How Can Cities and Counties Increase Housing Supply?

The Economic Mobility Catalog’s Strategy Guide on Increasing overall housing supply provides guidance on how to design, implement, and evaluate initiatives to improve housing availability. It was created in partnership with experts and practitioners in housing and urban planning, including Toccarra Nicole Thomas, AICP, the Assistant Vice President of Housing and Development and Director of the Center for Zoning Solutions at Smart Growth America.

In this edited Q&A, Toccarra provides insights into ways cities can increase housing supply, improve housing affordability, and ultimately strengthen upward mobility.

Q1: What are some of the most impactful ways cities or counties can increase housing supply?

First, local governments should create plans that document everything they want to see in various areas — whether that’s housing, commercial corridor development, or public spaces. These plans could be neighborhood plans, comprehensive plans, project-specific plans, and so on. These are where you outline goals around increasing housing supply and document a vision shaped by community input.

Zoning is the primary way to make an impact on housing supply and affordability. With zoning, the rules you set are what you get. Zoning shapes the character and prosperity of a community, and if your zoning is optimized for autocentric single family detached sprawl, that’s all you get. But, you can reform zoning to permit mixed-use development and diverse housing options that create greater supply and thriving communities. The Center for Zoning Solutions at Smart Growth America has resources for cities to make innovative, proven reforms for both housing and economic development.

If you are not able to reimagine zoning to increase the amount of housing, look at what kinds of construction are allowed as by-right development that can bypass discretionary review and get built quicker, along with where housing construction is allowed and what additional criteria projects need to meet, like parking minimums. Cities can also modify things like setback distance from the street, minimum square footage, and other development standards related to infill development. Finally, building codes are another piece of the puzzle that can be tweaked to allow alternative housing types that can potentially decrease costs while increasing supply.

Another way to increase housing is through form-based land use regulations that enable the integration of uses and building types as well as using public space to create a more cohesive, higher-density community compared to single-use zoning. Form-based codes are a great way to reorient development towards more livable, mixed-use neighborhoods with more housing.

Q2: What specific practices should local governments consider as they seek to improve their zoning practices?

Essentially, the majority of American communities have similar zoning codes but their political conditions and community needs vary. Communities should identify what their zoning codes are optimized to build. Is it single-family homes or compact developments? See how zoning aligns with your vision for your community.

You also have to look at the levers that affect existing housing and could unlock redevelopment. For example, what is the definition of “family” for single-family homes? Can someone legally rent a room to a college student, for example?

Look at what qualifies as by-right development versus what proposals need discretionary review. Discretionary review requires a land use commission or government body to approve projects that don't fit with zoning codes, and can be a big obstacle. In many communities there is opposition during this period that stops higher-density developments. It’s also a hurdle for developers who need to put in time and money to get approval.

Communities unlock more housing when they move towards by-right as the default development process, since it removes the hurdle of discretionary review. Include higher density or missing middle housing developments (townhouses, duplexes, or mixed-use) in the by-right codes since these housing types are difficult to develop under most zoning codes, as they need discretionary review or are banned outright.

You also have to address add-ons, like parking. Parking minimums can restrict building higher-density developments in many places. Parking minimums can also limit mixed use, which connects to both housing and economic development.

Q3: How should local leaders think about building codes and permitting processes as they try to increase housing supply?

To incentivize affordable housing development, include flexibility for different housing types, such as manufactured housing or ADUs (Accessory Dwelling Units). Don't just rely on one type of housing. Some parts of the zoning code overlap with building codes. Modifying these codes can be useful tools to increase housing supply.

Related to building codes, determine what types of building methods are allowed and if there are any areas of opportunity there. For example, if the building codes have a minimum square footage (such as no house less than 1,000 square feet), this would effectively prohibit tiny houses from being built, even if the zoning code allows them.

