Zoning may not be something most people think about every day. But behind the scenes, local land use rules have been blocking affordable housing, hindering climate action, and exacerbating racial segregation, according to advocates for reform.

In this episode of the Land Matters podcast, city planner M. Nolan Gray, author of the recent book Arbitrary Lines: How Zoning Broke the American City and How to Fix It, and Sara Bronin, professor at Cornell University and founder of the National Zoning Atlas, talk about how zoning can be tweaked for better outcomes.

This conversation comes at a time when at least 10 states are moving forward to modify zoning at the local level—to remove restrictions on multifamily housing development near transit stations, for example. The rationale is that there’s not nearly enough affordable housing, and local land use regulations skew toward single-family homes on large lots, which are inevitably more expensive. That’s just one example of the kind of overhaul being proposed.

“I would argue that zoning is the most significant regulatory power of local government because it [not only] governs where we can put housing and factories and parks and shops . . . but it actually has significant impacts on the economy, and even I think the very structure of our society,” said Bronin, who has been a leader in a zoning reform effort called Desegregate Connecticut.

Why all the attention to zoning now? Gray, who has been active in the organization California YIMBY (Yes in My Back Yard), says many Americans are frustrated with the lack of affordable housing, and have been motivated to understand the factors behind that shortage.

“There’s a huge appetite from across the political spectrum for reform ideas here,” he said, as the affordability crisis intensifies not only in California but throughout the country.

The reform measures have included eliminating single-family-only zoning, clearing the path for modest increases in density where it is currently not allowed; lifting prohibitions on accessory dwelling units, such as carriage houses or apartments over garages; and reducing or eliminating excessive requirements to build parking at new developments, which drive up construction costs.

You can listen to the show and subscribe to Land Matters on Apple Podcasts, Google Podcasts, Spotify, Stitcher, or wherever you listen to podcasts.
 

Further Reading

Cancel Zoning: If We Want to Fix the Housing Affordability Crisis, Segregation, and Sprawl, Zoning Must Go (The Atlantic)

National Zoning Atlas (Cornell University)

President’s Message: Zoning’s Asteroid Moment (Land Lines)

Shifting Gears: Why Communities Are Eliminating Off-Street Parking Requirements—and What Comes Next (Land Lines)

Zoning Reform Creates New Model for Smart Growth in Walla Walla, Washington (Planning)

Zoning Rules! The Economics of Land Use Regulation (Lincoln Institute of Land Policy)
 

Anthony Flint is a senior fellow at the Lincoln Institute of Land Policy, host of the Land Matters podcast, and a contributing editor of Land Lines.

El Instituto Lincoln de Políticas de Suelo ha trabajado en América Latina y el Caribe por 29 años, 27 de los cuales estuvieron bajo el liderazgo del economista urbano Martim Smolka. El Instituto comenzó su trabajo en la región con el objetivo de ayudar a los líderes a enfrentar el desafío de los asentamientos informales en tiempos de rápida urbanización.

Desde entonces, el Instituto Lincoln ha trabajado con miles de planificadores urbanos, funcionarios de gobiernos locales, y otros gestores de políticas y profesionales a lo largo de América Latina y el Caribe para la creación de nuevas políticas que fomenten la equidad social y la sostenibilidad a través del uso efectivo del suelo y del financiamiento con base en el suelo.

El Instituto Lincoln ha contribuido a la adopción de la recuperación de plusvalías como método para la distribución equitativa de los beneficios y cargas de la urbanización, así como al financiamiento de infraestructura y otras inversiones en áreas marginales. El Instituto publicó el reporte de Smolka “Implementación de la recuperación de plusvalías en América Latina” en 2013, considerado una referencia en el tema. Dos años antes había publicado el reporte fundamental sobre el mejoramiento de los asentamientos informales “Regularización de asentamientos informales en América Latina”.

