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A $10 billion proposal in the president's budget would use federal grants as an incentive to spur changes with the local rules, which critics blame for stifling affordable housing and fueling racial inequities.
In a little-noticed move, President Biden is ramping up his push to get local governments to relax single-family zoning laws, a type of land-use policy that many critics blame for restricting the supply of affordable housing and that the president’s own economic advisors have said “systemically discriminated against Black families.”
Biden in his March 26 budget request for the next fiscal year called for creating a $10 billion state and local grant program meant to encourage and support zoning changes that would allow more kinds of housing to go up in what are often largely white and wealthier neighborhoods.
The proposed funding would dwarf a similar plan embedded in the president’s now-derailed Build Back Better package. The earlier initiative checked in around $1.7 billion. The funding Biden has floated in his 2023 budget for the zoning-related program totals roughly six times that.
In another shift from the earlier domestic spending legislation, Biden’s new proposal would pump federal funding for affordable housing, road, water and sewer improvements to those communities willing to revamp zoning codes. Money would also be available for costs like research and technical assistance to help places working on changes.
To win approval, the proposals in Biden’s budget need enough support to clear Congress, including in the narrowly divided Senate. Some lawmakers in both parties have shown interest in wading into zoning issues, including with legislation of their own. But the odds that a major, new federal program focused on zoning will be enacted into law are far from clear.
Still, the attention the issue is getting is notable. Zoning and residential land-use policies are typically dealt with at the local level. Talk of federal intervention comes as many cities around the nation deal with major affordable housing shortages, and as the Biden administration and Democrats seek to address racial inequities across a range of policy areas.
Despite all that, some experts question how far a program like what Biden is proposing could go towards increasing access to affordable homes. And, during his time in office, former President Donald Trump took a stance on zoning that was in many ways opposite to Biden’s, an indicator of the Republican opposition that could emerge to proposals like the one from the White House.
‘Reward for Doing the Right Thing’
At a time when states and localities are struggling with a lack of affordable housing, the lure of more federal dollars could be enough to nudge governments towards zoning changes. Places like Minneapolis and the state of Oregon already moved in recent years to eliminate what many critics call “exclusionary zoning,” notes Mike Kingsella, chief executive officer of Up for Growth, a national advocacy group pushing changes in zoning policies.
By offering to direct extra money to places that move to overhaul their land-use rules, Biden is pursuing a “carrot” approach—one that differs from the more “stick”-oriented plans proposed by some congressional Democrats. For instance, Sen. Cory Booker, of New Jersey, and Rep. Alexandria Ocasio-Cortez, of New York, have gotten behind the idea of withholding federal transportation funding from cities that continue to allow single-family zoning.
Tracy Hadden Loh, a Brookings Metro policy fellow specializing in housing policy, sees some promise in the new Biden plan. “It’s like a reward for doing the right thing,” Loh said.
Single-family zoning often establishes minimum lot sizes and calls for one house per property. The practice has been criticized for driving up housing prices by stifling the construction of more homes, and for putting up barriers to low-income people and people of color moving into safer communities with such benefits as better schools.
The Biden administration has focused on the issue throughout the president's time in office.
“For decades, exclusionary zoning laws—like minimum lot sizes, mandatory parking requirements, and prohibitions on multifamily housing—have inflated housing and construction costs and locked families out of areas with more opportunities,” said a White House fact sheet describing his initial infrastructure proposal last year, the American Jobs Plan.
Biden initially proposed the creation of a $5 billion Unlocking Possibilities Program, aimed at incentivizing cities and states to change restrictive zoning policies by helping pay for the cost of doing that work. But after negotiations, that sum was pared back to the roughly $1.7 billion in the House-passed version of the Build Back Better plan.
The president’s budget says that the newly proposed grants would target “states and local jurisdictions that have adopted housing-forward policies and practices to remove barriers to the development of affordable housing.” In justifying the program, budget documents say that local regulations, zoning, and lacking infrastructure “pose barriers to increased housing supply.”
The proposed $10 billion in grants, according to the budget plan, would “provide additional funding to incentivize and increase the production of affordable units and housing-related infrastructure to support increased housing development, such as environmental planning and mitigation, road infrastructure, and water/sewer infrastructure.”
At the same time, the proposal makes clear it would be left to states and cities to decide what types of housing to bolster, mentioning accessory dwelling units and small- to moderately-sized multifamily development as possibilities.
