using tactics to affect local land-use regulations and zoning restrictions.

The chapter begins with some acknowledgments of the challenges to affordable housing, including that there is an estimated national shortage of 1.5 million to 3.8 million homes due to, in part, “land-use regulations and zoning restrictions that limit what can be built.”

“While some land-use regulations can be a reasonable part of community planning—for example, keeping factories away from schools or ensuring that parks are situated near residential areas—many other building regulations—for example, limiting housing density and building heights, or imposing minimum lot sizes or parking requirements—can create artificial barriers that hinder growth and drive up the cost of housing,” they wrote. “These policies arise naturally from a local decision making process that is influenced by homeowners, who prefer higher home prices, and account for the local costs of increased housing, such as more congestion, but they fail to account for any regional or national benefits. This classic market failure negatively affects individuals in neighboring communities and potential new residents.”

The emphasis is on how federal policy can create change, and that means changing local effects. “For example, public funds could be tied to zoning reforms and used to reduce financing constraints for affordable housing developments, and workforce training could increase the supply of labor used to construct housing,” they write. The Pathways to Removing Obstacles to Housing (PRO Housing) program sponsored by the Department of Housing and Urban Development is one example, awarding $85 million in competitive grants to communities that look to remove barriers to affordable housing.

“Zoning reforms that are likely to increase housing supply include allowing more multifamily housing to be built (especially near public transportation hubs), legalizing accessory dwelling units (ADUs), and eliminating minimum parking requirements, minimum lot sizes, minimum square feet requirements, and density restrictions,” the report said. “None of these reforms prevent new single-family home construction; rather, the changes prevent municipalities from requiring only single-family homes.”

However, such efforts don’t necessarily deliver as promised, like a Department of Transportation program to provide transit-oriented loans for housing not having closed on any housing projects and using an extremely long 18-to-24 month approval process.

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