'A holy war on sprawl': States seek to shape new housing development by limiting local control

From tent cities in the traffic circles of Washington, D.C., to skid row in Los Angeles, a crisis of unaffordable housing and resulting high rates of homelessness is easy to observe nationwide. Now, a major effort is being made by state lawmakers to address the issue by forcing localities to accept new housing production.

In New York, the governor wants the state to mandate housing production from local governments and to take over control of their land use if they fail to meet the targets. In California, a bill introduced to the state Assembly on Thursday would require approval of multifamily housing developments in walkable, transit-accessible and centrally located areas.

On Wednesday, the Oregon Legislature passed a package of bills that would require cities to set housing development goals and appropriate $200 million for affordable housing development. Earlier this month, the Washington state Legislature approved a bill legalizing accessory dwelling units, also known as "granny flats," like an apartment made from a garage or basement. And the Washington state House of Representatives passed a bill last Tuesday that would allow multifamily housing units to be built anywhere in larger cities and near bus stops in smaller towns.

The trend is not just happening in blue states. Montana’s Republican Gov. Greg Gianforte has proposed legalizing duplexes and triplexes all across the state and legalizing apartment buildings in all commercial areas. And the Oregon and Washington measures have drawn broad bipartisan support.

“I would describe this as the beginning of a YIMBY moment nationally,” Alex Armlovich, senior housing analyst at the Niskanen Center, a market-oriented think tank, told Yahoo News, using the recently coined acronym for “Yes In My Backyard.” (It’s a play on NIMBY, or “Not In My Backyard,” used to describe people who oppose putting anything in their own neighborhood.)

Of course, passage of these measures is far from guaranteed. The New York proposal has sparked fierce opposition in the suburbs, and on Monday, the Arizona Senate voted down a bill that would have allowed construction of less expensive housing types such as duplexes, triplexes, single-room occupancies and granny flats.

But even most opponents of state housing mandates admit there is a dearth of affordable housing. The average costs of buying or renting a home more than tripled between 1992 and 2021, far outpacing inflation, as new construction failed to keep up with population growth. The Federal Home Mortgage Loan Corp., commonly known as "Freddie Mac," calculates a national shortage of 3.8 million homes, though some economists estimate it may be as high as 7 million.

Then COVID-19 struck and a new wave of remote workers discovered they needed more space for their home office, while the pandemic caused shortages of material and labor. U.S. home prices are up 37.3% from March 2020 as a result.

Renting is just as daunting as buying these days. Rental prices have increased an average of 8% per year since 1980. According to Moody's Analytics, the average national rent is now 30% of the median national income, up from 22.5% in 1999.

“The [housing] crisis is so bad, and it’s metastasizing, so it’s just moving it up the agenda across the country,” Armlovich said.

"There is a broad, national consensus that the United States has a housing shortage," wrote researchers at the Federal National Mortgage Association, or "Fannie Mae," in an October 2022 report. "For decades, housing production and preservation has fallen short of what is needed to keep housing affordable — particularly for low- and moderate-income renters and homebuyers."

Most economists say the main reason there isn't more inexpensive housing is that so many places have made it illegal to build. A number of studieshave found that as cities and suburban towns enact zoning codes limiting new housing construction — for example, outlawing multiple-unit apartment buildings or requiring that each house come with its own large lot and parking garage — prices rise.

When building denser developments like apartment buildings and townhouses aren't allowed, one way of meeting growing housing demand has been for new single-family homes to sprout in ever-more distant suburbs, a phenomenon known as sprawl. But in heavily built-up regions like New York City or San Francisco, there are no farms left to bulldoze for subdivisions. Instead, a housing shortage causes rising prices, population loss and "super commutes" of more than two hours from far-away small towns.

New York Gov. Kathy Hochul recently proposed adding 800,000 homes over a decade by requiring each municipality in upstate New York to increase its housing stock by 1% every three years. In the greater New York City area — the most expensive region in the country, where the average rent is a staggering 68.5% of the median household income — every city or town needs to add 3% more housing stock every three years. The state would step in and override local zoning rules that limit new housing production in any place that fails to meet the target.

That may sound extreme, but so is the problem. Over the past decade, New York gained 1.35 million jobs but just 400,000 housing units. A majority of renters in the state pay more than 30% of their income in rent, a widely used benchmark for being "rent-burdened."

