Editor's Note: This article was originally published by Bitterroot, a newsletter about the politics, economy, culture, and environment of the West. Subscribe here.
Last summer, while the national gaze was fixated on clashes between racial-justice protesters, law enforcement, and alt-right militias in Portland, the city council quietly passed one of the most equity-minded measures in the Oregon city’s history. The Residential Infill Project — RIP for short — is an update to the city’s zoning code that allows four-unit houses to be built on virtually any residential lot; six units are allowed if half are reserved for low-income earners. And new single-family homes can only be 2,500 square feet, down from the previous limit of 6,500.
The change wasn’t a small technical tweak; over decades, the RIP could fundamentally restructure Portland’s development patterns in a way that provides more housing for low- to middle-income families. An analysis commissioned by the city estimated the policy will result in the addition of 24,000 more housing units in the city over the next 20 years. RIP “doesn’t ban single family homes, and it will not destroy Portland’s neighborhoods,” then-Commissioner Chloe Eudaly said the day the measure passed. “What it will do is open the door for the missing-middle housing to exist across our city.”
Before zoning reform, more than 70% of Portland’s residential land was set aside for single-family use. This practice, common in every Western city, has promulgated racial and economic segregation by restricting the construction of new houses. With RIP, Portland simply tossed it aside. “It’s the most pro-housing reform to low-density zones in U.S. history,” Sightline Institute senior researcher Michael Andersen wrote.
It’s an action that could have widespread ramifications since much of the West, from Seattle to Albuquerque, is experiencing a housing crisis. Unchecked, the lack of affordable shelter in our region will have dramatic economic and public health repercussions. The most conspicuous of these is homelessness, but the inability of all but the richest among us to secure reliable housing is an even more pervasive issue.
The crux of the problem is a basic market imbalance: Demand for housing has skyrocketed, and the supply hasn’t kept pace. “The biggest solution is obvious — it’s the construction of more homes, available to all income levels,” said David Garcia, policy director at the University of California, Berkeley’s Terner Center for Housing Innovation. And perhaps the best way to goose construction is for jurisdictions to mimic Portland and ditch single-family zoning.
“It’s not the only way,” Garcia said, “but it’s the most significant.”
In 2019, I met Dave Kelly in his downtown Salt Lake City office. Kelly is a commercial real estate broker and chair of the Pioneer Park Coalition, a group of well-to-do developers, downtown business owners, and politicians formed in response to Salt Lake’s homelessness crisis. Kelly’s assessment of homelessness and its causes was, shall we say, divorced from research; during our conversation, he told me service providers had the “backward mentality” of letting people “choose when they want to not be homeless anymore.” Getting stable housing sometimes required addressing “alcoholism and mental issues, but also the basic commonsense that you don’t do your grocery shopping at 7-11.”
But housing supply is a key component of any city’s homelessness dynamic, and in this regard, Kelly offered insight that’s increasingly backed up by policy experts. “Somebody who’s looking to build apartments on a piece of ground, they want to build as many apartments as they can,” he said. “But when zoning and density restrictions don’t allow you to maximize that, it’s a problem.”
Developers are often castigated by politicians and activists for catering to the rich, but building luxury homes is one of the only options they have. In expensive Western cities like Salt Lake, pretty much two types of dwellings are built: government-subsidized units of affordable housing, and hyper-expensive units affordable only to the upper echelon of earners. Residential zoning codes in most cities allow only one house per parcel, so to maximize profit on their homes, developers go big and expensive.
This regulatory and economic cocktail has been depressing the West’s housing supply since the Great Recession. According to an analysis by the Kem C. Gardner Policy Institute at the University of Utah, that state added 220,720 households between 2009 and 2019, but just 185,334 units of housing received permits during that time — a shortage of more than 35,000 homes.
This, of course, is not a Utah-specific phenomenon. From 2015 to 2020, the Las Vegas, Salt Lake City, Seattle, and Boise metros had four of the nation’s five fastest home-price increases; Boise topped the list with an 84% jump. At the state level, Idaho, Washington, Nevada, Utah, and Colorado had the fastest home-price increases in the country, while California, Arizona, and Oregon made the top 15. Smaller towns, especially tourism hubs like Moab or Jackson Hole with thriving second-home markets, are experiencing a similar dynamic.
Understanding why prices have jumped so significantly is simple — construction of new houses and apartments hasn’t kept pace with demand in areas where job growth is swelling. In some areas of California, for instance, new jobs have outnumbered new homes 12 to 1. In their report, the Gardner Center researchers put it simply: “This troubling price trajectory can’t be tamped down without a larger supply of high-density housing.”
Which brings us back to Kelly’s gripe about zoning. We don’t know for sure whether developers could solve the affordability crisis in Western towns. What we do know is that most cities, through restrictive single-family zoning, aren’t even letting them try.
