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The Role of Local Government

There are many factors that impact housing affordability at the local level, from macroeconomic trends affecting wages, interest rates and construction costs to regional job growth and housing supply to local land use policies that affect what can be built and the cost to build it. Local governments have a limited, but important set of tools to help create a healthy housing market.

Housing Policies and Programs Overview

Local governments primarily impact housing markets by setting the regulatory environment (land use) in which developers make investment decisions, by deploying public funds (subsidy) for infrastructure, amenities and development and by setting local policies (tenants’ rights) to balance the interests of tenants and property owners.

A healthy housing market requires policy makers to adopt a comprehensive approach that incorporates land use, subsidy and tenants’ rights. Each of these tools can help address different aspects of failures in a local housing market and are more effective and less costly when used together. However, very few communities in America have been able to adopt and implement a comprehensive approach to housing due to local political constraints.

Land Use and Development Approval Process: Zoning authority and development approval processes can indirectly improve affordability by increasing the supply of homes and reducing the growth of the cost of homes. Or land use tools can be used to directly produce affordable homes by requiring, or incentivizing, as part of market-rate housing development.

Examples of indirect approaches include expanding by-right zoning, expedited review process, reducing parking requirements or allowing two- and three-homes homes in all parts of a community.

Examples of direct approaches include inclusionary zoning, affordable housing incentives or affordable housing overlays.

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Tenants’ Rights: Local and state policies that preserve existing affordable homes and housing stability by using laws and regulations that provide greater rights to tenants around their interests in the home they rent relative to the owner of that home.

Examples include just cause eviction, rent stabilization, tenant opportunity to purchase, right to counsel.

Explore Tenants' Rights Policies & Programs

Subsidy: Public, and sometimes philanthropic, funding that is provided through below-market loans, grants, or ongoing payments that close the gap between what a household can afford to pay for a home and the cost to develop and maintain that home.

Examples include down payment assistance grants, discounted owner-occupied rehabilitation loans, below-market mortgages for affordable apartment buildings, the sale of discounted public land, tax abatements, housing choice vouchers.

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Evaluating Housing Policies and Programs

Determining the right policies and programs to prioritize involves an iterative process of evaluating a policy or program’s alignment with your community’s housing goals, feasibility to implement and potential impact relative to the resources required to implement it.

The following worksheet offers a set of criteria and guiding questions to evaluate potential land use, subsidy, and tenants’ rights policies and programs.

Housing Policy Evaluation: Implementation Needs - PDF