To deal with the nation-wide housing crisis, efforts need to come from all angles – no one agency or player in the housing game is immune. This includes banks, government at all levels, wage providers, landlords, housing and other service nonprofits, developers, investors, and the like. In many cases, zoning practices enacted by local, regional, and sometimes state governments can make affordable housing that is commensurate with area wages easier to build. The following introduces seven zoning practices that have the potential to do just that.
*We use the term “affordable housing” below, and to us, this means housing that can be affordable to everyone living in a given community.
Inclusionary zoning requires a portion of new development to be affordable for people with low to moderate incomes (typically less than 60% of the Average Median Income (AMI)). Alternatively, the developer can pay a fee to waive the inclusionary zoning requirement, with these funds then funneled to support other affordable housing programs and initiatives. This method typically requires the development to keep the built ratio of affordable housing for up to 15 years, and there is potential to use inclusionary zoning on substantial housing rehabilitations as well.
Incentives and Bonuses
Density bonuses allow developers to build denser housing than what is allowed in the zoning ordinance, as long as the additional units are affordable. By allowing denser housing the developer can build more units and balance profit margins from having a proportion of affordable units. By coupling density bonuses with inclusionary zoning, the developer can further their profit margin. An incentive can also come in the form of a credit, such as on-street parking credits. An on-street parking credit is used in places with underutilized on-street parking and allows a developer to reduce the footprint of parking on-site, creating more land for housing units.
When a town enforces height, density, and other restrictions it can increase the cost of development and make affordable development difficult to achieve. Reducing barriers and allowing flexibility allows developers the opportunity to create housing in a way that is profitable for them while simultaneously meeting the needs of the community. Another concept that allows for flexibility in development is “by-right development” that prioritizes higher density housing based on demand and allows development to be “up-zoned” by one level (from R1 to R2 or R2 to R3, etc.). By-right development should occur without any additional steps in the zoning approval process, and allow a neighborhood to naturally change as needed.
Fee Waivers and Tax Exemptions
Similar to incentives and bonuses, a locality can offer reduced or excused fees and tax exemptions for developers that create a certain ratio of affordable housing. This might include exempting or excusing permitting or impact fees or property taxes. The development must keep this ratio for a specific amount of time or could risk having to pay back the taxes and fees that they were previously exempt from.
Priorities to Affordable Housing Developers
Towns and counties can give known affordable housing developers the first look at new land or development sites. These priorities increase the likelihood of affordable housing being developed. By giving affordable housing developers the first opportunity to new available sites it reduces the competition and increases the chances that an affordable housing developer will be able to create mixed or completely affordable housing options.
Overlay Zoning to reduce Single Family (SF) and Increase Affordable Housing
An overlay zone can be used to redefine the zoning regulations in specific areas. The overlay zoned district can allow the town and county to reassess their housing or economic needs and better address those needs. Overlay zones are crucial because they allow the region to address new populations, problems, and needs. Developing overlay zones allow the region to address new issues with modern solutions.
A variety of resident types (mobile homes, townhomes, triplexes and fourplexes, and AUDs, etc.)
A well-functioning forest is diverse and can manage nutrients, large storms, and support diverse flora and fauna with ease. The same is true when thinking about our communities. Providing a variety of different housing options creates options for residents of various economic backgrounds and provides a diverse labor force. Varying incomes and housing needs allow families and residence of different tastes, educational backgrounds, and incomes to be able to live in the same area. This includes bringing back once banned uses like Single Room Occupancy and Rooming Houses and removing restrictions that set firm maximum occupancy and parking requirements. It means allowing Accessory Dwelling Units (ADUs), tiny home villages, and cottage cluster zoning. It could also mean removing single-family zoning and using building form standards versus a dwelling units per acre model to ensure housing is denser, yet compatible with surrounding uses.
Theses seven concepts represent just one small piece of the complex housing puzzle. It’s important to connect with others in your community working on housing needs. One beneficial next step is to encourage your community to include or update a housing chapter in its Master Plan. This will provide baseline data and provide important direction for next steps like zoning updates, community partnerships, and other programs and incentives. And if your Master Plan is already up-to-date, the next step is to get on or start a committee to directly work through its recommendations! Good luck!