One solution is for local and state government to develop and implement incentives that would encourage developers to produce such housing while also reducing unnecessary barriers that impede on such developments.
Create Developer Incentives
1. Density Bonuses
- The most common form of compensation, the density bonus, allows developers to build at a density higher than residential zones typically permit, providing greater density if the builder provides additional affordable units in development.
- Or a builder can "buy" density by paying into a local housing trust fund.
2. Relaxed Zoning Regulations
- Reduce regulations, including but not limited to: minimum lot area requirements, limitations of multi-family dwellings, minimum set-backs, yard requirements, variances, bulk requirements and over zoning and growth management caps. Reduce parking requirements, modify street standards.
3. Fee Waivers
- Reduce or waive fees levied on new development projects where affordable housing is addressed.
- Reimburse permit fees to builder upon certification that dwelling unit is affordable.
- Reduce portion of Sewer/Water tap in fees for affordable housing units.
4. Fast Track Permitting
- Streamline the permitting process for new development projects. Expedite affordable housing developments to help reduce costs and time delays.
- One Stop A to Z Development Center with expeditor.
5. Design Flexibility
- Allow greater design flexibility.
- Create pre-approved design standards to allow for quick easy approval.
- Promote infill development, mixed use and accessory dwellings.
6. Direct Subsidies and Support
- Provide added funding through trust fund revenues
- Local jurisdiction acquires and conveys land at reduced cost
- Assistance with marketing and certification of affordable units.
- Producing affordable housing for a diverse labor force;
- Foster mixed-income communities;
- Insuring affordability in tight housing markets;
- Stretching scarce public dollars by leveraging market-rate construction
- Ensure economic vitality and community enhancement
Affordable housing barriers are defined typically as regulatory or financial systems that make it harder for developers to create affordable housing.
According to US Housing and Urban Development Department, a regulatory barrier is, “a public regulatory requirement, payment, or process that significantly impedes the development or availability of affordable housing without providing a commensurate health and/or safety benefit.” (APA, Practicing Planner, Winter 2004, Responding to HUD’s Affordable Communities Initiatives: Will it make a difference? Stowell and Shelburne.)
List of Barriers typically include the following:
- Single-family large lot zoning
- Prohibition on accessory dwellings
- Exorbitant development and impact fees
- Excessive or discriminatory public review requirements
- Shortage of land zoning for multi-family
- Unreasonable or excessive building code requirements
- Lack of incentives for increased density
- Long permitting processes and development delays
- Complicated and confusion system
- Subjective design standards and excessive preservation requirements
Impact Fee Reduction
As an incentive to reduce the cost of development impact and other review fees may be waived or reduced in some instances. The county and/or cities have some power to provide permission to authorize such waivers for affordable housing units, except where “bond covenants” (i.e. on water, sewer connection fees) or other legal constraints prevent such waiving. In some cases subsidies for payment of fees may be provided in the form of deferred payment or low interest loans.