How Minimum Lot Size Requirements Maximize the Housing Crisis
An example of two small houses that were added to a lot with an existing residence. (Image courtesy of Neil Heller.)
Why should your city jettison its outdated zoning rules and allow more housing construction on small and irregular lots? Let Alli Thurmond Quinlan count the ways:
“The city that does will see more attainable house price points. It will see more housing units that are a better fit to small-household demographics. This also means it will free up citizen budgets and time such that, instead of spending all your time on a commute and instead of spending all your money on a house that's too big for you, you will have time and capacity and energy to be investing in your community.”
Quinlan, an Arkansas-based builder with FlintlockLAB and acting director of the Incremental Development Alliance, regularly works to convince cities of the value of incremental projects and that their zoning practices are hindering a much-needed expansion of housing options.
A large percentage of North American cities embraced restrictive zoning rules in the mid-to-late 20th century. Many of these rules came at a time when suburbs were burgeoning and, unfortunately, they caused cities to forfeit many of the advantages of traditional city development. Compounding the challenge are rules that put some multiunit projects under the commercial code (which is much more expensive) and funding streams that are easily accessible for single-family homes and large multifamily projects, but very little in between.
“As an example, Atlanta, which is very typical of a lot of cities, adopted a new zoning ordinance in the early 1980s and copied a lot of suburban planning standards into our city that were not historically accurate,” explains Eric Kronberg. His firm, Kronberg Urbanists Architects, has executed a number of projects that required careful analysis of existing zoning rules and creative solutions.
One example is La France Walk, which added 25 units on 2.5 acres in a “pocket community” in Atlanta. By adding a mix of smaller, semidetached options, Kronberg’s firm was able to offer a range of prices from $275,000 to $675,000. Kronberg says those lower price points are critical in the face of an affordability crisis and notes that the one-bedroom units on this and similar projects were among the first to sell. Better still, the success of the project “became the catalyst for me to show our clients that there's a market in this that matters.”
Neil Heller has been waging a similar battle in Portland, Oregon, and also emphasized the creativity required to modify or work around zoning statutes. His firm, Neighborhood Workshop, has done projects that he calls “backyard infill,” in which smaller, stand-alone dwellings are built on properties with existing houses. This substantially reduces land-acquisition costs and has enabled more affordably priced homes in some of Portland’s most popular neighborhoods.
One project that Heller consulted on took a city lot with an existing three-bedroom house and added two smaller, stand-alone dwellings that could be sold separately. This project by developer Noah Rosen put two appealing new residences on the market for well below the going rate for a single-family home in an area that has become out of reach for most middle-class buyers.
The two stand-alone houses that Neil Heller consulted on creating with developer Noah Rosen. (Image courtesy of Neil Heller.)
In another example in Portland, Heller cites the case of an older homeowner who was able to subdivide his lot to allow for new construction. By doing so, he made enough money to repair his existing house and retire with enough money to fund his medical expenses. “Minimum lot sizes seem like wonky policy, but really do make an impact in people's lives.” Heller created this graphic to illustrate the potential benefits of the project:
Heller, who also serves on the Incremental Development Alliance, points to another big advantage of this style of infill development: This type of construction is much more palatable to neighbors who would otherwise resist any rezoning for fear of major change. “Yes, you do notice change, but it's almost imperceptible … the average person just going down the street would probably not even notice what's going on in the backyard.”
Quinlan bolsters that argument with a fiscal one. “A street right-of-way, fully built out, is your most expensive public infrastructure. So if a city can maximize the number of houses on that street by having some of them face out onto a boardwalk, a sidewalk or a lane,” it can bolster its residential tax base with minimal infrastructure costs.
There’s a common through line in all of these projects: fee-simple purchases. All aspects of the real estate industry — especially finance streams — are geared toward the easiest possible transaction. A project that requires builders to create a condominium or planned unit development to accommodate zoning rules adds complexity and cost that gets passed on to the buyer. Enabling a fee-simple transaction lets buyers own the dirt under their property and gives underwriters greater confidence in its viability. The more ways your community can enable builders to develop housing options with fee-simple sales, the faster they can address North America’s glaring housing shortage.
Reform on this issue is sadly lagging given the scale of the crisis. Developers and advocates often cite South Bend, Indiana, and Durham, North Carolina, as cities that have innovated their rules and are seeing benefits. Under Durham’s revised zoning, “you could take a standard 50 by 150 (foot) lot, very common in the Southeast, and end up with five units of housing, three of which could be for sale,” says Kronberg.
Several states — including Oregon, California, Washington, Montana, and, most recently, Vermont — have initiated statewide zoning reform by disallowing single-family-only zoning. As a result, they've seen an increase in missing-middle construction. In Canada, the federal government encouraged cities to reform their zoning bylaws by offering funding for housing, and the province of British Columbia passed legislation requiring cities to update their official community plans to allow up to four units of housing per lot (or more near high-frequency transit). This helped the province and cities throughout Canada take rapid action on an issue that is often ponderous to address.
Quinlan cites these examples to argue that some of these changes could and should be done almost instantaneously. “Your city council can go and change your zoning at the next meeting with a majority vote. From a legal standpoint, they have that authority.” The challenge for advocates is to grow the consensus that leads to that decision and to remind leaders of the barriers to increasing housing options. Then, if such changes “result in things that they don't like, they can change it again. It doesn't have to be perfect before you do anything.”
Ben Abramson is a Staff Writer at Strong Towns. In his career as a travel journalist with The Washington Post and USA TODAY, Ben has visited many destinations that show how Americans were once world-class at building appealing, prosperous places at a human scale. He has also seen the worst of the suburban development pattern, and joined Strong Towns because of its unique way of framing the problems we can all see and intuit, and focusing on local, achievable solutions. A native of Washington, DC, Ben lives in Venice, Florida; summers in Atlantic Canada; and loves hiking, biking, kayaking, and beachcombing.