A Menu of Proposed Housing Policy Reforms

The Mercatus Center published a list of 16 policy recommendations designed to help states clear local obstacles for housing construction.

2 minute read

September 7, 2022, 12:00 PM PDT

By James Brasuell @CasualBrasuell


“As the economy responds to a rapidly changing world, state legislatures can ensure that their housing markets are a source of economic strength and opportunity,” argues an article by Salim Furth and Emily Hamilton for the Mercatus Center, a conservative nonprofit think tank at George Mason University.

The article assumes that states have power to set rules and provide incentives that can help deliver the housing to meet demand in high-cost parts of the country (the post acknowledges that state power comes with some limitations, such as not being able to control the price of lumber). Noting recent legislation in Oregon (i.e., 2021’s SB 458), Utah (i.e., 2021’s HB 82), and Connecticut (i.e., 2021’s HB 6107), the article suggests several approaches for states to preempt local zoning laws and help loosen the regulations in high-demand markets.

The article proposes several categories of reform, with specific actions in each for 16 specific recommendations in all. More details are included in the source article, linked below.

Direct Limits on Local Regulation

  1. Permit Accessory Dwelling Units
  2. Limit Parking Mandates
  3. Cap Minimum-Lot-Size Requirements
  4. Permit Light-Touch Density
  5. Allow Transit-Oriented Development

Streamlining Procedures

  1. Reform Protest Petitions
  2. Allow Neighbors to Waive Setbacks

Fiscal Innovations

  1. Make Community Benefit Agreements Fair and Predictable
  2. Allow Ohio-Style Tax Abatements for Residential Reinvestment
  3. End “Inclusionary Zoning” (More on why Hamilton thinks Inclusionary Zoning" is harmful to housing outcomes ca be heard in a recent "Cityspeak" podcast by Urbanize.)

Narrowing the Scope of Zoning Authority

  1. Adopt the Property Ownership Fairness Act
  2. Block Zoning That Makes Existing Conditions Illegal (i.e., non-conforming uses)
  3. Protect “Build to Rent”

Updating Construction Standards

  1. Allow HUD Code Manufactured Housing without Redundant Local Inspections
  2. Eliminate Aesthetic Mandates and Materials Bans
  3. Allow Skinny Apartment Buildings

The article does not mention allowing affordable housing residential development by-right on commercial-zoned lots, such as proposed by a California law, AB 2011, approved by the California State Legislature in August and awaiting the governor’s signature.

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