Podcast: How Missing Middle Housing Can Help Close Affordability Gap
On the latest episode of NAHB’s podcast, Housing Developments, CEO Jim Tobin and COO Paul Lopez are joined by NAHB member Justin Wood, a West Coast builder, to discuss how he is navigating the current market in Oregon and Washington state, and what solutions have been successful.
How Middle Housing Can Increase Supply and Entry-Level Access
Wood’s business focuses on entry-level homes for first-time buyers, typically on infill lots in existing neighborhoods. Where it had previously built single-family detached homes, the company now includes middle housing — in this case, two- to four-unit developments on single-family lots.
“Oregon is one of the leading states, if you will, that kind of has embraced middle housing,” Wood explained. “So now you can pretty much go into most single-family residential neighborhoods and build a threeplex or a fourplex on it.”
“That fourplex on a single-family lot allows us to put that at a price point that’s easier for people to get into that first-time home buyer market,” he added.
By allowing middle housing, the state unlocked greater supply and more access to entry-level homes. Wood outlined several programs Portland has instituted to support access to these homes, including waiving impact fees — which can be $30,000-$35,000 on the price of a new home — and instituting limited tax abatement to lower property taxes for the first 10 years for lower-income buyers purchasing homes below the median area price.
Top Challenges to Home Building
Zoning reform is a step toward helping address the supply gap for the housing market, but there were still ample issues for NAHB members to take to Capitol Hill during NAHB’s Legislative Conference, including the natural gas ban and the 21st Century ROAD to Housing Act.
Addressing housing affordability and bridging the supply gap were key topics that policymakers were especially receptive to discussing.
“I can’t remember a time when we’ve gone up on the Hill where there was more broad support, even from the Democratic members from the Oregon delegation, saying, ‘Yeah, we need more housing. How do we get more housing? What do we need to do to help you build more housing?’” Wood noted. “We may disagree on how they want us to get there, but at least they’re showing a consensus that we need it. And I think NAHB’s going to help drive that message and help spread that up on the Hill.”
One of the unique things to the West Coast, especially in Oregon, is restrictive tree codes.
“For people who don’t understand or markets that don’t have them, we can have one lot in a residential area with a fairly standard-sized tree, and that tree could cost us $30,000-$40,000 in fees to cut down,” Wood explained. “And it’s a mishmash all across the state of different cities that have those regulations. It’s a killer, especially at a time when you’ve got cities, especially in our area, that want density and infill and all that stuff.”
Listen to the full episode of the podcast below and subscribe to Housing Developments through your favorite podcast provider or watch all the episodes on YouTube.