Housing Options Expand as Lots and Homes Get Smaller

Housing development within the United States needs a makeover. Past trends guided by regulations have led to a market saturated with single-family homes, garden apartments and condominiums, with little variety in between. A recent New York Times article emphasized how zoning regulations have created a dichotomy between single-family detached homes and large multifamily buildings, with single-family development favored across the country.  This has led to supply shortages and issues in affordability. Other research has revealed that there is a “missing middle” in housing types. A greater mix — not simply a supply increase — of housing types is needed to meet an increasing diversity of income, households and generational needs. NAHB’s new “Diversifying Housing Options with Smaller Lots and Smaller Homes” report explores the issues involved in generating this greater mix, such as smaller homes, duplexes, townhouses, small-scale multifamily and accessory dwelling units (ADUs), and provides relevant best practices on regulatory and design options and barriers. Some of the key findings illustrate:

• How increasing multifamily development can be done effectively through infill housing approaches, and
• Why both a greater supply of housing and a greater diversity of housing types are required to meet the today’s increasingly diverse demographic of needs.

The report goes into greater detail identifying ordinances and codes across the United States that enable the construction of more varied housing types and smaller, more affordable homes. The company evaluated more than 100 codes and ordinances from a variety of communities and cities across four categories: ADU ordinances, small lot ordinances, cottage court ordinances and form-based codes (infill and greenfield). Out of these, ADU ordinances, or those aimed at creating a secondary dwelling unit on the same lot as a main housing unit, have been the most effective in enabling a greater, more affordable housing mix. In further evaluating the wide array of ordinances and codes, best practices for each of the four categories are provided. For example, Portland, Ore., has passed ADU-promoting ordinances for nearly a century and in 2017 passed a statute requiring jurisdictions to allow ADUs wherever a house is allowed. A 2010 amendment waiving impact fees provided the greatest impact on ADU development; however, financing issues remain as construction costs have risen. As many may have found, implementing these types of new tools can also be difficult because of zoning and NIMBYism. Updating standards or codes to provide clear direction and to streamline the development review and approval process for these new housing types are critical for practicality and cost effectiveness. The report concludes with built examples that highlight how communities benefit from enabling smaller units, including proximity to nature and opportunity for community interaction for more individuals, and the availability of more land for other uses. Additional Resources:

• Deborah Myerson, a planning consultant, produced two recent pieces regarding these topics: how communities across the country are optimizing the use of ADUs, and how form-based codes can help expand housing supply.
• NAHB's Housing For All webpage includes key strategies and examples that can be used as conversation starters and a blueprint for collaboration with local officials, planners and policymakers.
• NAHB’s Land Use 101 toolkit identify more tools and techniques, including details about the various players involved in closing the financing gap and getting viable, attractive projects built.