For the Housing Crisis, Cities and States Need Each Other

Constructive relationships and complementary policies are emerging in the quest for affordability.
April 8, 2019 AT 6:15 AM
Several apartment buildings line the streets in Los Angeles, Calif. (AP)
By Christiana K. McFarland  |  Contributor
Research director for the National League of Cities

The state of California is taking the reins to remedy its acute housing shortage with proposed zoning standards for housing construction near job and transit centers. But not everyone is on board. Some city leaders and housing activists call the effort a one-size-fits-all mandate that undermines local authority and allows developers to profit while doing little to meet affordable-housing goals. The tension in California, like places across the country, is as much about who leads -- cities or the state -- as it is about the solution itself.

Given the great resources needed to make a dent in the problem, the cross-jurisdictional nature of housing markets, and the sometimes-fierce local opposition to increased density, state support of housing affordability is vital. However, the need to mitigate neighborhood impacts such as residential displacement, to engage communities in meaningful compromises, and to nurture cultural shifts toward acceptance of all housing types (and people) means that city leadership is also critical.

In other words, neither cities nor states can do it alone. So where do we go from here?

While conducting research with state municipal leagues on local tools to address housing affordability, my colleagues and I uncovered cases where a commitment to ensuring that all people have a place to call home has compelled constructive relationships and complementary policy positions between cities and their states.

Seattle's new Mandatory Housing Affordability (MHA) ordinance, for example, demonstrates a model that is grounded in local leadership but with state guardrails. Under state law, cities can mandate affordable housing only if developers are granted something of equal value in return, such as a tax incentive or zoning changes to allow taller or larger structures. MHA offers zoning changes that increase capacity to build in designated growth areas. The state zoning requirement serves the city's policy goal of creating more housing options overall while providing a degree of political cover to local officials to promote density.

The culmination of more than 200 community meetings and dozens of public hearings, this ordinance represents years of debate, trade-offs and compromise -- all of which resulted not only in unanimous approval by the city council but also a cultural shift in how residents perceive the role of zoning in everyday life and inclusive growth. Yet no one is suggesting that MHA is a perfect solution. "This is a significant step that will have lasting impact, but it is not enough," said Seattle City Council member Teresa Mosqueda. "We will continue to acknowledge and dismantle the legacy of racist redlining and historical exclusionary land use and zoning policies."

As housing pressures mount in Minnesota, state Rep. Brad Tabke, a former mayor of the Twin Cities suburb of Shakopee, is leading an effort to transform state tax liabilities into funding for local affordable housing. The proposed Minnesota Housing Tax Credit Contribution Fund would allow residents and businesses with tax liabilities to receive a tax credit if they contribute to a statewide affordable-housing pool or to specific development or rehabilitation projects in their communities. Modeled after a successful North Dakota program, the bill is receiving rare bipartisan support and the backing of regional organizations, business leaders and local-government leaders. It would be of particular benefit to smaller and more rural communities that have less access to federal tax-credit programs and state resources.

In Utah, rapid population and economic growth prompted cities to work with the legislature and the state Commission on Housing Affordability to develop Affordable Housing Modifications legislation. The goal of the new law is not only to increase housing options for all incomes in high-growth areas but also to promote regional integration of housing and transportation. Under the legislation, for cities to be eligible for state transportation dollars they must include moderate-income housing components into local general plans.

"Cities do not control the cost inputs of housing such as land, labor, materials and tariffs, or the profit that a developer can make from building one type of housing over another," said Cameron Diehl, executive director of the Utah League of Cities and Towns. "The new legislation leverages the most powerful housing-affordability key that cities do hold -- planning -- while not punishing them for what they do not control." The state established a minimum set of requirements for cities -- a "floor" -- but collaborated with local governments to develop some two dozen options for how they can approach the housing mandate in ways that consider local circumstances.

Despite agreement that housing affordability is a defining crisis of our time, answers have not come easy. The push and pull of "who leads" has slowed advancement of solutions, while millions continue to struggle to find affordable homes near job opportunities. But promising policy initiatives from places ranging from Seattle to Minnesota to Utah demonstrate that cities and states can leverage their respective strengths to forge more collaborative, effective and sustainable housing policy solutions.