Quick Links: thoughts on meeting missing middle housing demand

By Michael A. Spotts, President
@MichaelASpotts

On Friday, February 16, the NACCED Holistic Housing Podcast (which I highly recommend generally) featured Jonathan Coppage of R Street Institute. Titled "Putting the Granny Back in Granny Flat," the podcast discussion went beyond accessory dwelling units and covered a wider range of missing middle housing typologies that can create a broader, more market-based spectrum of housing affordability (a topic covered in previous Neighborhood Fundamentals commentary earlier in January and February). 

One of the key points of that discussion was that post World War II zoning codes have made many middle-density housing typologies in mixed-use neighborhoods either illegal or difficult to build. If anecdotal evidence (and evidence based on price effects) is accurate that demand for such neighborhoods is increasing, a healthy market would make such neighborhoods the "path of least resistance" from a zoning and regulatory perspective. Unfortunately, this is not often the case. 

Yet while the focus is often on use, form and density levels, last week Sarah Kobos wrote for Strong Towns about an oft-overlooked barrier to neighborhood diversification: the subdivision ordinance. The article discusses subdivision in the context of infrastructure - block length, street connectivity, dead ends, cul-de-sacs, etc. Municipalities can and should create a regulatory framework that allows or encourages walkability, adaptability and flexibility. This would put "traditional neighborhoods" back on an even playing field, and mitigate the isolation of the "islands of urbanism" developments that are sometimes built in suburban regions (in other words, the development titled "Town Center" where there hasn't been an actual town in decades). 

Subdivision ordinances can make a difference for smaller parcels or individual owners as well. Neighborhoods built to lower densities than current code allows might still struggle to evolve if the subdivision process is cumbersome. Accessory dwelling units are important to housing affordability, but that specific solution is not right for everyone. Can the owner of a 1/3 or half-acre lot near an urbanizing transportation corridor subdivide and sell a portion of the site? Can an "empty nester" interested in downsizing convert their larger home into a duplex? If the economy slides and demand for "McMansions" decreases, can they be converted into multiple apartments/condos? These are the types of activities that allow incremental evolution of a neighborhood. I would also argue that these options increase a neighborhood's economic resilience. When considering strong development policy, it is important to think beyond the zoning code. 

New for Shelterforce: Reversing the community benefits paradigm for publicly owned parcels

By Michael A. Spotts, President
Twitter: @MichaelASpotts

Last week, my former colleague Ahmad Abu-Khalaf (follow on Twitter at: @Ahmad_AbuKhalaf) an I wrote an article for Shelterforce about our past research for Enterprise Community Partners on utilizing publicly owned parcels to provide community benefits. In this article, we talk about successful public-private partnerships that have yielded positive results, but pose the question: are we missing an opportunity to more aggressively address gaps in wealth between communities and households? To answer the question, we put forward a potential new model:

What if instead, public agencies granted site control—and the ability to capture a greater percentage of value appreciation—to a mission-driven entity such as a large-scale nonprofit developer, community development corporation, cooperative, or community land trust? This community-based, mission-oriented master developer could then theoretically subcontract with market-rate developers for portions of the site from a position of strength, and ensure that the community-serving portions of the development are not marginalized. Over time, a successful development would not just provide affordable homes and community space, but it could also provide on-going dividends to the community that might otherwise flow to non-local corporations and shareholders.

For more information, read the full Shelterforce article to get our thoughts on what has worked in the past, what can be done to create a more equitable approach, and important considerations for moving a new model forward. You can also access the full Public Benefit from Publicly Owned Parcels series

People need to live somewhere: the unintended consequences of micromanaging zoning and building codes

By: Michael A. Spotts, President (@MichaelASpotts)

Yesterday, I sent a tweet thread in response to an article about potential zoning changes in Denver:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In short, Denver is addressing complaints that developers are exploiting provisions in its zoning code that allow them to build internally-facing rows of attached housing on narrow lots. These “slot homes” can result in less-than-desirable street frontage. This is not an illegitimate concern – street level activation is important for creating a quality pedestrian experience and encouraging livability. The city’s response has been to add requirements to the code that require modifications to orientation and building form, while also expanding the number of areas where such housing could be built.