U.S. Department of Housing and Urban Development spokesman Michael Burns noted that in addition to proposing funding for states and localities changing their zoning rules, Biden as part of his budget is requesting a $50 billion increase in Low-Income Housing Tax Credits, as well as $25 billion to provide affordable housing grants to states and local housing finance agencies.
But the funding aimed at encouraging cities to change their zoning policies is “signifcant,” Burns said, adding that it “goes beyond the zoning proposal in BBB. It funds the infrastructure improvements that couple with zoning changes to create the environment for more building.”
“Equity is a guiding principle of all the work we are doing, and that certainly extends to housing supply,” he added.
Kingsella said Biden’s proposal appeared to combine elements of the bipartisan Housing Supply and Affordability Act, introduced by Democratic Sens. Tim Kaine of Virginia and Amy Klobuchar of Minnesota, and Rob Portman, an Ohio Republican, and the American Housing and Economic Mobility Act, sponsored by Sen. Elizabeth Warren, a Massachusetts Democrat.
The Housing Supply bill would provide funding to support zoning changes, while Warren’s bill would provide $10 billion in infrastructure funding for cities that eliminate single-family zoning.
Klobuchar in a statement to Route Fifty praised Biden for including the proposal she’s backing. “Across the country, communities of all sizes lack affordable housing and want to tackle this issue head on, but many don’t have the resources to do so,” she said, saying it would boost the nation’s housing supply, supporting the construction of housing other than single-family homes.
Spokespeople for the Democratic chairs of the House and Senate housing committees—Rep. Maxine Waters, of California, and Sen. Sherrod Brown, of Ohio—did not respond to press inquiries.
Limits to What Zoning Changes Can Achieve
As part of a 2019 zoning overhaul, Oregon required cities with populations of 10,000 or more to allow duplexes in single-family neighborhoods. Those with over 25,000 residents were required to allow triplexes and fourplexes.
“In addition to investing in subsidized housing, we need to increase the supply of housing and diversify the types of housing we’re building,” Oregon House Majority Leader Julie Fahey, who helped to spearhead getting those changes enacted, said in a statement to Route Fifty.
Fahey pointed out that reworking land-use and zoning policies can be a heavy lift, especially for smaller communities with limited staff. “By providing grants to jurisdictions that have adopted housing-forward policies, the Biden administration can help to incentivize communities to do more to meet the housing needs in their communities,” she added.
But experts like Loh, of Brookings Metro, highlight limits with how far zoning reforms can go towards solving affordable housing shortages. “Adding supply is great,” she said. “It can reduce price pressure and have a trickling-down effect on affordability. But whether it has the magnitude to address all the gaps is not guaranteed.”
Minneapolis, also in 2019, ended single-family zoning by allowing more units on lots away from downtown that had previously been restricted to single-family homes.
“With that change, we’ve seen an increase in units where we once had single-family zoning,” Elfric Porte, Minneapolis’s Housing Policy and Development director, said in an interview.
But allowing more units to go up has created a demand for affordable housing funding that has outstripped the city’s budget. The city last year received $34 million in requests to build affordable rental units, more than twice the $16 million it was able to give. “Zoning on its own doesn’t solve the shortage in affordable housing that communities face,” Porte said.
‘Coercion, Domination and Control’
The prospect of the federal government using tax dollars to try to influence local decisions that would change the nature of neighborhoods is controversial, and Kingsella acknowledged that some cities may not be ready to take a leap on zoning, even with grants available as a perk.
Former President Trump and then Housing and Urban Development Secretary Ben Carson derided Democratic proposals to encourage curtailing single-family zoning, characterizing them as “coercion, domination and control” by the federal government, in an Aug. 16, 2020, Wall Street Journal op-ed titled “We’ll Protect America’s Suburbs.”
Democrats, they said, want to “remake the suburbs in their image so they resemble the dysfunctional cities they now govern. As usual, anyone who dares tell the truth about what the left is doing is smeared as a racist,” they wrote.
Biden’s economic advisors, however, have argued that changing zoning policies would “address persistent inequities in the American housing market.”
“The benefits could be substantial—increased access to affordable housing so that previously excluded Americans can move to areas with greater opportunity, and increased opportunities for Black families to build wealth via home ownership,” they wrote last year.
To Michael Andersen, the Sightline Institute’s senior housing researcher, Biden’s proposal raises the profile of the issue, so that eliminating exclusive zoning is seen as “a problem worthy of national, and potentially federal, attention.” Anderson, though, wondered if Biden shouldn’t also be tougher with cities resisting zoning updates.
“Sticks tend to be better at motivating local changes,” he said.
Kery Murakami is a senior reporter for Route Fifty.
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