Ten Across
Can mayors keep their affordable housing promises?
Photo credit: Vedrana Filipović for Unsplash
Mayors face obstacles to addressing urgent housing needs —including “Not in My Backyard” sentiment.
Editor’s note: This article is part of a collaboration between APM Research Lab and the Ten Across initiative, housed at Arizona State University.
by MAYA CHARI | November 21, 2024
The high cost of living likely contributed to the Democratic party’s defeats in the recent election. Housing costs, in particular, may have cost Democratic presidential candidate Kamala Harris key Sun Belt swing states.
On the campaign trail, President-elect Donald Trump promised to reduce housing costs by slashing regulations, opening federal lands to build housing and reducing mortgage rates. He also claimed that his plan to deport large numbers of undocumented immigrants would decrease housing costs by easing demand. While the efficacy of Trump’s housing proposals remain to be seen, one thing is sure: Housing affordability will continue to be an issue that cities and their mayors grapple with.
Mayors are promising to address housing costs
Long before November, housing affordability was central to many recent mayoral campaigns. In her 2021 campaign to become mayor of Los Angeles, Karen Bass emphasized that building housing would be a top priority for her. “It’s time for change, and it’s time for urgency. We’re going to solve homelessness. And Los Angeles will no longer be unaffordable for working families,” she pledged in her inaugural address.
In Phoenix, incumbent Kate Gallego and challenger Matt Evans emphasized their plans to build more housing leading up to the November 2024 election. Both were in favor of building housing, and Evans criticized Gallego for the perceived unaffordability of housing built under her tenure.
In Houston, the cost of housing was one of the three most important issues cited by voters in the 2023 mayoral election. Jacksonville mayoral candidates also debated the issue leading up to their election in the same year.
The ability of mayors to deliver on their promises depends on everything from international trade agreements to the supply of skilled construction workers. Some things that impact housing affordability are more directly related to the purview of municipal governments, however, like zoning ordinances – and dealing with the common “not in my backyard” reactions to affordable housing proposals.
Housing costs are increasingly burdensome for renters
Rents have been rising since 2012. Until 2020, the median income of renters was rising as well, but it took a hit during the pandemic, while housing costs rose sharply. In 2023, half of all U.S. renters spent over 30% of their income on housing. One-quarter were severely cost burdened, with gross rental costs consuming at least 50% of their income.
Multiple forces have been driving increases in housing costs. In the years leading up to the COVID-19 pandemic, housing supply was already falling short of the demand created by Millennial young adults seeking to enter the market. A lack of adequate construction labor, dating back to the 2007 recession, is a frequently cited cause of this deficit, as are zoning regulations, shortages of available land and increased costs of building materials.
During the pandemic, affluent workers, able to work remotely, moved from major, mostly coastal cities to smaller cities and suburbs across the country. While housing costs remained high in coastal hubs, the new demand in other places pushed up costs and left many locations previously able to meet residents’ housing needs with a deficit.
Seeing an opportunity to profit from increased demand, large-scale investors began buying up properties in newly desirable locations at a high rate. In 2021, 24% of single-family home purchases were made by investors. These purchases were especially concentrated in Georgia, Arizona, Nevada, Texas and California. In those states, around a third of home purchases were made by private equity and other institutional investors.
Meanwhile, builders faced supply chain issues and worsening labor shortages. Supply-chain issues also led to increased inflation, which continued to rise even after the underlying issues eased, cutting into the profitability of construction projects.
As a result, housing supply now falls short of demand by millions of units.
What can local governments do about housing costs?
In 2021, the U.S. Department of Housing and Urban Development (HUD) released a report about what local governments can do to address the “burdensome regulatory regimes” preventing adequate housing supply from being built. Among the top recommendations: Lowering lot sizes.
Nearly all U.S. cities have minimum lot sizes — requirements that single-family homes be built on a certain amount of land, sometimes as much as three acres.
A majority of American municipalities adopted minimum lot sizes between 1940 and 1970. Properties with larger lot sizes were more expensive, leading to increased tax revenue. In some places large lots enabled on-site wastewater disposal, avoiding the need for a municipal solution. Additionally, the adoption of minimum lot sizes coincided with school desegregation and the migration of African-American families to many cities, suggesting racially exclusionary motives.
The city of Houston has had success using legislative reform of lot sizes to build housing and reduce costs.
Beyond mandating or allowing sub-developments with large lots, other zoning laws, which regulate which kinds of buildings are permissible to build in a certain area of a city or town, can be a major obstacle to building housing. For example, to build a type of development that does not conform with zoning laws, a developer needs to apply for a zoning change, a process that involves approval by a public body. These are called discretionary developments. Getting them approved is often a lengthy process that leads to legal challenges.
Jurisdictions can also choose to allow by-right developments, in which new housing is automatically approved if it meets all zoning and permitting restrictions. But the zoning plans in place in most cities prohibit multifamily residences from being built in the majority of residential areas, which are often restrictively zoned for single-family housing.
“It’s very difficult to change zoning laws,” said Joanna Lucio, a professor specializing in urban governance, planning and policy at Arizona State University’s School of Public Affairs. “Sometimes the mayor is able to cut through some of that a bit more.”
The HUD report also suggests that local governments have options to streamline the permit process with one-stop permitting shops, electronic plan review, online tracking, and assigning an individual to coordinate among agencies.
The battle over ED1
In her first week in office, Los Angeles Mayor Karen Bass signed Executive Directive 1 (ED1), which fast-tracked the processing, clearance, and approval of 100% affordable housing projects. The directive would allow affordable housing projects to bypass the usual lengthy approval process, which involved public hearings and environmental review.
