Will States Force Localities to Build Affordable Housing?

“America is facing a housing shortage that has driven up prices in cities, towns and rural places,” says Sara Bronin, professor at Cornell University and founder and director of the National Zoning Atlas, the first-ever compendium of local zoning. “Experts have pinpointed zoning as one of the major culprits.”

Many localities, notably suburbs, are decidedly disinclined, however, to do much about this challenge. Typically, they hew to the principle that zoning in whatever way they choose is a bedrock principle of local control. But as the housing shortage gets worse, a growing number of states are threatening to alter that long-standing principle.   

In New York, for example, Gov. Kathy Hochul took steps in January to deal with the housing affordability crisis that’s affecting many of the state’s residents. “Seniors don’t have options for downsizing,” says Rachel Fee, executive director of the New York Housing Conference. “Young families have trouble getting a foot on the housing ladder and for millennials much housing is simply out of reach.”

The governor wanted to require growth targets for affordable housing of 3% over three years in areas close to New York City and 1% in much of the remainder of the state. She also pushed for minimum density requirements for places near transit. “The governor wanted to impose greater density on suburbs that have been the bastion of single-family housing,” explains William Glasgall, senior director of public finance at the Volcker Alliance.

The suburbs fought back with every bit of political power they could muster. And they won. The budget bill, which missed five deadlines before it finally passed on May 2, was signed into law with none of the affordable housing provisions intact.

There are several reasons why wealthier suburban areas don’t want to attract more construction, says Yonah Freemark, a senior research associate in the Urban Institute’s Metropolitan Housing and Communities Policy Center. “They don’t want to see change. They see the addition of residents to their communities as socially intrusive. And many people think there will be additional costs [like new roads and schools]. People will go out of their way to defend the status quo in almost every case.”

Additionally, while some people may like the idea of affordable housing in theory, they’re not interested in having it in their communities. This is often referred to as the as “not in my backyard” or NIMBY phenomenon.

The fight by states to override local zoning laws in the name of more affordable housing has been tried in different ways in several states including Arizona, California, Connecticut, Utah and Virginia, where Gov. Glenn Youngkin has pushed to loosen up local zoning regulations that restrict new housing. As he told a state Senate committee in August, “We must tackle root causes behind this supply and demand mismatch—unnecessary regulations, overburdensome and inefficient local governments, restrictive zoning policies, and an ideology of fighting tooth and nail against any new development."

Says Anthony Flint, a senior fellow with the Lincoln Institute of Land Policy, “Cities and towns have been restricting housing supply for many years. These statewide zoning reform measures … are aimed at opening up more places to multifamily housing development and creating more housing options than single-family homes.”

Unlike many of the most controversial issues of the day, this one cuts across party lines.  Democrats and Republicans alike have advocated for changes in local zoning laws. The pushback comes from the localities themselves, typically, the better off, more homogeneously white communities.

The question of whether new multifamily housing will raise costs and thus property taxes is unresolved, but many advocates cite a 2016 study by the University of Massachusetts that said, in part, “even though the costs associated with many of the public services delivered to new residents are borne by municipalities, there are also significant tax revenue benefits generated.”

One major battleground right now is Connecticut. The state has passed some regulations in recent years that were intended to open the door to more multifamily housing, like a 2021 bill that prohibits communities from indicating that their zoning laws should protect the “character” of the community. Whatever the intent this kind of wording may have, it’s decidedly an exclusionary, and potentially racially motivated, approach to zoning.

The current debate in the state is over the fair share housing bill, which would require the state’s municipalities to plan and zone, by July 1, 2025, for a certain number of affordable housing units. Under the bill, the state would assess the need for more affordable housing, and towns would divide that number of units up based on the needs of the region based on their own planning vision. If a town fails to meet its fair share benchmarks, enforcement elements can be triggered. For example, until the set goals are met, modest default zoning changes called for in the bill can go into effect with court approval.

Additionally, the bill tweaks a current law to encourage more multifamily housing. As it stands, a developer whose affordable housing proposal is rejected by a locality may bring a court action to allow it to move forward with construction. But under the bill, entities representing low-income families can sue if an affordable housing proposal is rejected, and, if the lawsuit is successful, a review of the town’s fair share plan is triggered.

Advocates of the bill like Erin Boggs, executive director of the Open Communities Alliance, a statewide organization focused on addressing the legacy of segregation, point to prior statutes that require “opportunities for multifamily dwellings.” But a quick glance at the National Zoning Atlas entry for Connecticut reveals that only a portion of the state’s communities allow for two-family housing and even fewer permit single-structure housing for three or more families.

Meanwhile, Joe DeLong the executive director and CEO of the Connecticut Conference of Municipalities, says his organization is opposed because “we’re against legislation that would punitively hit communities for not hitting measures” that may be unaffordable.

The bill is winding its way through the legislature now.

The state that has made the greatest advances in changing zoning laws has been California. Legislators there, however, decided not to take on the suburbs as so many other states have, but to mandate changes in zoning for commercial areas to allow multifamily housing.

Explains Assemblymember Buffy Wicks, who was lead author of the bipartisan bill that goes into effect in July, “There was a lot of challenge in NIMBYism, and passing legislation that changes zoning for residential areas can be very difficult. But we have a lot of land in California on high traffic corridors that isn’t being used to its fullest potential. There are empty vacant lots where big box retail establishments once stood and why shouldn’t that property be used for housing?”

Once the legislation takes effect, some areas zoned for offices, retail and parking would be available “by right” for 100% low-income housing. But the subsidies from the state that are necessary for building on these lots are an expensive proposition. As a result, another portion of the bill that allows mixed-income housing with a 15% affordable component that isn’t as expensive is the likelier way the legislation will be used, according to Wicks.

Chris Hoene, executive director of the California Budget and Policy Center, argues that efforts like this bill are essential. “We have a market failure in California,” he says, “and the state isn’t building enough housing for middle- and lower-income people. And local control over zoning isn’t working because there are too many places that don’t want to build middle- and low-income housing. So, while local control sounds like the right way to go, when the local policy making gets out of whack then the state has to take some control.”