As far as modern zoning compromises go, this one seems reasonable. The zoning/land use policies become more restrictive in some respects, while more flexible in others. Perhaps it will solve this specific challenge. However, I can’t help but think that this intervention fails to get at the underlying issue: the current zoning code was not accommodating current demand (in this cases, homeownership opportunities in urban neighborhoods), so developers found a work around. This reminds me of Seattle’s “apodments,” in which developers responded to sky-high demand for housing by creating “tiny” units (effectively, modernized group homes) in predominantly detached single-family neighborhoods, to much public controversy.

When I discuss the impacts of neighborhood change, gentrification and anti-displacement efforts, I try to point out that we cannot only focus on making sure existing residents continue to have a place in the community (though that is critically important). Those moving in are real people with the same fundamental need for safe, decent and attainable housing as those already there. We can’t simultaneously complain about the stereotypical “hipster millennials” still living with their parents, while decrying it when they go out and seek housing on their own.* People need to live somewhere.

Which brings us back to zoning. When demand is sufficiently high but zoning overly restrictive, it is inevitable that people will try to find ways to accommodate that demand, even if it violates the “spirit” of the rule. And when the “spirit” of the rule prioritizes form and aesthetics over the need for shelter, something has to give. If a work-around can’t be found, there are negative consequences in terms of cost-burden, overcrowding and homelessness. When developers find a way to be creative, the established (often aesthetic) preferences can be disregarded. Furthermore, once a work-around is identified, there is likely to be a rush to replicate it as much as possible before changes are made in response to neighborhood criticism. Allowing a more diverse set of building typologies (and yes, higher-density) by-right would create a “safety valve,” potentially relieving demand pressures and permitting neighborhoods to evolve in a more natural way.

Note: This is a comment on the basic ability to find shelter – there have been legitimate complaints in some cases about cultural insensitivity when a demographically different cohort moves into a new neighborhood, particularly when the new arrivals are higher-earners.

Arlington reports progress toward achieving affordable housing goals

By: Michael A. Spotts

Earlier this week, I wrote about Fulfilling the Promise, a coalition report to assist Arlington County in meeting its ambitious affordable housing production goals, as outlined in its Affordable Housing Master Plan (AHMP)

This month, the County released its annual report, Preserving our Past and Building for the Future. The report tracks the County's progress on over 60 indicators related to the AHMP. There are a number of "big picture" datapoints that are - and should be - the focus of this report: the number of units produced, rent and home price trends, homelessness counts, etc. However, there are a couple additional points should not be glossed over:

  • The level of detail in monitoring and reporting by the County is commendable. Good data is critical for identifying needs moving forward and adjusting priorities and policies accordingly.
  • Given that there is no "silver bullet" to the County's affordable housing crisis, the County is necessarily addressing issues beyond the creation of committed affordable units. In addition to accessory dwelling units and parking requirements, one initiative that deserves attention is the Arlington Landlord Partnership Risk Reduction Fund, which encourages private landlords to rent units to homeless individuals and families. Though in its early stages, such inducements could be critical to helping a greater number of vulnerable households achieve housing stability. Though not addressed in this report, this model could also be applied more generally (with a shallower level of assistance) to encourage more landlords in high-opportunity neighborhoods to accept Housing Choice Vouchers or other forms of rental assistance.

For more information on the AHMP and related initiatives, visit: https://housing.arlingtonva.us/affordable-housing-master-plan/

 

Can Arlington scale up affordable housing efforts to meet ambitious goals?

By: Michael A. Spotts

From 2012-2015, my adopted hometown of Arlington, VA held an intensive process to update its housing affordability policies, culminating in the passage of an Affordable Housing Master Plan (AHMP) and Implementation Framework. Over the course of three years, I had the honor of serving as the vice-chair of the working group that advised County staff and leadership on this effort. In the end, local advocates, County staff, and the working group were successful in building unanimous support from the County Board for an ambitious set of goals and targets. Notably, the AHMP included the goal of maintaining the County's current economic diversity through increasing the supply of affordable homes. This is a difficult task given that market pressures have significantly decreased the stock of affordable rental housing options, and affordable homeownership opportunities are few and far between.

Since 2015, County staff have worked to implement several of the recommendation included in the Implementation Framework, including recently-passed revisions to the County's Accessory Dwelling Unit (ADU) and parking policies, as well as ongoing efforts to support the preservation of market-rate affordable rental properties. While I have concerns about certain aspects of recent efforts (for example, I believe the new ADU policy is still far too restrictive), they represent steps in the right direction and further demonstrate the commitment of both board and staff to housing affordability. 