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Nowhere is this issue better understood than in California. Utilizing
data on local land-use codes collated by the Terner Center, numerous
researchers have illustrated how the state’s housing market has been
taken hostage by zoning restrictions. In an efficient market, developers
would build apartments where land is expensive and rent is high — the
developer gets more revenue-generating units per parcel, and renters get
the option of smaller, less-expensive housing. But that hasn’t been the
case in California: nine of the state’s 12 most expensive cities permitted zero multifamily units between 2013 and 2017. Another analysis found that restrictive zoning, more than any other regulation,
was associated with less permitting and, therefore, supply-side price
increases. The proportion of a city’s landbase that’s dedicated to
single-family housing correlates with high housing costs, as does the
degree of political opposition to housing development. Not surprisingly,
these NIMBY neighborhoods are more racially segregated. Adjust for housing costs, and California has the nation’s highest poverty rate.
California is only adding about 100,000 new units of housing each year; in the 1970s and 1980s, state homebuilders routinely doubled that rate of construction. (By contrast, Dallas builds twice as many homes as the Bay Area each year.) There are many reasons for the slowdown — Garcia and his colleagues say environmental reviews, the permitting process, and tax incentives could be streamlined — but a big issue is folks are simply running out of land on which they can build.
“The scarcity of land is one that is really self-inflicted by our legacy
of exclusionary, single-family zoning,” Garcia said. “The majority of
land that is zoned residential has seen virtually no homebuilding in the
last 20 or 30 years. So there’s a tremendous amount of land that is
essentially frozen in amber, that has seen no growth.”
Restricted by zoning, developers keen on affordability lean on
subsidies, usually in the form of tax breaks. Back in Salt Lake — where
88% of the county’s residential acreage is reserved for single-family
homes — Dan Lofgren knows this system well. Lofgren runs Cowboy Partners,
one of the few for-profit developers that routinely builds affordable
housing; more than 40% of Cowboy’s units, Lofgren told me, have an
affordability measure attached to them. To make these projects pencil
out, Lofgren taps various sources of revenue or cost reductions,
primarily federal tax cuts for affordable units. For some projects, he
told me, he’s cobbled together five or six forms of subsidies.
Affordable housing — units in which rents are capped and/or residents
are required to earn below a certain income threshold — is typically the
domain of nonprofits and government entities. But Lofgren said that
approach has its limitations.
“If we’re going to make a big difference in the affordable housing
challenge, if we’re going to shrink that gap meaningfully, we have to
continue to find ways to engage the horsepower of the private sector,”
Lofgren said. “Now, I’m not poo-pooing public, I’m not poo-pooing the
nonprofit sector, but I’m telling you, it’s the private sector that’s
got the grunt to get things done."
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When Portland passed the Residential Infill Project, Eli Spevak, an affordable housing developer who began campaigning for the zoning reform in 2014, wasn’t ready to pop the champagne. “I was … steeling myself for the likelihood of a legal challenge that could drag the project out even longer — or even derail it completely,” he told me recently. Neighborhood associations have scuttled affordability measures in numerous cities over the years, and Spevak knew some in Portland were raising money for lawyers.
A lawsuit never emerged. One reason Portland’s RIP isn’t facing legal challenges is that the state of Oregon gave it some valuable cover a year prior. In 2019, lawmakers passed House Bill 2001, which banned single-family zoning in any city with more than 10,000 residents. So even if Portland failed to pass its Residential Infill Project, changes were coming to single-family neighborhoods regardless.
Much of the debate over H.B. 2001 fell along familiar lines. “Over the years, the zoning of our cities has not kept up with the changing needs of Oregon’s families,” Mary Kyle McCurdy, of the group 1000 Friends of Oregon, said in testimony. “Family sizes are getting smaller, the populations of those over 65 and of younger families are growing, and the cost of housing is outpacing incomes. But our housing does not reflect these changes. This is not an issue of land supply – it’s making sure all our neighborhoods are open to different types of housing, for all families.”
But H.B. 2001 succeeded where other statewide zoning proposals have failed thanks in part to some rare bipartisanship. Zoning reform does not rest neatly in the liberal-conservative spectrum. As California state Senator Scott Wiener’s repeatedly doomed proposal to upzone near transit and job centers so vividly illustrates, liberal politicians — typically those representing white, affluent areas filled with single-family homes — routinely shoot down reforms that would increase density, often citing traffic increases and “neighborhood character.” That liberal opposition emerged in Oregon, too, but conservative lawmakers championing private property rights were able to override the opposition. (It might have helped that some of those Republicans manage rental properties.) The bill had two Republican co-sponsors, and Republican state senators Dallas Heard and Tim Knopp cast votes in favor of the measure before they walked off the job in opposition to education spending and carbon tax proposals.
If nothing else, H.B. 2001 lessened the shock of Portland’s Residential Infill Project — duplexes were coming in anyway, so what’s a couple more units here and there? And nobody expects homes across Portland to be bulldozed en masse to be replaced with fourplexes. The new regulations “will not create a sea change for developers,” Spevak said. “This is just expanding the choices.”
Those choices are spreading across the West, albeit slowly. California and Oregon have legalized accessory dwelling units like mother-in-law cottages, as have numerous cities around the region. Meanwhile, proposals to limit single-family zoning are advancing in Sacramento and the Montana statehouse.
For the working class, these are welcome conversations. The coronavirus pandemic has simultaneously chipped away at economic insecurity while boosting home prices around the region. Westerners need more housing options, and a corner-lot fourplex on every block could go a long way to that end.
