At the Fair Housing Project, we generally applaud community members who organize to get their needs better met. But this featured article in the Other Paper as part of the Vermont Community News Network begs a counter response. Continue reading Housing Equity & Preservation of Open Space
Executive Summary from the White House Housing Development Toolkit: September, 2016
[FYI Please note this toolkit was issued under President Obama’s administration.]
“Locally-constructed barriers to new housing development include beneficial environmental protections, but also laws plainly designed to exclude multifamily or affordable housing. Local policies acting as barriers to housing supply include land use restrictions that make developable land much more costly than it is inherently, zoning restrictions, off street parking requirements, arbitrary or antiquated preservation regulations, residential conversion restrictions, and unnecessarily slow permitting processes. The accumulation of these barriers has reduced the ability of many housing markets to respond to growing demand.”
Read it all here> http://tinyurl.com/WhiteHouseDevpToolKit 23 pages easy reading.
– San Francisco Chronicle http://www.sfchronicle.com/opinion/openforum/article/Reform-land-use-promote-shared-growth-of-new-9283703.php
By Jason Furman | September 25, 2016 | Updated: September 25, 2016 8:34pm
Photo: Michael Macor, The Chronicle
When certain government policies — like minimum lot sizes, off-street parking requirements, height limits, prohibitions on multifamily housing, or unnecessarily lengthy permitting processes — restrict the supply of housing, fewer units are available and the price rises.
It is no secret that cities like San Francisco, New York and Washington, D.C., face challenges in the availability and cost of housing. But policymakers and economists have increasingly recognized both the role that certain inappropriate land use restrictions play in raising housing costs — not just in major cities but across the country — and the opportunity for modernizing these regulations to promote shared growth.
Basic economic theory predicts that when the supply of a good is constrained, its price rises and the quantity available falls. In this respect, the market for housing is no different: When certain government policies — like minimum lot sizes, off-street parking requirements, height limits, prohibitions on multifamily housing, or unnecessarily lengthy permitting processes — restrict the supply of housing, fewer units are available and the price rises. On the other hand, more efficient policies can promote availability and affordability of housing, regional economic development, transportation options and socioeconomic diversity.
Research suggests that local barriers have become more restrictive in recent decades. One way to measure this is comparing the sale price of houses with construction costs. This gap typically reflects the cost of buying land — which increases with tighter land use restrictions. Indeed, the gap has increased in the past two decades: House prices from 2010 to 2013 were 56 percent higher than construction costs, a 23 percentage-point crease over the average gap during the 1990s.
Of course, many land use regulations can have benefits for communities. Environmental reasons in some localities may make it appropriate to limit high-density or multiuse development. Similarly, health and safety concerns — such as an area’s air traffic patterns, viability of its water supply, or its geologic stability — may merit height and lot size restrictions.
But in other cases, barriers to housing development can allow a small number of individuals to enjoy the benefits of living in a community while excluding many others, limiting diversity and economic mobility.
This upward pressure on house prices may also undermine the market forces that typically determine patterns of housing construction, leading to mismatches between household needs and available housing.
Improving land use policies can also create benefits for the U.S. economy as a whole. High- productivity cities offer higher-income jobs than low-productivity cities and often attract workers who move from other cities, naturally bringing more resources to productive areas of the country. But when unnecessary barriers restrict the supply of housing and costs increase, then workers — particularly lower-income workers who would benefit the most — are less able to move.
All told, this means slower economic growth: Some researchers have estimated that GDP could have been almost 10 percent higher in 2009 if workers and capital freely moved so that the distribution of wages across cities was the same as in 1964.
On the other hand, smarter land use and housing policy can promote both growth and equity. While most land use policies are appropriately made at the state and local level, the federal government can also play a role in encouraging smart land use regulations. Today, the Obama administration is releasing a new toolkit at http://bit.ly/2d4dVAc that highlights best practices that localities have employed — including streamlining permitting processes, eliminating off-street parking requirements, reducing minimum lot sizes, and enacting high-density and multifamily zoning policies — to reduce overly burdensome land use restrictions and promote mobility and economic growth.
Reforming land use policies can have important benefits for local residents and the nation as a whole, not only raising economic growth, but ensuring that its benefits are widely shared among all Americans.
Jason Furman is the chairman of the White House Council of Economic Advisers.
The insufficient supply of housing at a range of affordable prices, especially for rental housing, has important negative impacts on local economic development. Housing costs and availability impacts adequate workforce availability. The causes of high housing costs are multiple but a few factors are controllable by local municipalities, counties and regions with the understanding and political will. Exclusionary housing development zoning regulations for example fall into that category. Housing supply constraints affect local employment opportunities and wage dynamics especially in areas where the degree of zoning regulation barriers are more severe.
