Affordable Housing: Strategies For Success

how to organize affordable housing

Affordable housing is a complex issue with no one-size-fits-all solution. The definition of affordable varies across communities and individuals, and the challenge is further exacerbated by factors such as zoning restrictions, wage stagnation, and the rising cost of construction. To address this crisis, governments and communities must explore a range of strategies, including increasing housing supply, providing subsidies and incentives, promoting inclusive neighbourhood designs, and curbing speculative practices.

There are two primary types of affordable housing: dedicated units for low- and moderate-income households, supported by public subsidies or incentives, and market-rate units that are naturally affordable due to age, location, or other factors. While the former ensures long-term affordability for vulnerable populations, the latter is crucial for naturally maintaining affordability in the housing market.

To enhance affordability, governments can employ a combination of approaches, such as ending exclusive single-family zoning, expanding the rental housing supply with a focus on public and non-profit housing, and imposing speculation and vacancy taxes to discourage vacant properties and profit-driven practices. Additionally, encouraging diverse housing options, such as mobile homes, secondary suites, and missing middle housing, can provide more affordable choices for individuals and families.

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Encourage missing middle housing

Missing middle housing is a range of multi-unit or clustered housing types that are compatible in scale and form with single-family homes. The term was introduced by architect Daniel Parolek in 2010. It refers to housing types that fall somewhere between a single-family home and mid-rise apartment buildings. This includes duplexes, triplexes, fourplexes, and bungalow courts.

Missing middle housing can help increase the availability of less expensive housing types and support vibrant, walkable neighbourhoods. They can be used to expand the diversity and affordability of housing in neighbourhoods dominated by single-family homes. These housing types are generally more affordable than single-family homes, as their smaller size means lower per-unit construction and land costs.

To encourage missing middle housing, localities should consider updating their zoning codes to allow for these housing types. Many localities' zoning codes currently prohibit missing middle housing from being built, at least within certain neighbourhoods. Updating the zoning code to allow for missing middle housing types is an important first step in encouraging their development. Additionally, localities can consider providing technical assistance and resources to small-scale developers to help them navigate the regulatory process and understand relevant requirements.

Another strategy to encourage missing middle housing is to streamline the development process by making certain housing types, like duplexes and triplexes, allowable by right in all residential zones. This eliminates the need for additional discretionary approvals, making the development process faster and more predictable for developers. Localities can also consider offering reduced impact fees for projects that meet specific criteria, such as providing housing below a certain price point or infill projects near transit corridors.

Furthermore, localities can work to build the capacity of small-scale developers by offering technical assistance, creating user-friendly guides and resources, and connecting developers with financing and training opportunities. This is important because missing middle housing is typically developed by small-scale developers, including community development corporations and smaller minority- and women-owned contracting firms.

By implementing these strategies, localities can encourage the development of missing middle housing, increase the availability of affordable housing, and promote more inclusive and walkable neighbourhoods.

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Restrict short-term vacation rentals

The rise of short-term rental platforms, such as Airbnb, has sparked debates about their impact on affordable housing. Short-term rentals can reduce the supply of affordable housing in two ways. Firstly, they directly remove housing units from the long-term rental market, adding them to the community's supply of hotel rooms. Secondly, they incentivize property owners to rent out rooms on short-term rental platforms instead of to local residents, creating "cottage hotels" and further decreasing the supply of housing. This decrease in supply can spur displacement, gentrification, and segregation.

To restrict short-term vacation rentals, local governments can implement several strategies:

  • Zoning laws: Cities can enforce zoning laws to maintain the character and safety of residential neighbourhoods. While short-term rentals can conflict with these laws, zoning regulations may require special short-term rental licenses, restricting their prevalence.
  • Taxation policies: Short-term rental properties may avoid paying the same taxes as traditional lodging businesses. Local authorities can address this by introducing short-term rental tax requirements or annual permits, ensuring these properties contribute fairly to the local economy.
  • Voluntary collection agreements (VCAs): Local governments can partner with platform providers like Airbnb to automatically collect occupancy taxes for stays booked on their platforms. However, this approach has limited transparency, as it does not provide details on the duration of stays or specific property addresses.
  • Minimum stay requirements: Local governments can explore implementing minimum stay requirements to avoid "party house" rentals for single weekend nights.
  • Data-driven decisions: By collecting data on short-term rentals, local governments can better assess potential issues related to zoning, enforce regulations, and proactively address complaints.
  • Collaboration with local businesses: Local governments can collaborate with local businesses, such as companies offering welcome services, cleaning services, and software solutions, to support the needs of hosts and guests while ensuring compliance with registration, taxes, and licensing requirements.
  • Technology solutions: Artificial intelligence, software, and analysis tools can aid in detecting, managing, and reporting on short-term rental permits and transient occupancy taxes. Additionally, technologies like noise detection devices and Wi-Fi routers that sense high activity levels can assist in managing these rentals.

It is important to note that the dynamics of this issue are complex, and local governments must balance the need to regulate short-term rentals with respect for property owners' rights to gain income from their properties.

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Impose a speculation and vacancy tax

Imposing a speculation and vacancy tax is a policy tool aimed at curbing property speculation and encouraging the use of vacant properties for housing. It is a levy applied to homes that are not being lived in or rented out for a certain amount of time in a year. The objective of this tax is to make owning a home more achievable and to ensure the availability of rental properties, which in turn could help make housing more affordable.

The speculation and vacancy tax is designed to discourage speculative investment in the property market. This is the practice of buying homes, not for living in or renting out, but solely in the hope of profiting from property price appreciation. By imposing a tax on such speculative activities, the aim is to stabilize prices and ensure the availability of properties for residents who intend to live in them.

