Housing Expert Forum: What should be the interaction (if any) between state and local policies that impact housing availability and affordability?

Welcome to the BPC Housing Commission expert forum! This forum is intended to foster interactive and substantive discussion about pressing housing issues. Each month contributors from different parts of the housing sector will be invited to respond to a discussion topic.

Guest posts are shared regularly with Housing Commissioners to help inform their work.

Have a pressing question you’d like us to consider? Please leave it in the comments section. We encourage you and our expert bloggers to add comments, contributing to the national dialogue on solutions for the future of the housing sector. Expert bloggers are not members of the BPC Housing Commission. Any views expressed on this forum do not necessarily represent the views of the Housing Commission, its Co-Chairs, or the Bipartisan Policy Center.

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QUESTION: What should be the interaction (if any) between state and local policies that impact housing availability and affordability?

Seeking Solutions to Competing Problems

By Barry Rutenberg

State and local policies have profound effects on housing availability and affordability, some of which are positive while others are detrimental. State and local governments use federal housing resources, plan and zone for a diverse mix of housing, streamline development approval procedures, establish housing trusts, create programs that target specific needs and devote other local resources to housing. All of these actions clearly have positive impacts on housing availability and affordability. On the other hand, restrictive local land use policies, regulations and fees can thwart efforts to broaden housing choices and promote housing affordability. Even outdated zoning and building codes can interfere with affordable housing preservation or prevent new, more efficient construction techniques that would lower housing costs. Read the full post here.

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 Increase Local Control to Better Align Supply and Demand

By Mark Calabria

The market outcomes we observe in housing ? whether its prices, affordability, construction or sales ? are all ultimately driven by the interaction of housing supply and demand. The trend in recent decades has been an increasing divergence in which levels of government control the policy levers that influence supply and demand. Housing supply has become ever more subject to local land use policies, while demand has been driven, in large part, by federal monetary, fiscal and regulatory policies. This disconnect between federal and local policies was a direct contributor to the financial crisis. Going forward demand side policies, including funding, should be devolved to the local level so that policies impacting supply and demand can be better aligned. Read the full post here.

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 Housing Policy in Rural America

By Joe Belden

State and local housing policy is very important in rural America. This takes several forms:

• States and local jurisdictions administer key HUD programs such as CDBG and HOME, and housing finance agencies administer the Low Income Housing Tax Credit. Often HFAs will work with agencies such as USDA Rural Development on rental and other housing issues.
• Some states such as New York and California have instituted their own rural housing programs. Texas has developed special programs to help rural colonias neighborhoods.
• Many states have created housing trust funds or other programs serving both urban and rural places. E.g., Vermont created the state Housing and Conservation Board, with much of its work in rural areas.
• State programs can act as the last resort for localities that do not have local capacity. Small local governments are much less likely to have housing policies and programs, and have very limited ability to compete for federal or other funds.

Read the full post here.

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 Local Communities, Not Federal Micromanagement, Drive Economic Growth

By Angela Antonelli

The primary responsibility for addressing housing and community and economic development needs always should remain with our state and local governments. Unfortunately, while state and local communities know best what their most pressing housing and economic challenges may be, the federal government more recently had become a major impediment, rather than effective partner, for progress in meeting those challenges. Read the full post here.

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 Federal Stimulus Cannot Overcome Local Exclusionary Zoning

By David A. Smith

No single level of government can provide true affordability; any level can thwart the other levels. To our great cost, we have forgotten this, and as a result, our national housing policy has been stretched beyond tolerance, with the federal government doing too much and local government doing too little. The reason is simple algebra: A = D x F Affordability equals the product of Delivery cost times Financing cost. Read the full post here.

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 Flexibility Required to Meet Unique Housing Needs

By Michael Bodaken

State and local housing practitioners continue to translate federal funding into tangible results on the ground. While the federal government must be a committed partner in the pursuit of affordable housing, it is ultimately states and localities that are granted the flexibility to administer federal funds. This “devolution” provides a crucial opportunity to best serve the unique and various housing needs in localities throughout a nation as large and diverse as the U.S. Essentially, it should be up the federal government to set wide ranging, national housing priorities – such as prioritizing the lowest income populations – while giving individual states and localities the flexibility to develop their own plans to meet the federal housing goals. Read the full post here.

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 A Bipartisan Approach to Housing Availability and Affordability

By Kent Watkins

I think the epidemiology of the following antidote should spread across the country at every level in order for the level of cooperation and synergy that is needed for housing availability and affordability to happen. ?Changes of attitude, changes of latitude’ are far more important than duplicative, conflicting, gap-present, time-out-of-synch delivery of all programs to the key target: the neighborhood. Read the full post here.

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 Reinforce Lessons from LIHTC By

Conrad Egan

Emulate, expand and reinforce the lessons we have learned from the Low Income Housing Tax Credit Program: Simple, minimally managed federal support, guidance and regulation. Equitable allocation mechanisms. Allocation decisions at the state level. Best practices encouragement. Self-enforcing mechanisms to ensure quality performance by owners and investors. Coupling with other federal, state, and local resources. Demonstrated performance. Strong support from the investment and public communities.

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Past Forums

September 2012: What statement(s) related to housing?policy, or otherwise?would you want to hear in the presidential debates?

August 2012: What is the role of housing education and counseling in the future housing economy and finance system?

July 2012: Do alternative forms of homeownership, such as shared equity models and rent-to-own programs, present viable alternatives for future homeownership?

June 2012: What are the best options for the millions of single-family homes that may be left behind by Baby Boomers as they age, many of which are in suburban or exurban communities?

May 2012: What can we learn from current or previous efforts to link evidence-based outcomes to policy or program development?

April 2012: What lessons can the U.S. learn from housing programs, policies, or regulatory frameworks in other countries?

March 2012: How can housing policy be responsive to today’s urgent needs and simultaneously address long-term trends?

February 2012: What are some of the key characteristics of a healthy housing system? And how can the success of these features be measured?

January 2012: What should the federal government do to address the inventory of foreclosed properties?

December 2011: What are the most pressing issues in housing policy today?