2003

PAS Report 513/514
Regional Approaches to Affordable Housing

Chapter 1: Affordable Housing as a Regional Planning Priority

The United States in the twenty-first century is a swirling eddy of demographic change. Nothing today seems as simple as it once did in the folk songs of the 1960s. Idealistic musicians then dreamed of a society that conquered poverty, eradicated discrimination and inequality, and brought white and black, rich and poor together in a utopian search for justice. Generally implicit in those dreams was the notion that everyone should have access to decent housing and fair employment, regardless of race, religion, or ethnic background, and that somehow we could all live together as one happy American family.

At the time, there were obvious challenges to this ideal, but racial discrimination seemed to be yielding to the straightforward attack of civil rights laws. Throughout the 1960s and 1970s, federal, state, and local legislation sought to guarantee equal access to public facilities, open housing, and a wider range of opportunities for all Americans. Many communities passed open housing resolutions while experimenting with programs to neutralize blockbuster tactics in the real estate industry.

But during this period cities also metamorphosed into highly suburbanized metropolitan areas, with governance spread among an increasing number of local authorities. Faced with this fragmentation of local government, several

communities believed regional cooperation could produce equitable solutions to the challenge of distributing housing for the poor. In Minnesota, the Metropolitan Council emerged as an innovative regional governance tool for the Twin Cities area, while Oregon created Portland Metro. Other areas of the country experimented with the consolidation of city and county government or joint service provision and, in some of those places, coordination of housing policy was a consequence.

But trouble loomed on the horizon. Already, wealthier communities were using their local land-use control authority prerogatives to create levels of economic homogeneity and segregation that had never existed in central cities. Concurrently, the growth of poverty in central cities exceeded all expectations. Differences were widening, and if governmental action were to resolve the problem, state and federal government had to act quickly. The federal government responded with a war on poverty and a growing array of incentives for regional planning.

In the three decades that followed, we have become a nation of contrasts. These contrasts, however, are no longer simply between black and white, between big cities and small towns, or even between central cities and evolving suburbs, although all of those disparities persist to varying degrees. These contrasts have been complicated by the surge in new immigrant minorities who now, unlike in the 1960s, populate central cities. The once familiar nuclear family has also begun to disappear. Defined as households that contain a married couple with children, nuclear families fell from 45 percent of the population in 1960 to slightly less than 25 percent in 2000. These and other demographic changes have produced profound development changes, both in suburbs and central cities, often at the expense of the less advantaged. The poor who live in inner-city neighborhoods often watch helplessly as gentrification produces benefits for new, wealthy residents while it eliminates access to affordable housing within commuting reach of the jobs long­time residents hope will rescue them from poverty.

Today, a number of governmental initiatives seek to resolve the dilemma of providing affordable housing, although primarily in locations where regional or state-level housing programs were created years ago out of a sense of fairness are in place. These programs often grew because of unique timing and circumstances that produced the critical balance of forces needed to effect such change, through either the courts, public opinion, or remarkable political leadership, or some combination of these. For instance, few courts have come close to taking the stance of the New Jersey Supreme Court in its Mount Laurel anti-exclusionary decisions. These decisions, described in Chapters 2 and 4, interpreted the state constitution to ensure that local governments used their authority to zone to provide realistic opportunities for low-and-moderate income housing and to remove barriers to their construction. Successful experiments that have produced affordable housing do exist; but many metropolitan areas have yet to find a balance of forces capable of creating institutional structures and financing mechanisms that can sustain effective programs.

ABOUT THIS REPORT

This Planning Advisory Service (PAS) Report examines the results achieved to date in those regions or areas of the country where equity in housing opportunity is a planning priority. It is intended as a source book that identifies and analyzes regional strategies that encourage the provision of a full range of housing types across metropolitan areas or areas that are multijurisdictional in nature. This PAS Report is an attempt to shine a spotlight on the mechanics of success in order to make successful regional approaches to affordable housing more feasible and more common. The report analyzes statewide programs that have regional impacts and subregional programs that involve multiple jurisdictions.

The study was completed by the American Planning Association (APA) Research Department with funding from the U.S. Department of Housing and Urban Development, the Fannie Mae Foundation, and PAS.