The vacancy tax, on the other hand, focuses on properties that remain unoccupied for a significant part of the year. The goal is to address the issue of housing scarcity. In regions where housing demand exceeds supply, vacant properties can exacerbate the problem. The vacancy tax motivates property owners to put their vacant homes up for rent, increasing the availability of rental properties and potentially bringing down rental costs.

The two taxes often overlap in their application since properties purchased for speculation often remain vacant. This is why some regions, like British Columbia (BC), combine them into a single speculation and vacancy tax.

In BC, all residential property owners are required to make a speculation and vacancy declaration each year. This declaration is a way for the government to track how properties are being used and identify which ones are liable for the tax. The revenue collected through the tax supports affordable housing in the areas where the tax is applied.

The speculation and vacancy tax is just one tool in a broader policy toolkit designed to make housing more affordable and accessible. Other measures often accompany it, such as incentives for first-time home buyers, public housing projects, and rent control measures.

The tax has had a significant impact on the housing market in BC. It has contributed to a decrease in the number of vacant homes and an increase in the availability of rental properties, leading to a slight cooling of the overheated property market. It has also helped to raise funds for affordable housing projects, with over $81 million raised in 2022 through the tax in BC alone.

However, it's important to recognize that the speculation and vacancy tax is not a silver bullet. It has also faced criticism, with some arguing that it is a blunt instrument that can penalize homeowners for legitimate vacancies and fail to significantly reduce housing prices. Despite these criticisms, supporters argue that it is a necessary tool for discouraging property speculation and ensuring homes are used for housing.

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Protect tenants from eviction

Protecting tenants from eviction is a crucial aspect of ensuring affordable housing. Here are some strategies to achieve this:

Legal Protections

It is essential to have strong legal frameworks that safeguard tenants' rights and make eviction a last resort. This includes implementing and enforcing laws that require landlords to provide adequate notice before terminating a tenancy and allowing tenants to fix any violations or pay outstanding rent to avoid eviction.

Rental Assistance Programs

Governments at the federal, state, and local levels can establish rental assistance programs to help tenants who are struggling to make rent payments. These programs can provide financial support to prevent evictions and keep people in their homes. For example, during the COVID-19 pandemic, various jurisdictions offered emergency rental assistance to those facing economic hardship.

Eviction Diversion Programs

Eviction diversion programs aim to prevent evictions by providing alternative solutions. This could include mediation between landlords and tenants, offering legal assistance to tenants, and facilitating negotiations to create payment plans or other arrangements that satisfy both parties.

Rent Control Policies

Implementing rent control measures can protect tenants from sudden or excessive rent increases, making it more manageable for them to keep up with rent payments and reducing the risk of eviction.

Mobile Home Protections

Relaxing restrictions on mobile homes and tiny homes can provide more affordable housing options. Allowing these dwellings in more areas and streamlining permitting processes can increase housing supply and reduce the likelihood of eviction due to a lack of affordable options.

Tenant Associations

Encouraging and supporting the formation of tenant associations or unions can empower renters to advocate for their rights collectively. Through organization, tenants can negotiate with landlords, push for legislative changes, and create support systems to help each other stay in their homes and avoid eviction.

By implementing these strategies and working towards long-term solutions for affordable housing, governments and communities can effectively protect tenants from eviction and ensure that everyone has access to safe and stable housing.

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Encourage mobile homes

Mobile homes are often necessary for people who cannot afford to buy a traditional home, especially in rural areas with fewer affordable housing options. However, mobile homes typically depreciate quickly, unlike traditional houses, which gain value over time. This can put residents in a difficult position if their asset loses value while their lot rent rises.

To encourage mobile homes as a viable option for affordable housing, local governments can update their bylaws to be less restrictive. For example, allowing tiny homes to have wheels, sleeping lofts, and composting toilets. Local governments should also allow people to park their RVs in places other than official RV parks and not ticket or evict people living in unapproved suites and dwellings. Making permitting quick and easy for mobile homes is also essential.

Additionally, local governments should allow mobile homes on private property, as long as they follow health and safety standards, and permit clustering in villages. For instance, Oregon has allowed mobile homes on private property, while Victoria has permitted clustering in villages. Colleges can also be encouraged to create mobile homes for students.

Furthermore, it is crucial to prevent profit-driven private equity funds from buying mobile home parks and increasing rents and fees. States like Colorado, Washington, and Arizona have enacted legislation to expand protections for mobile home residents, providing them with more time to resolve late payments and sell their homes or move after eviction. These legislative efforts aim to protect mobile home residents from exploitation and provide them with more stability.

By implementing these measures, local governments can promote mobile homes as a viable and affordable housing option, ensuring that residents have access to safe and stable living environments.

Frequently asked questions

There are two types of affordable housing: dedicated affordable housing and market affordable housing. Dedicated affordable housing is created with subsidies from public sources or through affordability requirements or incentives. Market affordable housing, on the other hand, is created without any direct government subsidy and may rent or sell at affordable levels.

Local officials can play a crucial role in expanding the availability of both types of affordable housing. They can implement well-designed policies to ensure that these housing options continue to serve moderate- and low-income households over the long term. Additionally, encouraging the development of "missing middle" housing, such as duplexes, small cottages, and row houses, can provide more affordable options for those with limited budgets.

One strategy is to design neighbourhoods, not just buildings. This involves creating human habitats where people want to live, with a mix of different prices, styles, sizes, and types of housing in the same area. Another strategy is to focus on walkable and bikeable cities, reducing transportation costs and improving quality of life. Additionally, utilising vacant lots and underutilized properties, especially in downtown areas, can help create affordable housing options without the high cost of land.

One challenge is the rising cost of construction and delivery of housing, which can be influenced by zoning restrictions and stagnant wage growth. Additionally, government subsidies are often necessary to make new housing construction financially feasible for low-income households.

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