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Land scarcity, zoning and construction: Overcoming the building challenges facing municipalities across the country

David K. Anderson
November 16, 2022 4 mins

Demand for housing in the U.S. is high, but is there enough land available to meet it? A recent article in the WSJ reported that “The U.S., a country of wide-open spaces, is short on land. Or at least land where people can live. Land-use restrictions and a lack of public investment in roads, rail, and other infrastructure have made it harder than ever for developers to find sites near big population centers to build homes. As people keep moving to cities such as Austin, Phoenix, and Tampa, they are pushing up the price of dirt and making the housing shortages in these fast-growing areas even worse.”  

In this context, land scarcity is defined as a shortage of usable land area, particularly for new residential development. The pressures of population and migration growth, a shortage of funds for needed infrastructure, and a lack of willing sellers are exasperated by restrictions imposed by municipal or county zoning moratoriums on new single-family or multi-family developments, and the desire to retain environmental preservation. 

Competing forces are at play here, and they are somewhat circular. Property owners are reluctant to sell their land, often holding out for greater returns in the future. Jurisdictions are searching for solutions to meet desired density numbers, but lack funds for new roadways and utilities. Adjoining property owners are practicing NIMBYism, fearful that new construction will lower property values. Developers are unable or unwilling to pay exorbitant land prices, with rising interest rates, and are loath to provide infrastructure the jurisdiction should provide. Finally, prospective homeowners and renters are unwilling and/or unable to absorb higher loan payments or rents and must manage the lack of public transportation.  

Managing these interrelated situations is difficult, because solving for one can exacerbate another. But it’s possible for municipal planning and zoning departments to bring relief to land scarcity. It requires positive determination and desirability for new residential developments, finding funds through bond issues and other means, and a willingness to work with developers on infrastructure, while ignoring the complaints of the few for the benefit for the entire community. 

Some cities are moving forward with change despite various hurdles 

A Brookings Institute report says that “Just as health care reform under the Affordable Care Act was designed as a ‘three-legged stool,’ improving housing affordability will require better alignment of three policy tools: reforming land use regulation to allow smaller, more compact housing; increasing taxes on expensive, underused land; and expanding housing subsidies to low-income households.” 

Putting these three approaches to work isn’t easy. Long-term homeowners tend to be engaged voters, and keeping single-family zoning in place benefits them. Mayors and city councils may want zoning reform, but they face numerous hurdles, especially if their constituents don’t support them, while state and federal policymakers don’t have the kind of direct control that can lead to positive change.  

And yet cities across the country have acted. According to the Urban Institute, “Many cities are reforming local land-use regulations to build more housing where it is needed most. This involves both building bigger (lifting height or density restrictions) and smaller (finding opportunities to build on smaller parcels of land).” Minneapolis became the first major U.S. city to eliminate single-family zoning in a bid to increase housing supply and density, reduce housing costs, and better integrate neighborhoods. Washington, D.C., approved by-right accessory dwellings units in all residential zones, and Seattle rezoned several single-family neighborhoods as “residential small lot” areas to spur denser housing. Fairfax County in Virginia eased height and density restrictions near transit stations to spur growth without increasing congestion. 

San Diego is speeding up the project approval process, including streamlining review for infill housing and other projects that comply with existing community plans. Pinellas Country, Florida, and Austin, Texas, are expediting their review processes and waiving fees if the project involves dedicated affordable housing. 

Many cities have reduced minimum parking requirements in some neighborhoods, while Buffalo, New York, Hartford, Connecticut, and San Francisco, California, have removed them citywide.  

Notes the Urban Institute: “Although evidence is growing on the need for local zoning reforms, evidence is still thin on the effectiveness of recent innovations or the conditions that drive their success. Sharing data, experiences, and outcomes among local governments will be essential to achieving smart zoning reforms that ease affordability pressures, expand housing options, and improve access to opportunity for everyone.” 

As cities seek devise much-needed solutions to these difficult zoning problems, a database of over 20,000 municipal contacts and a library of over 6,000 zoning ordinances, can play a role. Document acquisition teams can coordinate and collect zoning verification letters, zoning reports, building and zoning code violation letters, certificates of occupancy, building permits, variances, planned unit developments, site plans, zoning codes, and certificates of zoning compliance. Company reports set the standard for answering conformance questions for zoning due diligence, title endorsements, and insurance needs, and provide reliable site zoning analysis and compliance review. While we can’t put an end to the land shortage, companies can help manage other zoning challenges.  

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