New Housing in High-Productivity Metropolitan Areas: Encouraging Production

Date Published: 
September 22nd, 2021

In a report published by HUD’s Office of Policy Development & Research (PD&R) earlier this summer, researchers discuss the state and local regulatory barriers to increasing the overall stock of housing in the nation’s highest productivity metropolitan areas while also offering strategies and examples of community-based solutions.

The widening gap between housing supply and demand has exacerbated cost burdens for renter households across the country, especially in already high-cost areas. But while this report makes the distinction that not all high-productivity metropolitan areas are high-cost, trends show their housing costs are on the rise and will become more unaffordable absent any actions to implement mitigating strategies and policies to increase their supply of housing. If they choose not to enact innovative approaches, these areas will continue to see costs of low-price homes and rental prices increasing faster than prices for high-price homes. The report makes clear that this type of constrained housing market, combined with a lack of affordable housing options, will inevitably prevent people from accessing higher wage opportunities, resulting in potential lower economic growth over time.

Below is a list of state and local strategies provided in the report to encourage housing production in high-productivity metro areas:

  • Gentle Density – ease zoning restrictions to build more missing middle housing options, like accessory dwelling units (ADUs), duplexes, quadruplexes, courtyard apartments, and townhouses.
  • Convert Commerical Properties – adapt and rehabilitate underutilized or abandoned commercial properties into residential units to enable lower cost production through existing structures.
  • Transit-Oriented Development – focus on integrating and coordinating housing production around transportation hubs to increase density and encourage use of low-cost and environmentally friendly transport.
  • Improve Development Processes – reduce costs by allowing for more flexible design standards, relaxing restrictive dimensional requirements for housing developments, and limiting permit approval and development review times.
  • Community Engagement – limit the power of NIMBYism by implementing more equitable and expansive outreach strategies to engage stakeholders with more diverse backgrounds and perspectives.   
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