America’s shortage of affordable housing has become a crisis, undermining the financial security of families and seniors, posing health risks for those facing severe housing challenges, and even holding back economic growth in cities and towns where housing for middle-income workers is out of reach. 

Recently, Up For Growth, a housing advocacy and research nonprofit based in Washington DC, published a report that concludes our country is 3.8 million homes short of meeting its housing needs – double the shortage we faced 10 years ago. And as housing grows less available, homes become less affordable, particularly for those most in need of housing stability.

This problem isn’t just growing in scope – it’s expanding geographically. What has previously been seen as primarily a problem for coastal cities is now affecting suburban and rural communities as well. Americans are feeling the pressure. In October 2021, nearly half of Americans said availability and affordability of housing was a significant problem in their community. And in ranking community concerns, housing affordability outscored drug addiction, the economic and health effects of COVID-19, and crime. Even worse, the housing shortage is having the greatest impact on America’s most vulnerable: working families, people with low incomes, and people of color.

Formal rent- and income-restricted housing programs and policies continue to be the primary tool to help low-income families cope with these pressures and – hopefully – find the security they need to thrive. However, it’s clear these programs are not enough. We need to make it easier and faster to build homes of all shapes and sizes to bring the nation’s housing supply in line with ever-growing demand. And, in addition to traditional affordable housing tools such as the low-income housing tax credit, we need to use new strategies to make housing more accessible to those who need it most.

The Up for Growth report identifies three clear challenges we need to overcome:

1: Outdated and Discriminatory Zoning Laws Are Holding Back Housing Production

While zoning is crucial for drawing the lines between industrial areas and residential neighborhoods, zoning laws have been historically wielded as a tool of exclusion, keeping out multifamily developments or preventing people of different races and income levels from joining certain neighborhoods. Many of those laws are still on the books. Limits on minimum lot sizes, square footage, building heights and more are preventing the type of growth we need to keep our country housed. 

Strategically increasing density is simply the most economically efficient and inclusive way to meet housing needs. Denser communities take advantage of existing roads, utilities and other infrastructure. They reduce sprawl that leads to long commutes and higher carbon emissions. And most importantly, they encourage vibrant, diverse communities that are more accessible to people of all income levels and walks of life. 

To meet our country’s housing needs, we must continue to combat NIMBYism, archaic zoning laws, and outdated attitudes toward density. According to research from the National Association of Home Builders (NAHB) and National Multifamily Housing Council (NMHC), NIMBY opposition to multifamily development adds an average of 5.6% to total development cost and delays delivery of new housing by an average of 7.4 months. Families that can least afford it are waiting longer and paying more due to outdated and discriminatory zoning laws. Those laws need to change nationwide.

2: Excessive Permitting Creates Delays and Adds Costs

Many of the places with the greatest need for more housing are also the places where permitting takes the longest and building is the most expensive. These higher costs contribute directly to higher home prices and rents. 

The NAHB and NMHC estimate that regulation imposed by all levels of government accounts for an average 40.6% of multifamily development cost. While permitting is crucial to protecting the environment, ensuring buildings meet ADA accessibility requirements, and more, we need to take a hard look at how we can streamline permitting to support more efficient and less expensive growth. 

It’s worth repeating: 40% – nearly half – of the cost of multifamily development goes to regulatory expenses. And ultimately, it’s not builders that foot the bill. To make a development pencil out, those expenses are passed on in the form of higher home prices and rent – a regressive tax on people who just need an affordable place to live.

3: Incentives Work, But We Need More of Them

Reducing barriers posed by zoning and permitting are crucial, but to close the gap, we need to look at the other side of the equation as well, and create tools that actively encourage growth. 

There are already some programs that are proving effective, like Seattle’s Multifamily Tax Exemption (MTFE) program. The program offers property tax exemptions on multifamily housing in exchange for a portion of the units being designated as income- and rent-restricted. As of 2021, Seattle’s MTFE program provides 8,000 apartment units at below market rates. A similar program in Bellevue, Washington has proven so popular that every eligible developer is participating. Cities nationwide need to emulate these programs and continue exploring new ways to incentivize denser growth.  

Setting our Sights on a Holistic Approach to Affordability

While affordable housing programs are – and will remain – a vital strategy for providing housing to those who need it most, reforms to zoning, permitting, and incentives have the power to bring our country’s housing supply into alignment with demand. By making homes more affordable for everyone, we can help our country’s most vulnerable families most of all.

These reforms won’t come easily. Each of these issues is wrapped up in decades of local politics, and there is no one-size-fits-all solution that can be mandated at a federal level to fix them. That means it falls to all of us to take action in our communities and advocate for common-sense changes in local policies that support more housing. 

Progress is never easy. But with smart local advocacy, we can build momentum city by city, conversation by conversation, vote by vote, creating a future where homes are affordable. Where families have the power to put down roots and build flourishing local communities and economies. Where jobs and housing grow together, reducing carbon emissions and increasing opportunity. And where everyone, regardless of age, race, income or background has a place they can confidently call home.

At Vitus, our mission is to create positive impact – one community, one family and one life at a time. Since 1993 we have partnered with lenders, investors and public agencies to preserve and extend the life of existing affordable housing across the country in markets with the greatest need. Through holistic renovation, we focus on the well-being of residents and rejuvenating the surrounding community to both improve the overall quality of each property and incorporate features that promote physical activity, community gathering and energy efficiency. To date, our team has provided stable homes for more than 30,000 residents in 29 states.