Perspectives on Housing Research on State and Local Means on Increasing Affordable Housing Brooke Ransom Director of Industry Relations, NAHB National Conference of State Legislatures Legislative Summit New Orleans, LA July 23, 2008
About NAHB 235,000 Members 850 State & Local Affiliates Members build 80% of all new homes -2-
The Housing Affordability Problem Increasing gap between cost of housing and what people can afford to pay for it Gap forces families to: Commute long distances Pay disproportionate share of income on housing Live in housing that does not meet their needs -3-
Reasons For The Shortfall Local plans that solicit jobs but do not adequately provide for housing Outdated ordinances that limit range and mix of housing types Unwieldy development approval process Increasing fees that add to housing costs Environmental/growth controls that constrain land supply and developability -4-
The Affordability Challenge Silver Bullet Fallacy there is no single solution Affordability a multidimensional problem Different tools needed in combination and as part of comprehensive strategy to reach different income segments -5-
New NAHB Research Little comprehensive research done to date on inclusionary zoning or how other state and local approaches work NAHB has recently concluded three major research projects ABT Associates Hollister University of Maryland Reports are now available at: www.nahb.org/housingaffordability -6-
ABT Associates Study 350-page compilation of state and local means of addressing housing affordability How strategies work How they are funded Where they have been used Pros and cons of each strategy -7-
ABT Associates Study Most comprehensive report ever assembled on non-federal solutions Details numerous strategies under three broad categories: Land Use Financial Other initiatives 30 case studies of communities successfully using these tools, often in combination -8-
State And Local Approaches Plan for housing, not just jobs Regulatory barriers removal and streamlining strategies Density bonuses Vacant land assembly Land supply monitoring systems Land trusts that help buy down land and housing costs -9-
State And Local Approaches State and local housing trust funds that are broadly funded Tax increment financing, tax credits Fee waivers Employer-assisted housing programs Creative public-private partnerships Coalitions with business and housing interests -10-
ABT Associates Study Conclusions: Most successful places rely on an array of strategies Strategies that get the most press are not necessarily the most effective NAHB has also found: Many communities adopt inclusionary zoning as their key strategy Politically expedient and easier than taking a more comprehensive approach -11-
Definition Of Inclusionary Zoning "Any municipal or county ordinance or regulation that requires or allows a property owner, builder, or developer to restrict the sale or resale price or rent of a specified percentage of residential units in a development as a condition of receiving permission to construct the development." -12-
Hollister National Survey Prepared by nationally known land use attorney Timothy S. Hollister, Shipman & Goodwin LLP National perspective based on 50-state survey of state enabling authority for inclusionary zoning as well as ordinances across the country Covers 40 elements that should be carefully considered when drafting and implementing ordinances -13-
Survey Of State Statutes 13 states: expressly or implicitly authorize IZ 7 states: no express authority 2 states: prohibit IZ (Oregon, Texas) 2 states: IZ ordinance invalidated-- conflicted with state rent control laws 26 states: no express or implied authorization--dependent on home rule -14-
40 Elements that inclusionary zoning ordinances should address. General practical issues incentives and in-lieu provisions Defining geographic and type of construction applicability Resident eligibility very complex Financial information and management resale provisions, buyer equity terms -15-
National Survey Conclusion Inclusionary zoning is a complicated undertaking, one with many more moving parts and practical considerations than drafters realize.... If government proceeds with implementation, it is essential that all of the critical details be identified, addressed, and molded into a workable program." -16-
University of Maryland Research Few studies have explored potential economic effects of inclusionary zoning in academically rigorous way UMD studied deep data set from multiple jurisdictions in California over 17-year period Statistical analysis controlled for numerous other factors and influences Results all pass strong analytical tests -17-
University of Maryland Research Study Study found that IZ Failed to increased the supply of new housing Shifted production out of single family homes into multifamily units Shift increased as IZ requirements also increased Increased price of new homes by 2-3%; 5% for more expensive homes Reduced size of new homes -18-
Summary Of All Results Successful places rely on an array of housing strategies to encourage affordable housing UMD results suggest that IZ acts like tax on housing IZ is a complex market intervention that may not work in all markets and may worsen affordability for some There are better alternatives that can have a far greater impact Nature of local housing market will dictate best strategies can t simply copy from another community -19-
Where To Go For More Information Reports and resources available from: www.nahb.org/housingaffordability Contact Information Brooke Ransom Director of Industry Relations 202 266-8484 Bransom@nahb.com Debbie Bassert Land Development 800-368-5242, ext. 8443 DBassert@nahb.com -20-