Yet achieving the AHMP's supply-related goals will require an increase in scale. Success will hinge on the County's ability to continue to remove barriers to more naturally affordable housing types (ADUs, "missing middle" building typologies), as well as dramatically increasing the production of committed affordable housing. Each individual effort takes time and political will. 

To help address the issue of scale, a coalition of housing experts and advocates was formed to identify potential policy changes that could increase the production of committed affordable units. The result is a new report - Fulfilling the Promise: Meeting the Production Goals of Arlington's AHMP. This report was presented to the County board and staff in December. The coalition offered a menu of options that the County could consider to ramp up production from current annual levels of approximately 220 units to the nearly 600 units/year that would be necessary to preserve Arlington's current economic diversity.* Importantly, these options include not just funding increases, but also cost-reduction strategies that would allow scarce resources to be stretched further. This is particularly important in the context of changes to the federal tax code that will reduce the amount of subsidy available via the Low Income Housing Tax Credit program. Policy options considered include:

  • Reducing site plan conditions for new affordable housing construction
  • Waiving permit and tap fees for affordable housing projects
  • Reducing use permit conditions for rehabilitation projects
  • Modifying bonus density policy
  • Pursuing community-serving real estate opportunities
  • Offering property tax abatements/exemptions
  • Expanding sources of funding for the Affordable Housing Investment Fund

Moving forward, members of the coalition will be available to work with County staff and board to further vet these proposals, and hopefully move closer to achieving the goals of the AHMP.

 

*If Arlington is successful in removing barriers to more production of  naturally affordable housing types, the 600 unit annual target could be lower. 

 

Multiple approaches to densification are needed

By: Michael A. Spotts

One of my New Years resolutions was to post to the blog more. While I'm not off to a great start, I'm not giving up yet.

today, I came across an article from Strong Towns contributor Andrew Price: Surprise Approaches to Achieving Density. In this article, he discusses the different forms that density can take (with pictures) and the problems associated with the tower-based all-or-nothing approach to density.

I offered my initial thoughts on Twitter (click through for full thread: https://twitter.com/MichaelASpotts/status/951851203511701504 )

Before elaborating further, I want to make it clear that I agree with the same caveat that was featured in the article. Towers can be fine, even preferable depending on the market context. Where land costs are already (and durably) sky-high, it can make sense to build up. However, it is important to avoid creating a situation - artificially through zoning - that makes high-rises the only economical form of multifamily housing. In addition to my thoughts on building costs offered on Twitter, I think it is important to add a note on the distributional impacts of this type of zoning dichotomy.

First, concentrating all density in a small area also concentrates the burden of paying for municipal services and infrastructure. The tax base supporting low-density neighborhoods can be insufficient to support the infrastructure supporting those neighborhoods. High-density neighborhoods may end up subsidizing low-density neighborhoods. In addition to concerns about the long term fiscal sustainability of this arrangement, it is even more problematic if rental housing that is home to a jurisdiction's lower-income households is concentrated in the high-density neighborhoods. This could lead to a regressive situation in which these households are actually subsidizing higher-income homeowners.

A second concern is with the balance of development across a region. By restricting development in some neighborhoods while encouraging it in others, municipalities may facilitate the concentration of capital in certain neighborhoods. While the amount of capital available for real estate development may not be firmly fixed, it is not unlimited within a market. An unbalanced approach to development and density can exacerbate wealth disadvantages and lead to disinvestment and decline in lower-demand neighborhoods that do not support high-density development. Meanwhile, as developers compete for a smaller number of sites where density is allowed and can be accommodated, gentrification can become a concern.

Therefore, while densification is often necessary  and desirable, it is important to pay attention to how it is accomplished. In general, planners would be wise to recognize the limits to predicting where demand will flow and the second order consequences of planning and zoning decisions. This calls for a diverse range of development types and density levels within neighborhoods and across a jurisdiction, allowing for multiple "paths to success," even if development does not occur as predicted. 

