An Overview of Obama’s New Housing Development Toolkit


Currently, the cost of housing in the U.S. is on a consistent rise. While this rise in home cost is good for sellers, at least from a theoretical perspective, it has its own challenges. One of the most prevalent driving forces behind the rise in housing cost is the fact that the housing industry, in many markets, has struggled to match the demand in the market. This means that while this may be a good time to sell your home, from a financial perspective, unless you already have your next home already under contract, it may be very difficult to find a new one — especially in some markets.

The fact that new home construction is down means that housing development has slowed. In fact, it would take nearly a million homes to be completed by the end of the year just to come parallel with the current demand. One of the challenges associated with the inability of developers to keep up is local barriers that slow and even inhibit housing development in certain markets. These barriers have intensified over the past three years, especially in high growth metropolitan areas. The rapid accumulation of these barriers, that include zoning, lengthy development approval processes and other land use regulations, has significantly limited the ability of certain markets to effectively respond to the increasing demand for homes.

While some of the barriers that are in place are environmentally beneficial, there are also some barriers that are clearly designed to exclude housing and multifamily dwellings. These barriers make the process of land development significantly costlier, causing housing developers to seek locations that are less expensive. In many cases, housing developers have simply backed off because the costs are so high that they threaten profitability.

The current administration has developed a housing development tool kit to help is designed to help identify which of these new regulations are designed to help improve the housing development in related areas. The idea of land development regulations is to ensure environmental protection, while promoting a responsive, healthy, affordable and high-opportunity for housing. Unfortunately, this is not always the case.

The Housing Development Tool Kit

According to the White House, this tool kit is one way that the administration wants to work with developers, local politicians and the public to break down rules that are serving as an impediment to the development of affordable and healthy housing for Americans.

The goal is to create a functional housing market that is supported by a stable economy. This is about more than creating housing opportunities. While it is definitely important to ensure that housing demands are met, it is also important to understand that when this process stalls, it negatively impacts the business arena. Business depend heavily on the responsiveness of housing markets for employee recruitment in order to facilitate growth. Additionally, a large sector of the workforce depends directly on housing developer. Some industries that benefit from a thriving housing development market include construction worker, contractors, realtors, appraisers and more. The availability of affordable housing should be fundamental in a nation, such as the United States.

While the prevalence of local barriers to housing development continues to increase in intensity, it is important to develop viable options to countering the negative impact of the barriers. By effectively engaging these barriers, the rising cost of housing development can be curbed, and new home construction should begin to increase across the board.

Barriers Being Waged

What is important to understand while a battle against these barriers is being waged on a national level, the vast majority of these barriers are being constructed at the local level. Where this dynamic is being experienced most is in those rapid growth areas where the job market is vibrant — leading to a housing demand that is significantly outpacing supply. There has been a substantial coverage on the dilemma in areas like Seattle, the Bay Area and other premium California locations, but the problem is more widespread. It can be seen in almost area in which city is experiencing economic growth. With economic growth, comes the demand for employees, which leads to new residents coming in from other locations.

The problem is that the inability to find affordable housing can quickly slow growth for companies that are finding it hard to attract new employees from other areas because of rising housing costs, or the difficulty in finding housing at all.

The presence of these negative barriers lead to the ability of developers to effectively expand in certain areas, which artificially depresses the availability of construction and the jobs related to the industry. Additionally, the rising cost of housing, with the national housing median threatening to exceed 33 percent of the median household income, has placed a substantial strain on housing markets in a number of cities nationwide.

One area that this toolkit places great emphasis on is the revision of some outdated zoning regulations that will loosen the restrictions that often deflate the efforts of the developers. It should not be overwhelming to get housing permits, and the local land use policies should reflect the needs of residents and the economy within the municipality — with obvious consideration being given to environmental safety.

Major actions of the Tool Kit

Some of the Actions that the toolkit outlines included:

  • The establishment of by-right development — eradicating much of the current controversy surrounding development approval processes. The current processes expose development plans to unnecessary controversy that can delay groundbreaking, as well as increase development costs.
  • The taxation of vacant land or donating it to non-profit developers
  • The streamlining and shortening of the permitting and approval processes for developers. The elongation and convolution of permitting processes can negatively impact the responsiveness to demand in a particular area.
  • The elimination of off-street parking permits will reduce unnecessary restrictions that are placed on housing development as a result of the need for off-street parking permits.

The idea behind this tool kit is to encourage developers, politicians and businesses to take a proactive position in confronting the existing barriers in order to introduce more reasonable and productive regulations that create a safe, healthy and affordable housing market. The toolkit is comprehensive in its presentation, and it can serve as a major tool in addressing the current challenges with housing.

You can view the entire 28 page PDF here.


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