Cities can create pre-approved plans to get developers through the permitting process and to the construction phase quicker. Consider also having a dedicated official — sometimes called a “permitting czar” — to help shepherd projects through all stages.

It’s also important to make the permitting process accessible to people — engage with the community for the planning process and encourage developers to engage with planners and the community before they begin seeking permitting approval.

Q4: When a local government wants to increase the supply of housing, who needs to be in the room, and what are their roles?

Primarily, community members — whether they’re community groups, housing advocacy groups, homeowners associations, or faith-based institutions. Cities should establish ongoing and iterative engagement to build trust. Engage people early, before a developer comes to the table. If it is a larger piece of land or a city-owned lot, you should try to build community support before you need it in the discretionary approval process.

Make sure developers understand your zoning and building codes and that your codes support the type of desired development. Developers want to stick to the requirements in the zoning code to avoid discretionary review. If it is not in your code, they are not incentivized to do it.

If you are trying to strengthen a neighborhood’s economy, you need to coordinate housing and jobs, so bringing in businesses is crucial. Businesses and business associations also will have a vision for a neighborhood or commercial corridor, so engage with them as a community member too.

Q5: What are some of the biggest obstacles you see for cities building more housing?

The first is funding. It’s important to figure out what you can do with your existing budget and financing options. The average municipality uses property taxes to fund a lot — so understand what the millage rate is (the tax rate used to calculate local property taxes) and how that contributes to your budget. When communities are facing a budget shortfall, no one wants to increase taxes, but you can increase housing supply which brings in more tax revenue and foot traffic for existing businesses. A great way to do this is through form-based codes, which focus on creating mixed-use, people-oriented development that really draws people to live, work, and shop. Smart Growth America actually tested this in four communities and found that communities with form-based codes generated millions of dollars more in revenue without raising taxes.

Another aspect of the funding challenge is knowing what state or federal incentives exist. At the federal level, the Community Development Block Grant (CDBG) program is a rich option. If you are designated an entitlement community by the U.S. Department of Housing and Urban Development, you can leverage these funds for housing too.

The last challenge is looking at how we can connect different types of land uses to make life better for people and remove historical disparities. We have generations of public servants who have implemented plans without consideration for public parks, and we know that access to parks is an indicator for health and well-being. This requires changing how things are done within government — making sure the housing people talk to the parks and recreation people and that access to public space is included in community plans.

Q6: What steps can local governments take to ensure zoning and community development create opportunities for all?

First, make sure code enforcement is fair — education before enforcement is important, especially when you’re dealing with small property owners or small businesses. A fair zoning code needs to take into account home-based businesses. Small businesses are about bootstrapping. If you can’t use your house and instead need to lease office space, that is inequitable and adds a huge overhead burden to starting a business.

Zoning is often set up to separate people from each other and to separate people from uses. This separation prevents people from interacting and acts as an obstacle to upward mobility. Look at disparities in access to public spaces and third spaces. Zoning practices adopted during segregation removed many third spaces and banned mixed-use development, but now communities can use the same system to bring back third spaces and encourage higher-density, mixed-use neighborhoods.

Another remnant of segregation is how families are defined and zoning that prevents house sharing, that is, renting out a floor or a room. To increase affordable housing supply, change the rules to increase the utilization rate of existing houses by letting people rent those rooms or build ADUs. In the meantime, we can update zoning and rebuild our housing stock to reflect the types of communities people want to live in and that encourage upward mobility.

About the Expert: Toccarra Nicole Thomas, AICP, is the Assistant Vice President of Housing and Development and Director of the Center for Zoning Solutions at Smart Growth America, where she leads zoning and housing policy reform. With a multidisciplinary background, she has spearheaded transformative zoning and organizational reforms in city, county, and quasi-judicial agency planning roles, including launching pro-housing policies, streamlining permit processes, and advancing workforce housing strategies. Previously, she worked in finance and supply chain management. Toccarra holds master’s degrees in Urban & Regional Planning and Business Administration.