Con la jubilación de Smolka a principios de este año, el Instituto Lincoln tiene una nueva cara en la región, la economista Anacláudia Rossbach, quien asumió como directora para América Latina y el Caribe en agosto. Rossbach se desempeñó hasta hace poco como gerenta regional de Cities Alliance, donde contribuyó a la transferencia de conocimiento y mejores prácticas entre líderes en políticas urbanas y de vivienda. Anteriormente, fue coordinadora de proyectos para el mejoramiento de asentamientos informales en Brasil, fundó una organización no gubernamental, y también fue parte del Banco Mundial como especialista sénior para vivienda.  

En esta entrevista editada, Anacláudia Rossbach habla sobre el trabajo del Instituto Lincoln en América Latina y el Caribe, y los desarrollos que pueden esperarse para la región en los próximos años.

Will Jason: ¿Conocía al Instituto Lincoln antes de enterarse de este cargo?

Anacláudia Rossbach: El Instituto Lincoln me era bastante familiar porque tiene una gran reputación en América Latina. Entre las entidades que trabajan en temas urbanos, el Instituto Lincoln es muy conocido y cuenta con una red muy fuerte. Y yo entendía el gran impacto: no es difícil encontrar a alguien que trabaje en un municipio, en un gobierno nacional, que haya sido parte de los programas educacionales del Instituto.

WJ: ¿Cuál cree que es el mayor valor que el Instituto Lincoln ha entregado a la región?

AR: Creo que hay mucha más conciencia con respecto al rol fundamental que tiene el suelo en la planificación y el desarrollo urbano. El tema de la recuperación de plusvalías ha sido bien introducido en la región, por lo que hoy las personas, los profesionales y todos quienes trabajan en los municipios comprenden la importancia de la recuperación de plusvalías.

Si se compara el panorama de hace 20 años y el de hoy, se puede ver que actualmente en América Latina tenemos muchas ciudades que han introducido instrumentos de financiamiento con base en el suelo o instrumentos más avanzados de administración de suelos en la planificación urbana. Se ven cambios en los marcos legales nacionales de los países.

Pero por supuesto, todavía tenemos un largo camino por delante porque, bueno, la informalidad aún está muy presente en la región. Es la región más desigual del mundo. Se puede ver que las ciudades están segregadas, esto es visible.

WJ: ¿Cuál cree que es el rol más importante que el Instituto Lincoln puede continuar ejerciendo? ¿Y qué tipo de cambios las personas de la región pueden esperar del Instituto Lincoln a partir de este momento?

AR: Por supuesto que el Instituto Lincoln no cambiará la posición que ha promovido por largo tiempo, pero creo que necesitamos poner más atención a la informalidad. Notamos que durante la pandemia estos asentamientos informales, estas ocupaciones informales en nuestras ciudades sufrieron, y si bien aún no tenemos números, creo que podríamos ver alguna expansión de la informalidad del suelo en América Latina. Ya sabemos que tenemos más pobreza.

La pobreza ha aumentado durante el COVID y tenemos tasas de desempleo más altas en los países de la región. Entonces, la vivienda será menos asequible y, por lo tanto, la probabilidad de que se creen ocupaciones informales aumentará. Debemos ser inteligentes para saber combinar medidas preventivas y correctivas a través de instrumentos de administración del suelo, planificación urbana, estrategias para viviendas de bajos ingresos y mejoramiento de asentamientos informales para ser capaces de enfrentar la magnitud del problema que enfrentamos hoy y que enfrentaremos en el futuro si las condiciones actuales se mantienen.

El otro asunto es que hemos estado desarrollando capacidades en la región por un tiempo, pero necesitamos encontrar una manera para extender el alcance de lo que hemos estado haciendo. Tenemos muchas ciudades en la región, tenemos una situación clara de falta de capacidad a nivel de las ciudades, y hablo de ciudades de diferentes tamaños. Debemos pensar estratégicamente cómo podemos sacar ventaja de nuestro impacto y tener un mayor alcance en términos del aumento de capacidad.

Y luego, por supuesto, debemos ser capaces de medir de mejor manera nuestro impacto.