The key questions addressed by this report include:

• What are the most successful and promising approaches to retaining or developing affordable housing from a regional perspective? What factors contributed to their success, and can those factors be replicated?
• What are the principal barriers to providing affordable housing?
• Which institutional structures work better than others? How effective are public/private partnerships? How effective are private approaches?
• How can regional approaches to affordable housing be successfully translated into housing production? What must be present for affordable housing production to occur?
• What types of inducements can be offered to local governments so as to orient their policies toward consideration of regional housing needs?
• What are alternate ways of providing financial assistance for affordable housing on a regional basis (e.g., housing trust funds)?

These issues are addressed in the following chapters, summarized below.

Chapter 2 covers the historical development of regional planning for affordable housing in the U.S. until the 1980s. It addresses the emergence of housing planning from a series of technical studies on housing conditions to regional and state-level systems that identify local obligations for the provision of affordable housing.

Chapter 3 describes the "big picture" issues associated with regional approaches to affordable housing. These include the questions of what affordable housing is, what a region is, and what authority regional planning agencies have. This chapter examines what has been termed the "chain of exclusion" in local land-use regulation: the impact of local land-use controls and their administration on the supply of affordable housing.

This PAS Report is an attempt to shine a spotlight on the mechanics of success in order to make successful regional approaches to affordable housing more feasible and more common.

Chapter 4 describes and evaluates a variety of fair-share programs in New Jersey, California, New Hampshire, and Portland, Oregon. It also includes evaluation of an incentive program in Minnesota's Twin Cities region. The emphasis in this chapter (and in Chapters 5 through 7) is whether the programs described are producing affordable housing, to whatever extent that can be determined, regardless of the structure of the program.

Chapter 5 describes and evaluates a variety of statewide and regional affordable housing trust funds programs, including the Vermont Housing and Conservation Board; A Regional Coalition for Housing (ARCH) in suburban Seattle, Washington; the Sacramento Housing and Redevelopment Agency; the Columbus and Franklin County, Ohio, affordable housing trust fund; and the Montgomery County (Dayton), Ohio, housing trust fund.

Chapter 6 describes and evaluates three state-level housing appeals laws in Massachusetts, Rhode Island, and Connecticut.

Chapter 7 describes and evaluates private sector approaches to encourage the production of affordable housing in the San Francisco Bay Area and Chicago. Also included are approaches used in Maryland, New Hampshire, and Ames and Story County, Iowa, that do not easily fall into a single category.

Chapter 8 sets forth a series of second-best and best approaches to affordable housing on a regional basis. The first is a collection of programs that are distinctly less action-oriented and whose likelihood of measurable results is slim to none but that may offer a starting point for regions contemplating the problem of affordable housing for the first time. The second group is a collection of elements that would improve the provision of affordable housing if assembled as a package for a region.

Appendices to this report include a bibliography of major sources consulted, a bibliographic research note on the techniques of housing fore­casting and the design of fair-share allocation formulas, a list of state statutes describing local housing elements, and relevant excerpts on local and regional housing planning from APA's Growing Smart Legislative Guidebook, 2002 Edition, which contains model enabling statutes for planning and land-use control.

HOW THIS STUDY WAS CONDUCTED

This study was conducted using primary source data and personal interviews on a variety of state, regional, and local programs from around the nation. Secondary sources, including articles from planning, housing, and law journals, were also consulted. The initial research effort involved compiling a bibliography of materials on such programs, particularly sources emphasizing program activities beginning from the early 1990s. Some of the material is historical in nature and available only in hard copy. More recent information on these programs is available on the Internet but requires careful analysis.

The APA Research Department staff identified these programs through a variety of measures. These included revisiting well-known, long-established programs, such as the New Jersey Fair Housing Act, and identifying lesser-known programs through a survey of PAS members, who submitted a variety of documents, some of which are included in the case studies in Chapters 4 through 7 (such as the case study from Ames and Story County, Iowa, in Chapter 7).

Other approaches were also used. A review of state statutes, for example, resulted in the decision to investigate the New Hampshire program of regional housing needs assessments, about which relatively little has been written. Similarly, when bibliographic research turned up information on a variety of regional housing trust funds, the research team decided to look into such programs further; the result is the discussion in Chapter 5 of the multijurisdictional trust funds in Eastern King County; Washington (ARCH); the City and County of Sacramento; Montgomery County (Dayton), Ohio; and the City of Columbus and Franklin County, Ohio.

In addition, APA conducted a symposium in its Chicago office on October 29–30, 2000. Participants included public officials, academics, housing policy specialists, professional planners, and representatives of constituency groups (see Appendix C for a complete list). The purpose of the symposium was to assess past efforts at regional planning for affordable housing, factors that contributed to the success or failure of such planning, and promising new approaches. Based on a literature search, APA provided participants with a draft of a working paper describing a variety of programs and obstacles to regional affordable housing. Portions of the findings from the symposium have been incorporated in Chapters 3 and 8.