Beyond minimums and creative infrastructure: An incremental approach to efficiently managing parking demand for resource-constrained municipalities and developers

By Michael A. Spotts

The problems with city parking policies are well-known among people that study urbanism or work in planning and development. From the writings of Donald Shoup to Strong Towns’ annual Black Friday Parking series, it sometimes seems as if there is an emerging consensus that parking minimums are a problem that need to be addressed. We see the empty spaces, the “missing teeth” of downtown blocks, and data that shows the impact a $50,000 parking space can have on housing affordability. We have invigorating conversations with like-minded practitioners, and it raises our hopes that our argument may finally carry the day…

…until we go to a community meeting or read a neighborhood listserv after a parking reduction is proposed. In these forums we are consistently reminded of the fact that ours is the unpopular opinion, and that erring on the side of higher parking minimums is the conventional position.

In many cases it is easy to understand why. Automobile orientation is deeply engrained, and proceeds along a reinforcing feedback loop. When a place is designed for cars, fewer people use alternative modes, which increases demand for automobile oriented infrastructure, which further degrades the pedestrian experiencing, and so forth. In many contexts, it can take a significant (and costly) amount of redevelopment to reach the “tipping point” where the cycle reverses itself and walking, biking and transit are competitive options.

Which brings me to the inspiration for today’s article. Last Friday, Minnpost.com’s Peter Callaghan reported on efforts in Minneapolis to encourage parking garages to be built to standards that would allow for conversion to alternative future residential and commercial uses. This is an intriguing concept that would allow for adaptability and incremental improvement in the future. It is also a positive step in areas where the political dynamics prevent more aggressive reductions in parking levels.  All in all, I think it’s a practice that should at a minimum be explicitly enabled.

Yet while it is great that some communities are generating big, creative ideas, many communities will need to think smaller (which I do not mean as a pejorative). Setting aside the non-trivial design challenges, both the construction of the parking decks and any eventual conversion would require capital investment at a scale that is most often seen in the highest-demand neighborhoods. What can be done in places where those sums are unlikely to materialize or where surface lots are more prevalent? What about the communities with insufficient population, density or capital to hit the aforementioned “tipping point” through a big investment in transformative transit infrastructure? What are the incremental steps available to the full spectrum of communities, including those whose residents are not yet fully on-board with a more dramatic break from the 20th century parking dogma?

Luckily, there are plenty of (relatively) low cost and in some cases uncontroversial practices that can move the needle toward multi-modal mobility, either individually or in concert:

Understand the need: Communities can benefit from making a relatively minor investment in surveying both public and private parking usage. This is beneficial from both the technical (data-driven policy-making) and tactical (building political support) perspectives. Studies should focus on both on- and off-peak usage.

Better manage existing supply: Perceptions of parking shortages are informed by personal experiences. Even if data shows that a neighborhood has a slight parking overcapacity, people may not believe it if they must circle the block looking for spaces or struggle to find parking near their home at certain times. Policies and improvements that maximize the use of existing parking infrastructure can include:

  • Using differential pricing to manage demand.
  • Incorporating clear signage that directs drivers to underutilized lots/spaces.
  • Establishing fee-based street parking permits in residential neighborhoods. This can be done in a way that reserves a specific space for a resident while opening excess space for visitors. (It can also be useful in combating the perception that homeowners also own the public right-of-way.)
  • Adopting tech solutions, such as sensors connected to apps that show open spots and/or allow reservations and instant payment.
 

Make more efficient use of existing right-of-way: Many existing streets are wider than necessary for the safe flow of regular traffic. If space permits, parallel parking can be converted to diagonal parking on wider roads, or parking can be allowed on both sides (or along the center line) where none previously existed. Adding more spaces using this approach may make the removal of surface lots or reductions in parking requirements more politically palatable at a comparatively small cost. As an added benefit, narrowing streets can have a traffic calming effect, improving the pedestrian experience. Unfortunately, this approach may work best for local streets, as state and federal funded streets may have more restrictive width standards. 

 Arlington County, VA has adopted a multifaceted transportation demand management plan

Arlington County, VA has adopted a multifaceted transportation demand management plan

Manage current and future demand: As Enterprise’s Ahmad Abu-Khalaf and I wrote in a recent report, communities can adopt transportation demand management (TDM) practices, which “utilize a range of techniques such as subsidized transit passes, car and bike share arrangements and facilitating first- and last-mile connections to reduce the amount of road and parking infrastructure required. In some contexts, such measures may be more cost-effective for both developers and residents than constructing expensive parking facilities.”

