To Solve the Housing Crisis, Cities and States Must Work Together

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Local Tools to Address Housing Affordability: A State-by-State Analysisis the fifth annual report produced in partnership with the 49 state municipal leagues. This post is part of a series highlighting findings from this new report.

No matter their size, level of prosperity or growth pressures, nearly all communities in the United States struggle with housing affordability. Whether the priority is supply of housing, quality of housing or helping households achieve economic mobility, cities need the proper tools and flexibility to meet the unique housing circumstances facing their communities.

Local Tools to Address Housing Affordability: A State-by-State Analysis, the fifth annual research collaboration between NLC and the State Municipal Leagues, examines the interactions between cities and states on tools to improve housing affordability, including inclusionary housing, rent control, housing vouchers, housing trust funds and states tax incentive programs.

The new research finds that depending on their state and home rule authority, the ability of cities to improve housing conditions varies extensively across the country. Our assessment of all 50 states and the District of Columbia across the five policy areas finds that the District of Columbia, as well as cities in New York and California have more tools to address housing affordability than other cities. Cities in Idaho, Indiana, Kansas, Texas and Virginia have fewer.

Here are our findings on the five tools:

  • Inclusionary housing policies are local programs that either require or incentive developers to build affordable housing units. Cities in 20 states and the District of Columbia are expressly permitted or face no legal barriers to implementing either mandatory or voluntary local inclusionary housing policies. Cities in 22 states face some legal barriers, mostly those restricting mandatory programs.
  • Rent control policies provide municipal governments the ability to regulate increases in residential rent prices. Cities in 13 states and the District of Columbia have express or limited authority to implement rent control. Oregon recently became the first state to mandate statewide rent control.
  • Housing vouchers as a source of income protects voucher holders against discrimination from housing providers. Cities in 25 states and the District of Columbia have either state law protections or local protections for those using housing vouchers as a source of income. Cities in 23 states do not have state or local sources of income protections for housing voucher holders. These states also do not have explicit restrictions on local fair housing, meaning that many cities could create policies to limit discrimination and help extend housing options to those using housing vouchers.
  • Housing trust funds are established, ongoing, public funding sources for low-income housing development in both states and cities. Wyoming is the only state without any state or local housing trust funds. There are 14 states without city-level housing trust funds, but those states do not have any laws prevent local governments from establishing them. In many of these the state funds are the sole source of funding because of low state populations or very robust state-level funds, both of which decrease the need for additional funding at the local level.
  • State tax incentives are state supplements to federal tax incentives – programs that issue tax credits to developers for the acquisition, rehabilitation or new construction of rental housing targeted to lower-income households. While cities do not have direct control over how these funds are allocated, the program encourages private developers to increase the supply of affordable housing resulting in substantial affordable housing development in urban centers. Nineteen states and the District of Columbia have state-level tax incentives for new construction and/or rehabilitation of existing low-income housing.

To learn more about the housing affordability toolbox for cities in your state, download the report here.

Domenick-Lasorsa-small-2.jpgAbout the Author: Domenick Lasorsa is the associate for Veterans and Special Needs in the NLC Center for City Solutions. Follow Domenick on Twitter at @DomLasorsa