A Series of Policy Briefs on Zoning, Land Use, and a Solution to the Nation’s Housing Shortage

PDF to full ebook

The AEI Housing Center is pleased to release an ebook entitled: Light Touch Density: A Series of Policy Briefs on Zoning, Land Use, and a Solution to Help Alleviate the Nation’s Housing Shortage. Tobias Peter, Emily Hamilton, and Ed Pinto wrote it to provide an overview of current challenges in the U.S. housing market, where constrained supply and high prices are burdening household budgets and preventing people from living where their best job opportunities are located. 

Why should mayors, council and commission members, governors, legislators, planning officials, builders, homeowners, tenants, and others be interested in Light Touch Density (LTD)? 

LTD can make a meaningful addition to housing supply. If LTD construction increased enough to return to its 1940 share of the one- to four- unit housing stock all else held constant, LTD construction could be expected to contribute eight million additional housing units to the total stock over the next 20 years.

LTD’s potential is not just theory. Examples from across the country show that in places with increasing demand for housing, LTD construction is built in large numbers where land use regulations and permitting processes accommodate it. We detail examples from Houston, TX to the small borough of Palisades Park, NJ.

It is time to change the status quo and allow denser single-family development along with two-, three-, and four-unit dwellings to supplement the housing stock in current one-unit family residential areas through conversion, replacement, or expansion of existing structures. Some researchers estimate that local land use restrictions have caused a nationwide housing shortage of several million units. Reforms to permit LTD could be an important piece of addressing this shortfall.

Relative to less-dense types of housing, LTD is efficient to build. Because LTD is often built as infill development in existing neighborhoods, existing infrastructure can often fully or partially accommodate LTD construction, whereas each new greenfield unit may require tens of thousands of dollars of new infrastructure investment. LTD construction often allows for population growth close to job centers, allowing residents to live in locations where they can have relatively short commutes and where they may be able to walk or use public transit for at least some trips.

LTD construction has declined precipitously as local zoning rules have made it more difficult to build over time. In particular, two-unit or duplex construction has declined over the past several decades. Prior to the early twentieth century, real estate development was largely determined by private property owners, guided by prices for land and various types of development. Today many localities restrict the majority of their residential land to exclusively detached one-unit housing on lots that meet minimum size requirements. This hegemony is a key cause of housing supply constraints that drive affordability problems today.

Relative to one-unit zoning, LTD is a market-driven approach as it allows a broader base of landowners to better realize their land’s value by converting to a higher and better use. In parts of the country where demand for housing is high or increasing, this use may be a LTD residential structure.

By-right LTD zoning reestablishes the balance between the interests of homeowners who wish to limit change and exert control over neighboring properties vs. current and future property owners. By widely increasing development rights across what might be tens of millions of properties, the impact on any one neighborhood will be reduced relative to reforms applied to small areas.

The ebook’s five chapters provide an overview of the land use restrictions that limit housing construction and opportunities for reform based on case studies of places that have taken steps to reduce these barriers.

Chapter 1 covers important events in the history of land use regulations in the United States with a focus on the origins of single-family zoning and land use controls under the states’ police power. We show that starting in the 1920s and continuing into the 1950s, the federal government played an important role in encouraging localities across the country to adopt low-density, single-family zoning policies that still govern housing construction in much of the U.S. today. We also show how beginning in the 1950s, states and local zoning jurisdictions began enacting land use rules that went beyond setting fixed standards for land use and development density. New rules gave substantial approval power and discretion to policymakers and created a platform for interest groups to block growth.

We define light-touch density (LTD) as housing including detached single-family houses with accessory dwelling units (ADUs), small-lot single-family houses, attached single-family houses, and duplexes, triplexes, and fourplexes. We show that the widespread adoption of zoning and other land use restrictions across the country has corresponded with a declining share of LTD as a portion of the total housing stock.

Chapter 2 provides a summary of the evidence of the relationship between local land use restrictions and high housing costs. Local policymakers often face incentives to restrict housing construction, resulting in regional affordability problems and nationwide reductions in economic output and income mobility. We show that housing has become less affordable over time, and that supply restrictions in some of the most productive regions of the country are preventing people from living in the regions where their best job opportunities may be located.

Chapter 3 delves into the benefits of permitting LTD construction based on examples of states and localities that have done so. Relative to greenfield development at the outskirts of developed areas, LTD infill development generally allows people to live closer to job centers and requires less new infrastructure. Based on recent reforms to permit LTD construction, we argue that LTD may be a politically feasible approach to reducing policy barriers to housing construction. In recent years cities and states, including Oregon, California, and Minneapolis, have passed reforms that return some development rights to property owners, replacing single-family zoning with rules that permit some forms of LTD.

Chapter 4 covers ADUs. In recent years several cities and states, particularly on the West Coast, have passed reforms that make it easier for homeowners to add ADUs—like garage apartments, backyard cottages, and basement apartments—to their properties. We show that ordinances often include many barriers to ADU construction that all need to be removed to facilitate widespread construction. Under the right conditions, ADUs can provide a relatively low-cost rental option, but ADU construction alone is not enough to solve the housing affordability problems in high-cost regions.

Chapter 5 provides a case study of two-family zoning in Bergen County, NJ, with a focus on the borough of Palisades Park. We show that in localities that permit LTD construction, gradual infill redevelopment leads to an increase in housing supply and contributes to regional affordability relative to localities that maintain single-family zoning instead.

PDF to full ebook

Walkable-Oriented Development

AEI’s interactive Walkable-Oriented Development (WOD) map is designed to work in conjunction with LTD.  The WOD map details 23,000 WODs across the United States. WODs are areas within a 10 minute walk of a core set of existing commercial amenities. About 20% of all housing units are within WOD areas. By enacting LTD zoning in WOD areas, both urban and rural communities can meaningfully increase housing supply, enhance the vibrancy of their commercial districts, and boost property tax revenues.