It’s getting much tougher to find good jobs in areas with adequate affordable housing opportunities. Even when job markets improve, the absence of strong sustained real income growth means that for more and more communities, the relative cost of housing will continue to climb at the same time the availability of adequately affordable housing is decreasing.
Research shows (see, “The Role of Affordable Housing in Creating Jobs and Stimulating Local Economic Development: A Review of the Literature” Center for Housing Policy) that adequate affordable housing in communities has benefits extending beyond its occupants to the community at large. Without a sufficient supply of affordable housing, employers and entire regional economies can be at a competitive disadvantage because of their increased difficulty attracting and retaining workers.
The excellent study referenced above provides a clear discussion of this issue. The primary thesis of the study is that developing more affordable housing in communities creates jobs — both during construction and through new consumer spending after the homes have been occupied. The positive impacts of building affordable rental housing are on par with and in many respects exceed the impacts of developing comparable market-rate units.
The take away from this is that housing affordability, inclusive communities and vibrant economic development, are intertwined in substantial ways. Communities can positively change the dynamics with various policies including favoring appropriate density in zoning laws.
Fresh news of NIMBY opposition to affordable housing comes out of … well, our own backyard.
From North Country Public Radio, we learn that residents in Plattsburgh managed to persuade the planning board to reject a proposed four-building residential complex, alleging familiar sorts of adverse effects that low-income people would have on traffic, safety, property values. 
Affordable housing is a permitted use in that district, but…
“It is transient housing,” one resident complained. “ They put people in there who are just out of jail, prison whatever until they can get back on their feet … I don’t want it in my area.”
“This concept of us serving transients is so far from reality,” countered the director of the housing organization that would be referring tenants. “The majority of the people that we serve are disabled. They are the veterans in your community. There are elderly people in your community that we serve…”
She might have also cited reports, like this one, that affordable housing can have an uplifting impact on economic development and property values.
Oh well. The developer is appealing the rejection in court. “The thrust of it was, they did not want ‘these people’ moving into their neighborhood,” the developer’s lawyer said.
Plattsburgh is in good company. Upper Saddle River, a toney community in New Jersey, is being sued for rejecting a multi-family housing complex, and thus, by proxy, new residents who happen to be black or Latino. Another interesting case of NIMBY opposition to multi-family housing recently arose in Arizona, where the “backyard” in question belonged to a mortuary! Apparently the mortuary and the developer resolved their differences, though.
NIMBYism gets some of the credit, or blame, for California’s housing-affordability crisis, and it certainly comes in many forms, as this entertaining catalogue attests. Among our favorites are “mega-mansion NIMBYs.”
Here’s a seat-of-the-pants calculation that shows one dimension of Burlington’s (and Vermont’s) affordability problem for renters:
According to Vermont Housing Data, Burlington has 9,596 rental units. Of the households living in them, 61 percent are paying more than 30 percent of their income for housing — the standard threshold of unaffordability. By that standard, 5,853 rental units in Burlington are unaffordable to the people who live in them.
(The same source reports Vermont’s rental units at 69,581. More than half the households in those units – 52.5 percent – are paying more than 30 percent. That puts the state’s unaffordable rental units at 36,530.)
Those are just the figures for the standard housing burden. In Burlington, 35.7 percent of renters are severely burdened, paying more than 50 percent of their income on housing. That works out to 3,426 rental units that, for them, are severely unaffordable (and 18,369 such units statewide).
These are unsettling numbers, and of course there’s no easy remedy or policy panacea (although doubling public funding for affordable housing and raising the minimum wage to $15 would probably help).
Inclusionary zoning – which requires a specified percentage of units in new developments to be affordable – is among the policies that can be brought to bear. For a thorough, thoughtful treatment of the subject by Rick Jacobus, a Burlington alum, click here. He points out, among other things, that “inclusionary housing is one of the few proven strategies for locating affordable housing in asset-rich neighborhoods where residents are likely to benefit from access to quality schools, public services and better jobs.” In other words, it’s fully in keeping with the renewed national emphasis on affirmatively furthering fair housing.
He also writes that “inclusionary housing has yet to reach its full potential.” That’s an understatement in Vermont — one of 13 states that has statutes authorizing inclusionary policies that virtually no municipality except Burlington has taken advantage of – and in Burlington itself, where an inclusionary ordinance has been on the books for 25 years. Over that period, the policy has resulted in only about 260 affordable units (many of them condos).