¿Cómo podemos encontrar maneras de generar mediciones cualitativas del impacto, o incluso mediciones cuantitativas del impacto que estamos generando en la región? Veo un gran potencial del Instituto Lincoln para aumentar el impacto en la región a través de asociaciones y alianzas. El Instituto ya ha estado trabajando a través de asociaciones, comunidades de práctica y redes, pero creo que en el futuro necesitamos reforzar y aumentar las asociaciones que hemos generado en el pasado.

Y por supuesto, necesitamos abordar al gran desafío que todos enfrentamos, que es el cambio climático. En América Latina tenemos una situación en que los más vulnerables, los más pobres de las ciudades, son los más afectados por el cambio climático. Aún tenemos muchas personas sin agua en la región. Tenemos este importante desafío bajo la gran sombra del cambio climático, que afecta a una parte importante de la región, una región que contribuye en menor medida a las emisiones globales pero que es afectada en mayor medida por los desastres y por sus consecuencias.

WJ: Volvamos a la distinción que hizo cuando estaba hablando sobre la informalidad, entre medidas correctivas y medidas preventivas. ¿Podría explayarse más sobre qué ha hecho y qué podría hacer el Instituto Lincoln en cada una de estas áreas, que son muy distintas?

AR: No sé si son tan distintas; creo que están interrelacionadas. Necesitamos reforzar la manera en que prevenimos la aparición de la informalidad. Y esto es lo básico: entregar para la construcción de viviendas suelo bien localizado y con servicios. Es más barato proveer infraestructura al comienzo que instalar servicios retroactivamente en los asentamientos informales. También necesitamos asegurar la disponibilidad de viviendas de bajos ingresos a través regulaciones para viviendas inclusivas u otras regulaciones.

Pero la informalidad ya está ahí y afecta nuestras vidas diarias. ¿Qué aspectos de las políticas de suelo el Instituto puede utilizar como medidas correcticas? Regularización del suelo, por ejemplo. En Brasil, por nombrar un caso, incluso tenemos empresas que realizan regularización del suelo. Es un mercado, es una política pública.

Pienso que podemos encontrar maneras para apoyar este tipo de iniciativas: mejorar los asentamientos informales a través de una combinación entre regularización del suelo, desarrollo de infraestructura, acceso al agua y protección de los ambientes naturales. Todas estas son áreas que pueden ser miradas holísticamente. El suelo es parte de un tejido vivo, donde todas estas cosas están sucediendo y donde la gente vive.

WJ: ¿A su juicio, qué rol jugará la recuperación de plusvalías en la regularización?

AR: La recuperación de plusvalías podría financiar la regularización, como fuente de fondos, porque es un instrumento que se desarrolla a nivel de ciudades. Usualmente, para las grandes regularizaciones o programas de mejoras, las ciudades dependen de los gobiernos nacionales o de subsidios nacionales.

Pero también al regularizar el suelo lo estamos incorporando al mercado. Estamos mejorando la capacidad de la ciudad como un todo para sacar ventaja de la recuperación de plusvalías porque estamos creando un nuevo activo en la ciudad.

WJ: En un tema más liviano, ¿qué país de América Latina tiene la mejor comida? ¿Cuál tiene la mejor música?

AR: Esa es una pregunta capciosa, porque me gustan muchos tipos de música y de comida de América Latina. Pero debo confesar mi amor eterno a México. Pienso que el país tiene comida increíble y, en general una cultura muy rica. Me gustan especialmente las voces femeninas de la escena musical mexicana actual.

Imagen: Anacláudia Rossbach.

The Lincoln Institute of Land Policy has worked in Latin America and the Caribbean for 29 years—the past 27 of them under the leadership of urban economist Martim Smolka. The institute entered the region with the goal of helping leaders to address the challenge of informal settlements at a time of rapid urbanization.

Since then, the Lincoln Institute has worked with thousands of urban planners, local government officials, and other policy makers and practitioners throughout Latin America and the Caribbean, contributing to new policies to promote social equity and sustainability through effective land use and land-based financing.

