Do Owner Occupancy Requirements Constrain Housing Supply?

Born out of a fear of absentee owners and rapacious investors, owner-occupancy requirements can have the contradictory effects of excluding renters from neighborhoods and limiting the number of rental units available.

1 minute read

November 1, 2022, 7:00 AM PDT

By Diana Ionescu @aworkoffiction

Duplex with twin two-story homes

karamysh / Duplex

A post on Brookings’ The Avenue by Anika Singh Lemar argues that owner-occupancy requirements, particularly on accessory dwelling units (ADUs), stifle housing supply and keep renters out of higher-end neighborhoods. As Lemar explains, “Restrictions on rentals appear in zoning codes, homeowners’ association rules, rules issued by subsidized lenders, and local ordinances.”

“Because renters typically have lower incomes than homeowners and are racially more diverse, owner-occupancy requirements affect the economic and demographic makeup of neighborhoods. Owner-occupancy requirements also prevent property owners from developing repeat expertise in acquiring and renovating existing housing stock to add ADUs; as a result, lenders are less likely to finance ADUs.” Lemar writes that owner-occupancy rules also reduce the housing supply by taking potential rental units off the market.

The article describes several court cases relevant to the debate over owner occupancy. “In the few cases where courts have interrogated the nexus between homeownership and home maintenance, they have refused to enforce owner-occupancy requirements.” Yet many continue  to uphold owner-occupancy requirements thanks to vague notions that owners will be better stewards of the property.

Lemar calls owner-occupancy requirements an example of “zoning creep,” the use of zoning to regulate “well outside the scope of land use and zoning regulations,” which has unintended negative impacts on equity and affordability.

Thursday, October 27, 2022 in Brookings / The Avenue

Large historic homes and white picket fences line a street.

The End of Single-Family Zoning in Arlington County, Virginia

Arlington County is the latest jurisdiction in the country to effectively end single-family zoning.

March 23, 2023 - The Washington Post

Amtrak Acela Express train passing through Harrison station in Newark, New Jersey

‘Train Daddy’ Andy Byford to Oversee Amtrak’s High-Speed Rail Efforts

Byford, who formerly ran NYC Transit and Transport for London, could bring renewed vigor to the agency’s plans to expand regional rail in the United States.

March 28, 2023 - StreetsBlog NYC

Buses in downtown Seattle on the dedicated 3rd Avenue bus lanes

Seattle Bus Lane Cameras Capture Over 100,000 Violations

An automated traffic enforcement pilot program caught drivers illegally using transit lanes more than 110,000 times in less than a year.

March 28, 2023 - Axios

View of Statue of Liberty with New York City skyline in background

Immigration Grows, Population Drops in Many U.S. Counties

International immigration to the country’s most populous areas tripled even as major metropolitan areas continued to lose population.

March 31 - The New York Times

Detroit Sports Arena

$616 Million in Development Incentives Approved for District Detroit

The “Transformational Brownfield” incentives approved by the Detroit City Council for the $1.5 billion District Detroit still require approval by the state.

March 31 - Detroit Free Press

A red sign reads, “Welcome to New Canaan.”

Affordable Housing Development Rejected for Lack of Third Staircase in Connecticut

The New Canaan Planning Commission rejected a development proposal, including 31 below-market-rate apartments, for lack of a third staircase, among other reasons, at a time when advocates are pushing to relax two-staircase requirements.

March 31 - Stamford Advocate

New Updates on PD&R Edge

HUD's Office of Policy Development and Research

HUD’s 2023 Innovative Housing Showcase

HUD's Office of Policy Development and Research

Urban Design for Planners 1: Software Tools

This six-course series explores essential urban design concepts using open source software and equips planners with the tools they need to participate fully in the urban design process.

Planning for Universal Design

Learn the tools for implementing Universal Design in planning regulations.