That relatively low number reflects, in part, a lag in Burlington housing development in comparison to the rest of the county. What accounts for that, and is there any way the city’s inclusionary policy could be tweaked to make it more effective? Answers to these and other questions may be a year away. The Housing Action Plan calls for hiring a consultant to review the city’s inclusionary policy and make recommendations by next fall.
Millennials become the most numerous living generation this year, outnumbering the Baby Boomers, and there’s no shortage of treatises analyzing their tastes, their world views, and their impact on the housing market. How seriously to take these generalizations, or any other thumbnail pronouncements about generations, is an open question. (For a Pew Foundation exegesis of “generations research” that finds Millennials less religious, more diverse and less conservative than their predecessors — that is, compared to Generation X, Baby Boomers and the Silents(!), click here.)
Clearly, though, people born after 1980 tend to have higher levels of student loan debt than their forebears, and fewer are buying houses as a result.
Young renters’ student debt burdens grew after the Great Recession, even as their median incomes dropped, which left them less able to qualify for a mortgage or to save for a downpayment. A new research brief from the Harvard Joint Center for Housing Studies, “Student Loan Debt and the Housing Decisions of Young Households,” lays out the details.
Nevertheless, there are commentators who see Millennials as poised to fuel a housing boom. “Millennials are making their move in the housing market,” proclaims the Dallas Morning News, quoting real-estate industry source attributing 30 percent of home sales to Millennials.
The common notion that Millennials want to live in cities is subject to dispute. More Millennials are moving from cities to suburbs than the other way around, Census data supposedly show. A survey came out earlier this year that got plenty of attention: It had 66 percent of Millennials preferring a life in suburbs, 24 percent rural areas, and just 10 percent cities.
The survey was sponsored by the National Association of Home Builders, though — an entity that would seem to have a vested interest in promoting the single-family-home-big-yard lifestyle.
But wait. A survey closer to home suggests that many Millennials really do hanker for a single-family home with a big yard. The 2014 “Young Professional Housing Survey Report,” sponsored by the Lake Champlain Regional Chamber of Commerce, asked 400 respondents (63 percent of whom were renters) what type of residence they would most like to live in, and 82 percent said single-family detached house with a yard. And most of those wanted a big yard!
Now, to the extent that these Burlington-area Millennials prefer suburban living, they do want to live in a place that’s a short commute to work, and a place where they can walk to community services.
Still, the young cohort seems to cling to the old American dream of a low-density-neighborhood lifestyle. Hasn’t anyone told them that big yards are obsolete in the Age of Climate Change?
The Greater Boston Housing Report Card 2015 is out, and it’s an eye-opener. Prepared for the Boston Foundation by the Dukakis Center for Urban and Regional Policy at Northeastern University, it’s a detailed analysis of Massachusetts’ housing-unaffordability crisis –a crisis that results, in part, from not enough housing being produced. What accounts for the insufficiency?
“We have failed to meet housing production targets because there is no way to do so given the high cost of producing housing for working and middle-income households.”
That’s from the executive summary, which goes on to make the same point in another way:
“(T)he cost of developing new housing for working and middle-income households has become prohibitive in Massachusetts. Radical remedies will be needed to overcome the barriers to housing production …”
And what are the barriers? High development costs, of course ($274 per square foot for urban projects, of which $159 is construction and $41 is land acquisition). And zoning regulations that limit density and where multi-family projects can be built.
Now, you might be thinking, what does any of this have to do with us, up here in our little, rural, unprepossessing state? Metro Boston is another world — far pricier and denser than any place around here.
Well, we’d argue that the problems that Massachusetts is facing are problems we share — albeit on a smaller scale. And remember, Massachusetts has an affordable housing zoning law (Chapter 40B) that’s arguably stronger than what’s on Vermont’s books.
Yes, it would be nice if we could get a comparable report card for housing in Vermont, but failing that, perhaps we can learn something from what the one for Massachusetts.
The report notes that “Although there is a lot of vacant land, most vacant sites are not zoned for multi-family residential development.”
As for zoning:
“Highly restrictive zoning, present in virtually every one of the state’s 351 municipalities, creates an artificially high barrier to development. It pushes developers to propose smaller projects (i.e., fewer units) and smaller units (i.e., fewer bedrooms per unit) in order to reduce the perceived impact on the neighborhoods and — in the case of larger units attractive to families with school-age children — the perceived impact on the town or city’s education budget. The complexity of getting zoning changes approved dramatically extends the development period and increases carrying and soft costs. The cumulative effect drives up both the cost of development (seen in the high level of site costs, financing, and soft costs) and rents.
