The Obama White House gave cities a wish list of zoning reforms to consider Monday, warning that constraints on housing are raising prices and increasing inequality.
In a document published Monday, the administration said the “growing severity of undersupplied housing markets is jeopardizing housing affordability for working families, increasing income inequality by reducing less-skilled workers’ access to high-wage labor markets, and stifling GDP growth by driving labor migration away from the most productive regions.”
It also proposed a 10-point list of ways for local governments to reform zoning requirements and other laws to boost housing construction, including such measures as taxing vacant lots and eliminating off-street parking requirements.
The White House’s document was published amid a trend of worsening prospects for U.S. home-seekers and renters. Homeownership is at the lowest rate on record, while one-third of renters are cost burdened, in what the Housing and Urban Development secretary has called a crisis.
In an op-ed for the San Francisco Chronicle, a newspaper in one of the cities that has seen housing costs soar and push out middle-class workers, White House Council of Economic Advisers Chairman Jason Furman wrote Monday that local restrictions on housing construction have increased in recent years.
“Basic economic theory predicts that when the supply of a good is constrained, its price rises and the quantity available falls,” Furman wrote.
Constrained supply has increased inequality, slowed economic growth, accelerated gentrification, lengthened commutes and strained city resources, the report says.
As housing policy is set at the local level, the Obama administration gave cities a list of proposed reforms and encouraged them to say “yes, in our backyard” — a counter to the spirit of “not in my backyard” or NIMBYism that many experts blame for slow housing growth.
Among the recommendations are allowing developers to shortcut some of the layers of government in getting approval for projects, streamlining permitting processes, allowing accessory or “in-law” units to be added to existing buildings, establishing density bonuses, enacting high-density zoning, and creating tax incentives for building. The report also recommends “inclusionary zoning,” a requirement that new developments include low-income housing.