PREVIOUS STUDIES ON THE TOPIC

There have been a number of national studies proposing or evaluating regional approaches to affordable housing. These form the backdrop to this report and are described below.

National Commission on Urban Problems (Douglas Commission)

In 1968, the National Commission on Urban Problems issued its report, Building the American City. This commission was also known as the Douglas Commission, after its chair, Senator Paul Douglas. The commission's charge, among other responsibilities, was to examine "state and local zoning and land-use laws, codes, and regulations to find ways by which [s]tates and localities may improve and utilize them in order to obtain further growth and development" (NCUP 1968, p. vii). The wide-ranging scope makes it one of the most comprehensive and thorough studies to date in terms of examining the authority of governments to plan and regulate development.

The commission called for broadening housing choice through two regional approaches:

• Enactment of state legislation requiring multicounty or regional planning agencies to prepare and maintain housing plans. These plans would ensure that sites are available for development of new housing of all kinds and at all price levels. The commission proposed that in the absence of a regional planning body — given the broader-than-local nature of the plan and the importance of political approval of such plans — the state government should assume responsibility for the necessary political endorsement of the plan.
• Amendment of state planning and zoning acts to include, as one of the purposes of the zoning power, the provision of adequate sites for housing persons of all income levels. The amendments would also require that governments exercising the zoning power prepare plans to show how the community proposes to carry out such objectives in accordance with a county or regional housing plan. This would ensure that, within a region as a whole, adequate provision is made for sites for all income levels (p. 242).

The American Bar Association's Housing for All Under Law

The American Bar Association (ABA) Advisory Commission on Housing and Urban Growth published a far-reaching report in 1978, Housing for All Under Law: New Directions for Housing, Land Use, and Planning Law (ABA 1978). Funded with a grant from the U.S. Department of Housing and Urban Development, the report proposed a series of measures to increase housing opportunity and choice and to promote a more rational growth process.

The advisory commission took the position that, insofar as housing planning is concerned, local governments, at a minimum, have an affirmative legal duty to:

• plan for present and prospective housing in a regional context;
• eliminate those local regulatory barriers that do not make it realistically possible to provide housing for persons of low and moderate income; and
• offer incentives to the private sector in this regard (p. 445).

The report went on to review a variety of state and regional programs for housing planning, many of which are covered in this study, and also described the steps in devising a regional fair-share housing allocation plan. It recommended housing planning at the local, regional, state, and federal levels that "should be coordinated to effectively achieve a hierarchy of established goals and objectives" (p. 479). Local housing planning, it emphasized, should consider "regional housing circumstances and needs" and "must be assessed in the context of the region in which it is situated, to determine whether the community is responsive to housing needs of poorer households" (p. 479). Local governments, nonetheless, "should retain the major control over housing as long as local control is not abusive to overall state goals and regional responsibilities" (p. 479). Local governments, it said, must "deal with impediments to housing opportunity that are within their respective spheres of influence (e.g., land-use controls, building codes, etc.), and then cooperate in a metropolitan or regional effort to assess and balance the needs of neighboring jurisdictions" (p. 480). Adequate implementation of such housing planning, the advisory commission concluded, "requires government and private sector cooperation at all levels, sufficient funding, and technical assistance" (p. 480).

Advisory Commission on Regulatory Barriers to Affordable Housing

In 1991, the Advisory Commission on Regulatory Barriers to Affordable Housing, appointed by HUD Secretary Jack Kemp and also known as the Kemp Commission, issued its report, which reiterated many themes in earlier federal studies (Advisory Commission 1991). The Kemp Commission report called for the establishment of state and federal "barrier removal plans" for which the federal government would provide funding. The report noted that a number of states reviewed local regulations as part of a housing element or comprehensive planning requirement. It also favored state review of local barrier removal plans and HUD support for such efforts. The report also advocated that, where states required localities to submit barrier-removal plans to meet state housing or planning goals, federal law should be modified to permit HUD to accept, if substantially equivalent, the same barrier-removal submission required by the state in its own Comprehensive Housing Assistance Strategy (CHAS) review process (p. 6-3). (The CHAS process is required for receipt of federal Community Development Block Grant funds.)

