Can Zoning Changes Boost Affordable Housing?
How it's working across the country.
In fighting the housing crisis, many cities and states are crafting legislation and zoning amendments that make development easier. Very often, that includes provisions specifically aimed at facilitating the development of rentals. Popular measures include streamlining processes and increasing density or cutting back on parking requirements in transit-rich areas.
In addition, states such as Florida and New York, offer tax abatements to incentivize developers to boost affordable units or convert unused office space.
“We’re seeing more of a movement toward by-right development and considering changes to codes to get back to their core mission,” said Nicole Upano, assistant vice president of housing policy and regulatory affairs at the National Apartment Association. Those changes are welcomed by developers such as Noah Hale, managing director of Fairstead, a national firm building affordable communities.
Fairstead recently closed on $120 million in financing for the development of Samuel Madden Homes, a public housing initiative in Alexandria, Va. The firm is partnering with Alexandria Redevelopment and Housing Authority and The Communities Group to build a six-story, 207-unit community to replace an older 66-unit property.
“The project involved working closely with the city to revise zoning policies and create a more supportive framework for affordable housing,” shared Hale.
ADUs Gain Traction
Accessory dwelling units are a practical way to add to the housing stock, and policies keep popping up on this front.
California’s ADU law, which took effect in 2017 and has been updated twice since, has been successful, according to David Garcia, policy director at Up for Growth. Prior to the legislation, there were fewer than 1,000 units built in the state compared to 20,000 to 25,000 being constructed per year now. As long as the plans fit city standards, any homeowner can build such a unit.
“In many states, they are the first step toward broader housing reforms because they are so widely accepted,” said Garcia, noting that Arkansas, Arizona, Montana and Washington are among states that recently legalized ADUs.
San Antonio has also made it easier to build ADUs in the past year.
“You had to go through a really kind of brutal zoning process to get that done,” commented Debra Guerrero, senior vice president with the NRP Group and multifamily chair at the National Association of Home Builders. “Now it’s by-right as long as the accessory unit is less than half the square footage of your own home. It really has encouraged the building of more of those units.”
The city also simplified the process with a website where residents can pick pre-approved designs.
Here comes the neighborhood
Authorities are making significant policy headway in places like Denver and New York City. In December, the Denver City Council approved more than 130 changes to its zoning code. The updates improve permit processing times, make it easier to build accessory dwelling units and eliminate parking minimums in downtown districts.
The New York City Council approved the $5 billion City of Yes plan that aims to build 80,000 housing units. It includes easing or eliminating parking requirements for areas with mass transit and allowing developers to build 20 percent more housing if they include affordable units.
“There are a lot of little things that will collectively have a big impact on New York City,” observed Tucker Reed, a principal with Ailanthus, an impact-housing developer with 1,500 units in its pipeline. He also mentioned accessory dwelling units, parking reductions, relief on height limits and increases in floor area ratios.
Eliminating parking for transit-oriented developments would have covered the 187-unit, mixed-income One Sunset project that Ailanthus is building with BEB Capital and SK Development in Brooklyn if it were in place sooner. The project, which will have 46 permanently affordable units, is being built atop a subway station but the team had to get a parking waiver.
Florida’s Live Local Act, enacted in 2023 to incentivize development through tools such as property tax abatements and easing zoning regulations, also tackled parking with amendments last year. Requirements were eliminated for mixed-use residential projects in transit-oriented developments and reduced by 20 percent for projects within a half-mile of a major transportation hub that has parking available within 600 feet.
The changes could help make more Live Local projects—which require 40 percent of units to be affordable—pencil, according to Jorge Navarro, attorney with Greenberg Traurig in Miami. “Parking is a very costly thing, driving project costs up.”
Tracking trends
Upano has been tracking two trends this year particularly, at state and local levels: Yes in God’s Backyard legislation and the single-stair movement. Most municipalities require apartment buildings up to six stories to have two staircases, she mentioned. Pew Charitable Trust recently analyzed fire fatality rates in four-to-six-story apartment buildings with single staircases and found it did not put residents at greater risk.
For example, Colorado Gov. Jared Polis signed a bill requiring the state’s largest cities to revise their building codes by Dec. 1, 2027, to allow for a single stairway in buildings up to five stories tall.
The other trend is YIGBY. While Ohio Sen. Sherrod Brown has introduced a federal YIGBY bill, Upano is mostly seeing legislative action at the state level. California has had a state law in place since 2023 that allows faith-based organizations, nonprofits and colleges to construct affordable housing on their land. They are by-right projects, so they’re not subject to the permitting process.
“They skip past all those hurdles that we know prevent or discourage multifamily development in jurisdictions across the country,” said Upano.
This year, bills introduced in Colorado passed in the House but failed in the Senate, while New York’s legislative session ended with no action taken.
The concept has found success in San Diego, which has had a YIGBY law on its books since 2019. Trestle Build broke ground in March on an eight-story, 78-unit low-income apartment building on a site at St. Luke’s, a church that’s part of the Episcopal Diocese of San Diego. Trestle paid the church $2.2 million for a 99-year ground lease to develop and operate the apartments.
