About Those Pro-Housing Reforms

Coast to coast, the pro-housing movement has picked up major steam over the past few years as advocates rack up legislative victories that reform zoning laws and streamline development processes. According to the Brookings Institution, more than a dozen US cities and states have passed “substantial changes” to housing and land use policies over the las five years.

But are those policy reforms working? According to of the Institution’s one senior fellows, more research is urgently needed to answer that question.

“The pro-housing movement is changing rapidly, with many local and state policymakers looking to replicate reforms from early adopters,” Jenny Schuetz, Senior Fellow at Brookings Metro, writes in a new analysis. “This creates an urgent need for real-time data and analysis to inform current policy choices.”

From a design perspective, Schuetz notes that since policymakers adopt packages of housing policies, they should carefully consider the interactions between components of those plans: “for instance, legalizing apartments while capping building height at two stories is likely to make building apartments more challenging,” she writes.

In addition, “the ‘right’ policy design choices and political strategies are highly context-specific,” she says. “A given package of housing policies or regulations will have different impacts on housing outcomes (number, size, and price of new housing built) depending on the original market conditions. Similarly, how to motivate elected officials to enact housing policy changes will depend on the partisan and ideological preferences of local/state voters, the salience of the issue, and the relative power of existing political stakeholders and constituencies. Empirical studies that do not adequately account for local and/or state housing market conditions and political contexts are likely to produce inaccurate or misleading results.”

Schuetz recommends paying close attention to what she calls four major components of research design. First, clearly describing policy design and targeted housing outcomes is critical.  She notes that Minneapolis, Oregon, and California were among the first locales to pass laws legalizing structure types like ADUs, duplexes, and triplexes across the entire city or state — and says that to measure the impact of these laws, researchers should start by counting the production of such structures since. Similarly, Massachusetts’ MBTA communities law is designed to encourage multifamily development near transit.

“Traditional program evaluation often tries to evaluate the impact of a single policy change, but several recent housing reforms have included multiple different policy components (either within one bill or passed in the same legislative session),” Schuetz writes. “For example, Minneapolis increased the allowable density around transit corridors at the same time it legalized duplexes and triplexes, although the former received less attention. Oregon passed a statewide rent regulation law in the same session as the bill that legalized duplexes and triplexes, which may interact with landlords’ incentives to expand rental housing. In one sense, these multilayered policy changes complicate researchers’ task; in another sense, what matters for policymakers is the collective impact of the full set of policies.”

Another big concern: constructing timelines for implementation of policies and to gauge market responses.

“Land use is famously sticky; even a complete overhaul of zoning codes will not replace existing buildings overnight,” Schuetz says. “Researchers need to be clear about the appropriate time frame in which policies might become visible to observers…As such, the timeline for observable impacts is likely to vary across specific policy types and market circumstances. In some cases, such as the Massachusetts example, it may take years before substantial amounts of newly legalized homes are completed; this would still constitute a “successful” policy change. Other policies may produce rapid responses through unexpected channels, as how California’s ADU legislation prompted owners of existing but informal ADUs to seek certification. And some types of policy changes could induce developers to act in advance of a new policy taking effect, such as a rush to apply for building permits before a mandatory inclusionary zoning law begins.”

Schuetz also recommends considering how policy design interacts with underlying market conditions, pointing to state legislation that sets common zoning baselines across all cities and counties as an “excellent opportunity” for researchers to understand this interplay.

“For instance, under Oregon’s new law, duplexes and triplexes are legal to build in nearly every community,” she says. “But the additional density should be more economically valuable in areas where land values and rents are high, such as Portland’s affluent neighborhoods, compared to rural communities in eastern Oregon. Looking at differences in housing production across localities before and after statewide policy changes is one of the more promising areas for future research and may help illuminate which types of regulations were binding constraints in different types of housing markets.”

Finally, better data is necessary to track outcomes. ADUs, for example, are not identified by the Census Bureau’s American Community Survey or other similar metrics, making it difficult to track production of such units.

“Most local and state legislatures that passed zoning reforms have not allocated funds for monitoring and data collection,” she says. “Public data has even larger gaps when it comes to evaluating changes in dimensional requirements. For example, to understand the impact of eliminating minimum parking requirements, researchers would need to know the number of newly built homes with and without off-street parking spaces before and after the new policy went into effect. No publicly available survey collects these metrics for individual properties; even property records held by local tax assessors do not consistently indicate the presence or type of parking spaces.”

Schuetz recommends policymakers and researchers take a harder look at metros where “housing has historically been abundant and relatively affordable, but are quickly becoming more expensive,” like Austin, Texas, Denver, Nashville, and Boise, noting that “some early coordination across research teams to discuss geographic focus would be useful. ”

“ The pro-housing movement has achieved remarkable legislative victories in the past five years, creating unique opportunities to study the impacts of housing policy changes,” Schuetz concludes. “Careful empirical research can help policymakers and advocates design more effective policies—thus making housing more affordable and abundant for all Americans.”