“It could actually substantively affect the housing crisis in New York state, if it were to pass in its full intent,” Armlovich said. “For years people have said that to build our way out of the housing crisis in New York, we’d need a million units, and Hochul came along and said, We’re gonna build a million housing units.”

In order to minimize any uptick in New York’s traffic, air pollution and carbon emissions caused by new residents, Hochul wants to target growth around transit hubs. New York City and the inner ring of suburbs would also be required to allow at least 50 housing units per acre within half a mile of a subway or suburban commuter rail station.

Polls show that while building more affordable housing is popular in theory, most homeowners tend to oppose it in their own neighborhoods. Their stated objections are usually practical concerns (like increased traffic or competition for street parking) or worry over property values and an aesthetic preference for lower density.

The resulting local zoning codes in suburbs and some affluent urban neighborhoods tend to prevent new construction of smaller, less expensive homes, especially rental apartments. Such so-called snob zoning drives up housing costs by creating scarcity; it also worsens economic and racial segregation by preventing lower-income families from living in certain areas, studies have shown.

Sprawl increases the pollution that causes climate change, as detached single-family homes use more energy and driving longer distances burns more gasoline. Data from the CoolClimate Network at the University of California, Berkeley, shows distant suburbs have average household emissions two to three times as high as the densest inner-city neighborhoods.

In California, that’s one reason the Housing and Climate Solutions Act was introduced on Thursday by Assemblymember Christopher Ward. In addition to requiring localities to allow dense development in the urban core, it would restrict development in ecologically sensitive and undeveloped areas.

“We’re basically declaring a holy war on sprawl,” Matthew Lewis, communications director of California YIMBY, a pro-housing advocacy group that is backing the bill, told Yahoo News.

While the West Coast and New York measures come from Democrats, Montana Governor Gianforte and the Arizona bill's sponsor, state Sen. Steve Kaiser, are Republicans. And where coastal advocates talk about benefits like sustainability, Montana's and Arizona's housing reformers emphasize more conservative messages, like the right of property owners to build more on their land.

In both states, however, local governments have organized to oppose a diminution of their power over zoning, and there wasn't enough support among Republicans for the Arizona measure to pass.

Environmentalists are enthusiastically backing these initiatives because directing development towards cities and inner suburbs protects undeveloped land in the periphery and moving more Americans to walkable neighborhoods with public transit would lower the nation’s carbon footprint. In California, the Nature Conservancy is also a prime mover behind the Housing and Climate Solutions Act.

"How and where we grow our housing stock not only impacts the economy, but it has a huge and lasting impact on the environment and equity, and we applaud Gov. Hochul for seeking to address these concerns by proposing 800,000 new homes and prioritizing this development in walkable, transit-rich areas," the New York League of Conservation Voters said in a statement last month endorsing Hochul's housing plan.

Neither chamber of the New York state Legislature has included Hochul’s housing measure in their recent budget counteroffers to the governor. (In New York, most major legislation is wrapped into the state budget.) Suburban elected officials in both parties are arguing that the state should not take away local control over zoning and that allowing apartment buildings in areas near train stations currently dominated by single-family homes would destroy the suburban idyll that initially attracted residents to those areas.

“It would fundamentally change our county,” Assemblymember Ed Ra, a Republican from Nassau County, just outside New York City on Long Island, told Yahoo News. Ra gave an example of a Long Island Rail Road station near his home.

“It’s not a business district at all. It’s all single-family homes. If somebody puts together a few parcels and wants to put up a big, 50-unit building, that is completely out of the character of the community around it,” Ra said.

Instead, Ra supports the Assembly's budget, which would merely incentivize affordable housing construction with $500 million in subsidies.

“The concerning part is if you don’t hit targets there’s a state entity that can overrule,” he added. “We don’t want mandates, we think zoning is a local thing, but we should provide some incentives. I support the carrot approach rather than the stick.”

Whether or not Hochul’s housing reforms are passed this year, change is clearly afoot, in New York and nationwide.

“There is this ground-up thing that’s happening — in all these states that don’t really have anything else in common with each other — around this question of how do you actually solve these problems? Lewis said. “You cannot actually just pave infinitely into the distance and have suburbia in every direction, [and] people are realizing.”

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