One of the key factors in the cost of housing is the availability and cost of land, which is influenced by a variety of land-use policies and regulations at the local, state, and federal levels. The effect of local land-use policy on housing affordability is not often readily understood by those outside of the home building industry.
To help make this information more accessible to the broader public and home builders alike, the National Association of Home Builders’ Land Development Committee formed a working group to study and produce educational resources on land-use policy.
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Three Land-Use Policy Primers
The result of this research is a series of three one-page primers that effectively convey a pro-housing, pro-development message. Each is an easy, 60-second read, which can be invaluable when working with people who are unfamiliar with the subject or don’t have time to dive into a longer report.
Each primer focuses on a component of land-use policy and the impact it has on builders and buyers: density, zoning, and development review.
1. Density
In many communities, zoning laws restrict the amount of land that can be used for residential purposes, often in the form of minimum lot sizes or density requirements. These laws can limit the supply of available land for housing development, as well as the number of residences that can be built on a certain plot of land. This drives up the cost of land and, in turn, the cost of housing.
Most local jurisdictions set maximum densities, usually expressed as dwelling units per acre, in their zoning standards to plan ahead for infrastructure needs. These maximums, while helpful for projecting needs driven by future growth, can limit efficient development that would provide more housing options for more families.
2. Zoning
In addition to delineating density, zoning laws and regulations determine the type of housing that can be built in a certain area. These laws arose in an effort to keep residents safe by separating incompatible land uses, such as homes and factories.
Unfortunately, residential zoning today inhibits the production of a variety of housing types that could help meet the needs of renters and many prospective homeowners. In 75% of residential areas in American cities, single-family homes are the only allowed type of housing, which leads to fewer housing choices to meet the needs of households across the economic spectrum.
3. Development Review
Development review is the process by which a city or county examines a development application to determine if it complies with the zoning code, but it is open to subjective interpretation. The result is that small-scale builders and developers are less likely to innovate since they can’t afford to risk a cutting-edge project being slowed or stopped during the review process.
Other Factors Related to Land Use That Affect Housing Affordability
There are certainly other factors that affect housing affordability in the land-use sphere. Building codes, permit costs, and policies related to the preservation of open space and natural resources can either drive up the cost of development, make it prohibitively expensive, or simply stop it entirely. These factors increase the cost of land that is available for development.
Solutions for Housing Affordability
Land-use policies that encourage or require affordable housing can help to mitigate the impact of these factors on housing affordability. Zoning and development regulations that make it easier and less costly to build affordable housing are one way to encourage production of such housing. Efforts to remove barriers to “missing middle” housing, such as duplexes, cottage courts, and fourplexes, offer another good example. The single-family built-for-rent (SFBFR) sector of residential construction is another solution to increasing housing options for more families.
At NAHB, our mission is to build homes, enrich communities, and change lives. Land-use policy plays a critical role in this mission. By dictating the availability and cost of land, as well as the cost of construction and development, land-use policies can have a significant impact on the cost of housing for individuals and families. Effective land-use policies can help to promote more equitable, sustainable, and livable communities.
The full details on these land development primers can be found at nahb.org, as well as information about single-family built-for-rent development and NAHB’s efforts to promote reasonable land-use regulations.
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