While the report did not address regional approaches in any detail, they surfaced in a set of recommendations for state zoning reform:

The Commission strongly recommends that, as part of their overall barrier-removal strategy, [s]tates should thoroughly review and reform their zoning and land-planning systems to remove all institutional barriers to affordability. Reforms that [s]tates should consider include: a requirement that each locality have a housing element subject to [s]tate review and approval; effective comprehensive planning requirements; modification of zoning-enabling authority to include affordability and housing opportunity as primary objectives; [s]tate authority to override local barriers to affordable housing projects; [s]tate-established housing targets and fair-share mechanisms; and requirements of a variety of housing types and densities. (p. 7-8; emphasis added)

Although it did not recommend their endorsement, the report noted the existence of state housing trust funds, about 20 at the time, which provided loans for the construction or rehabilitation of affordable rental housing. The report observed that housing trust funds could potentially generate incentives for regulatory reform in two ways: (1) by conditioning the authorization of such loans to local governments in exchange for undertaking specific regulatory reforms; and (2) by structuring the number and size of grant and loan packages to be contingent upon a program of regulatory reform, "with the most cooperative municipalities receiving the most help" (p. 7-14).

Regional Housing Opportunities for Lower-Income Households

A 1994 study prepared for HUD by the Rutgers University Center for Urban Policy Research (CUPR), Regional Housing Opportunities for Lower-Income Households, was intended to provide researchers and policy makers with a sampling of tools across the U.S. to promote regional mobility and housing affordability (Burchell, Listokin, and Pashman 1994). It defined "regional mobility programs" as those that "allow lower-income households more freedom to pursue housing choice at a greater distance from their existing urban neighborhoods" (p. vi). The study grouped regional mobility and affordable housing programs into two main categories, with the second category divided into two subcategories: (1) planning need estimates, which include (a) required local housing plans and (b) local housing allocation; (2A) implementation activities related to housing production, which include (a) specialized access to appeals or rewards, (b) inclusionary zoning, and (c) regional public superbuilders¹; and (2B) implementation activities for housing funding and assistance, which include (a) affordable housing finance strategies and (b) portable certificates and vouchers. Within these categories, the report described both historical programs (those that no longer existed) and current ones.

The report did not offer up a model program, but did note that, within the various program categories it examined, there were "remarkable similarity and conceptual convergence. This is due to the fact that common difficulties affecting states and localities have led to an informal exchange of ideas and strategies" (p. 50). Many programs used private developers as the catalyst of regional affordable housing production via a requirement or incentive. As a consequence, the programs were market-driven; thus "[t]hey flourish in good economic times and wane in bad times" (p. 50). Almost all of the programs, the report said, used HUD Section 8 income guidelines (low- and very low-income).² Sometimes median income was determined for a region that was different from the HUD region of which the implementing jurisdiction was part, the report found, and, as a result, "housing is often provided at the top rather than throughout the Section 8 income range," meaning that very low-income persons were less able to participate (p. vii).

After inventorying and assessing these programs, the report predicted that "[s]tates and localities not already involved in affordable housing will be pushed unwillingly into affordable housing delivery by the pressures of unanswered housing demand" (p. ix). State strategies, the report concluded, "appear more durable ... if they actively encourage rather than mandate local participation. Head-to-head confrontations with the home-rule prerogative of municipalities typically culminate in de facto compliance or program rejection" (p. ix). (It should be noted that not all states give home-rule authority to municipal governments.)

ENDNOTES

1. The report defines "regional public superbuilders" as "public agencies acting in the capacity of a housing developer unaffected by local zoning, having the ability to override local zoning, condemn land, or all three. Public superbuilders may build affordable housing at the request of another government or on their own" (p. 37). An example of such an agency is the New York Urban Development Corporation, which had zoning override powers but was stripped of them by the New York legislature in 1973 (p. 38).

2. The U.S. Department of Housing and Urban Development's Section 8 program provides vouchers that allow lower-income recipients to live in market-rate units. Vouchers can be used for rent charges at any level. Very low-income families and certain other families or individuals apply to a local public housing agency (PHA) that administers the Section 8 program. When an eligible family comes to the top of the PHA's housing voucher waiting list, the PHA issues a housing choice voucher to the family. The PHA pays the owner the difference between 30 percent of adjusted income and a PHA-determined payment standard or the gross rent for the unit, whichever is lower. The family may choose a unit with a higher rent than the payment standard and pay the unit's owner the difference. ("Tenant based vouchers," http://www.hud.gov/offices/pih/programs/hcv/ tenant.cfm, accessed December 12, 2002.)