But six months later, Bass updated the rule, stating that fast-tracking would only apply for projects outside of the 71% of Los Angeles residential areas that are zoned for single-family homes. The change stalled the building of over 1,000 housing units.
The reversal came after pushback from city and neighborhood councils, who were in turn facing pressure from enraged residents. City councilmember Bob Blumenfeld expressed concern that homeowners in his district would have their property values “cut in half.” Councilmember Nithya Raman, who supports building affordable housing in areas previously zoned for single-family housing, has faced resistance from those in her district, some of whom have protested her decision.
Why is there so much opposition to affordable housing?
The dynamic seen in Los Angeles — where local residents resist the building of affordable housing developments — is common. In theory, affordable housing is popular. About 86% of Americans surveyed by Pew Research Center support streamlining the permitting processes, as proposed in Los Angeles. In practice, however, current residents of neighborhoods tend to oppose affordable housing projects in their areas, a phenomenon that is often referred to as Not in My Backyard (NIMBY).
“It does seem somewhat universal,” said Lucio. She has studied community resistance to affordable housing in Asian countries, the United Kingdom, and Australia as well as the United States. “Residents want affordable housing. They don’t want it in their backyard. There’s fear that crime will increase, that property values will go down.”
These concerns, Lucio emphasized, aren’t well-supported by evidence. Research on the topic generally concludes that negative effects on property values — which tend to be minor even where they exist — can be prevented so long as the affordable housing is well maintained, and that fears of increased crime are unfounded. Many affordable housing projects have even been found to have positive effects on property values.
Michael Hankinson, a professor of political science at George Washington University, has researched the role of financial self-interest in residents’ attitudes towards proposed nearby affordable housing projects. He and colleague Justin de Benedictis-Kessner found that compensation, in the form of either direct financial payments or community investments, increased support for market-rate housing. However, this sort of compensation had no effect on support for affordable housing.
“We believe that our results demonstrate the calcified nature of public opinion on affordable housing. Supporters and opponents are sufficiently anchored in their opinions that they are unaffected by the levels of compensation that developers provide to neighbors,” they found.
At-large elections and affordable housing
Hankison’s research indicates that city councilors who represent a certain district are generally reluctant to act to build affordable housing, as they know that the residents of their district may oppose these developments. But the same isn’t necessarily true for mayors.
“A mayor, if they have a citywide constituency, can have more discretion in saying, ‘If I put it in this neighborhood, they may be frustrated by it, but they’re only part of my constituency and I have enough voters to help me survive the next election cycle,’” Hankinson said.
Similarly, when city councilors are elected at-large — meaning that all voters in the city elect all council members instead of each councilor representing a specific district — it is easier to build housing. Hankinson identified California localities’ shift away from at-large elections and towards a districted system as one reason it’s currently so hard to build housing in the cities throughout the state.
However, Hankinson also found that while the at-large system enables more housing to be built, it also tends to lead to a lack of representation for minority groups in cities, and a channeling of housing projects into those neighborhoods.
Hankison calls this the “supply-equity tradeoff.” He suggested proportional representation could be a way to avoid the drawbacks of each system — but proportionally representative systems are very rare in the United States.
Funding affordable housing developments
While local governments control permitting, state and federal governments also play a major role in incentivizing and funding affordable housing.
“Local governments are what we call creatures of the state,” said Hankinson. “They get their powers from the state government and the state constitution. So if the fact that it’s so hard to build housing is hurting statewide interests, states can intervene and try to incentivize local governments by withholding funds or by granting access to more funds or even overruling some regulations on the local level. California is the leading example of that.”
Beginning in 2021, California’s state government passed a slate of legislation intended to spur housing development, including allocating $22 billion for new housing and homelessness programs and allowing affordable housing to bypass local permitting processes. Cities must submit an approved housing development blueprint to fully access affordable housing funds.
Without state or federal investment, raising funds for housing can be a challenge, as affordable housing projects usually aren’t very profitable, Hankinson said. But in many states, federal funding hasn’t kept up with the need for more units.
In response to the funding shortfall, the mayor of Denver, Colorado, Mike Johnston, proposed a sales tax increase on non-essential goods to raise money for the city’s affordable housing initiative. However, the measure was narrowly rejected by Denver voters, with 51% voting against it.
The future of local governments and affordable housing
Though affordable housing developments are in fact controversial — Hankinson and de Benedictis-Kessner found that support for them hovers around 50% — anti-housing viewpoints are over-represented in local governments.
“Local elections tend to be low-turnout, low-salience affairs,” said Hankinson. “The people who are turning out in these local elections tend to be older, they tend to be wealthier, they tend to be homeowners. And if those are the people most averse to change, that’s who the city council is going to listen to. They aren’t going to listen to people who aren’t voting and aren’t turning up at these meetings.”
Hankinson said he wasn’t optimistic about the ability of pro-housing advocates to mobilize at the same scale as anti-housing advocates. Instead, he pointed towards solutions on the city and state level that could ensure that responsibilities for providing housing are spread across neighborhoods.
Lucio emphasized the importance of community involvement in softening opposition to affordable housing developments. “A lot of planners are [spending] a lot of time having conversations upfront with the existing community and talking about, here's how the design will be. It's not going to impact anything negatively — the traffic controls, the schools. We need communities that are balanced, that's better for the environment, it's better for individuals, better for the workforce. Affordable housing doesn't have to be low quality housing.”