“Thus, significant resistance to any change in the local community ambience has also meant that local support has heavily favored low-density, smaller projects, both of which are far more expensive to produce. Higher density housing maximizes the efficiency of land use, and larger projects create economies of scale in development and construction. Massachusetts residents opposed to zoning for multi-family housing at 20 units per acre are astounded to learn that the city of Paris — a pretty nice place to live with undeniable “character” — has a density of approximately 120 units per acre!
“When developers are given permission only to build projects of very low density, they will do so. As a result, the housing that is built will be expensive and affordable only for the very well-to-do or, if public subsidies are involved, to people with very low incomes. Working and moderate-income families will not be able to afford these units. This state of affairs, of course, causes the average cost of producing multifamily housing in the Commonwealth to increase.”
Here we note that merely increasing the housing supply (as some are advocating) isn’t going to solve the affordability problem if the added supply happens to be … luxury-scale and thus … unaffordable to all but the wealthy.
Here’s another way to look at the housing-affordability problem: as a damper on economic growth. 
Two economists published a study this summer that essentially made that point. They analyzed growth rates of 220 metropolitan areas and how those rates contributed to national growth from 1964 to 2009. They found, surprisingly, that some of the most productive cities, where pay rates also happen to be high, actually contributed less to overall growth than one might have expected. That’s because employment didn’t grow proportionately in those cities — they cite New York, San Francisco and San Jose in particular — in large part because of housing constraints.
“The main effect of the fast productivity growth in New York, San Francisco, and San Jose was an increase in local housing prices and local wages, not in employment,” write Chang-Tai Hsieh, of the University of Chicago, and Enrico Moretti, of U.C.-Berkeley. “In the presence of strong labor demand, tight housing supply constraints effectively limited employment growth in these cities.”
In other words, workers were prevented from migrating to these productive, high-wage areas because they couldn’t find affordable places to live. By contrast, three-fourths of U.S. growth in those years was attributable to Southern cities and a group of 19 other cities, where housing was more plentiful and wages were lower.
Their article has an overweaning title, “Why do cities matter? Local growth and aggregate growth,” but it’s worth noting their conclusion that the housing constraints in the productive, high-wage cities derived from restrictive or exclusionary land-use regulations. They write:
“Constraints to housing supply reflect both land availability and deliberate land use regulations. We estimate that holding constant land availability, but lowering regulatory constraints in New York, San Francisco, and San Jose cities to the level of the median city would expand their work force and increase U.S. GDP by 9.5%. Our results thus suggest that local land use regulations that restrict housing supply in dynamic labor markets have important externalities on the rest of the country. Incumbent homeowners in high wage cities have a private incentive to restrict housing supply. By doing so, these voters de facto limit the number of US workers who have access to the most productive of American cities.”
And here’s what they say about Silicon Valley, the region between San Jose and San Francisco, which has “some of the most productive labor in the globe. But … by global urban standards, the area is remarkably low density due to land use restrictions. In a region with some of the most expensive real estate in the world, surface parking lots, 1-story buildings and underutilized pieces of land are still remarkably common due to land use restrictions. While the region’s natural amenities—its hills, beaches and parks—are part of the attractiveness of the area, there is enough underutilized land within its urban core that housing units could be greatly expanded without any reduction in natural amenities. Our findings indicate that in general equilibrium, this would raise income and welfare of all US workers.”
Sounds like the technological mecca is plagued by exclusionary zoning.
The economists propose two remedies, neither of which is plausible in the current political climate. One is for the federal government to place limits on locally set land-use regulations. The other is to finance mass transit (such as high-speed trains) that would enable workers to commute to these productive areas without having to live there.
Now then, might any of this translate to Vermont? Consider:
Burlington is an analogue to San Francisco. Of the state’s 19 labor market areas, Burlington/South Burlington’s average annual pay is the highest, by far — $48,529, or about $10,000 more than half the other areas in the state.) Burlington also has an affordable housing shortage that could be termed above average: 61 percent of Burlington’s renters are house burdened (paying more than 30 percent of their income on housing), compared to a state average of 52 percent; and 36 percent are severely house burdened (they pay more than 50 percent), compared to a state average of 26 percent.
So, following their argument, might it be that Vermont would be growing at a higher rate if more workers could afford to live in or near Burlington, one of the state’s highly productive cities? Is Burlington channeling much of its productivity growth into higher housing prices and higher wages?
Perhaps, perhaps not. In Burlington’s favor is a higher rate of employment growth than (3 percent, from 2014 to 2015) than most anywhere else in the state.
On the other hand, employment here might well grow even faster if more workers from the provinces could afford to live here.