Reduce regulatory barriers to shared parking: Shared parking is an approach in which a discrete number of spaces is used by multiple (often complementary) establishments to reduce the total amount of parking needed for each. This is often utilized in the context of larger-scale new construction, but municipalities should also consider removing any regulatory barriers to allowing existing property owners to lease existing underutilized spaces (especially in the context of structured parking) to developers, and have those spaces count toward the new building’s parking minimum.

Adopt “proof of parking” policies: As highlighted in another Enterprise report (co-written with John Hersey), “the suburban Cities of Woodbury (MN) and St. Louis Park (MN) allow developers to refrain from initially providing the full required amount of parking if they can demonstrate that the amount exceeds demand, provided that they can prove that the site can accommodate additional parking in the future. While the latter stipulation may prevent the addition of incremental density, landscaped areas would provide a better pedestrian experience than surface lots. Such policies could also provide data points for consideration in efforts to reduce parking minimums.” Since established uses often develop constituencies against their removal, shifting the default from parking to green/open space can also minimize demand for eventual conversion.

Facilitate “tactical” street-level activation: As the Minnpost.com article above notes, some cities already require garages to include street-level active uses, such as retail space. However, this approach may not possible or desirable in all contexts, because of political constraints and costs (or when existing garages have been constructed without such space). Municipalities can overcome this by permitting and/or encouraging temporary or semi-permanent uses to ring the inactive portions of the site. Such uses can include street vendors, food carts or trucks, landscaping and pop-up parks and/or other temporary programming. As an example, Portland, OR has several “food truck parks” that surround and activate surface parking lots. 

Allow multiple paths for adaptive-reuse: Encouraging newly constructed garages to be built to standards that allow adaptive reuse is one approach to preparing for future reductions in demand. In addition, jurisdictions may also want to consider the reverse – adopting flexible building codes or a process for waivers that could accommodate reuse of structures with standard parking garage dimensions. This may not be feasible in all circumstances (ceilings may simply be too low to generate any demand for office/residential use), but a certain level of flexibility may be appropriate given the pace of innovation in design and shifting demand. For example, underutilized parking garages could provide the low impact industrial or “maker space” enabled by modern technologies such as 3D printing.

This list is by no means exhaustive, and individual approaches may not work in all circumstances. However, various approaches do work best when coordinated. For example, launching an app to make it easier to find parking could be most effective when paired with policy shifts that reduce the amount of new parking being built. Absent a coordinated approach, some interventions could backfire by simply making it easier to drive and park.

That being said, the ideas do illustrate that much can be done while we play the long-game of working toward the bigger picture policy and consumer preference shifts that would facilitate a more equitable, multi-modal development model.

Stretching affordable housing funding further: misconceptions, challenges and opportunities

Discussing the cost of affordable housing production can be difficult. Developing and/or preserving income-restricted housing is a complex process, and questions about why things are done a certain way rarely lend themselves to quick and easy answers. Detailed, nuanced explanations and dialogue have trouble gaining traction when costly development efforts make the headlines. This is unfortunate, as the mismatch between needs and available resources makes it ever more critical that subsidy dollars are spent as effectively as possible. This post is the first in a series that will explain how to better understand cost data, identify the factors that drive costs, and highlight leading ideas and practices for lowering costs without sacrificing quality.

What to expect from the Neighborhood Fundamentals Blog and Website

Today I am pleased to announce the official launch of the Neighborhood Fundamentals blog. This past August, I posted a brief article about Neighborhood Fundamentals’ mission: providing research and technical assistance to support housing affordability, community and economic development, equitable transit-oriented development, and affirmatively furthering fair housing. Moving forward, I will be posting news, analysis and resources more frequently.

Welcome to the Neighborhood Fundamentals Blog

By: Michael A. Spotts, President

Neighborhood Fundamentals, LLC provides research and technical assistance to public, private and nonprofit institutions on issues related to housing affordability, community and economic development, equitable transit-oriented development, and affirmatively furthering fair housing.

While much of our work will focus on relatively long-term research and technical assistance projects, I will be periodically posting about important news affecting housing and communities as it emerges. You can also hear my perspective on relevant issues by following me on Twitter: @MichaelASpotts