The Lincoln Institute has contributed to the adoption of land value capture as a method to equitably distribute the benefits and burdens of urbanization, and to finance infrastructure and other investment in marginalized areas. The institute published Smolka’s authoritative report on the subject, Implementing Value Capture in Latin America, in 2013, two years after its foundational report on the upgrading of informal settlements, Regularization of Informal Settlements in Latin America.

With Smolka’s retirement earlier this year, the Lincoln Institute has a new face in the region, Anacláudia Rossbach, who took over as director for Latin America and the Caribbean in August. An economist, Rossbach joins the Lincoln Institute from Cities Alliance, where she served as the regional manager for Latin America and the Caribbean, supporting the transfer of knowledge and best practices among leaders in housing and urban policy. Previously, Rossbach oversaw major slum upgrading projects in Brazil, founded a nongovernmental organization, and served as a senior housing specialist for the World Bank.

In this edited interview, Rossbach speaks about the Lincoln Institute’s work in Latin America and the Caribbean, and potential developments in the region in the coming years.

Will Jason: How familiar were you with the Lincoln Institute before you learned about this position?

Anacláudia Rossbach: I was quite familiar because the Lincoln Institute has a strong reputation in Latin America. Among stakeholders working on urban issues, the Lincoln Institute is very well known and has a very strong network. And I understood the huge impact. It’s not difficult to find someone working in a city, in a national government, that has been part of a Lincoln Institute educational program. 

WJ: What do you see as the greatest value that the Lincoln Institute has been delivering to the region?

AR: I think there is more awareness around the key role that land plays in urban planning and development. The topic of land value capture was very well introduced in the region. Today, people, professionals, practitioners working in cities, they understand the importance of land value capture.

If you look at the big picture 20 years ago and now, you see that today in Latin America, we have many cities that have introduced land-based finance instruments or more advanced land management instruments in urban planning. You see changes in the national legal frameworks of countries.

But still, of course, we have a long way to go because, well, informality is still very prevalent in the region. The region is the most unequal in the world. You see the cities are segregated; this is visible.

WJ: What do you see as the most important role that the Lincoln Institute can continue to play? And what types of changes can people in the region expect from the Lincoln Institute now?

AR: Of course, the Lincoln Institute will not change the position that it has been advocating for a long time, but I believe that we need to pay more attention to informality. We noticed during the pandemic how these informal settlements, these informal occupations in our cities suffered, and we don’t have numbers yet, but I believe we might see some expansion in the informality of land in Latin America. We know that we have more poverty already.

Poverty has grown during COVID and we have higher unemployment rates in the countries in the region. So, housing will be less affordable and then the likelihood to create informal occupations and so on will increase. We have to really be smart on how to combine preventive and curative measures through land management instruments, urban planning, low-income housing strategies, and slum upgrading to be able to address the size of the problem that we face now, and will face in the future if the current conditions prevail.

The other thing is that we have been building capacity in the region for a while, but we need to see a way to extend the outreach of what we have been doing. We have many cities in the region, we have a clear situation of lack of capacity at the city level, and I’m talking about different sizes of cities. We need to strategically think how we can leverage our impact and have a bigger outreach in terms of building capacity. 

And then, of course, we should be able to measure our impact more. How can we find ways to go for qualitative assessments of the impact or even quantitative assessments of the impact that we are generating in the region? I see a great potential for the Lincoln Institute to increase impact in the region through partnerships and alliances. The institute has been already working through partnerships, communities of practice, and networks but I believe in the future we need to strengthen and add to some of the partnerships that we have been generating in the past.

And of course, we need to address the big challenge that we all face, which is climate change. We have, in Latin America, a situation where the most vulnerable, the poorest in the city, are most affected by climate change. We still have many people without water in the region. We have this major basic challenge in the region under this big shadow of climate change, which is affecting a lot of the region, a region that contributes less to emissions globally, but is being highly affected by disasters, by the consequences.

WJ: Let’s come back to the distinction that you made when you were talking about informality, between curative measures and preventive measures. Could you please talk a little bit more about what the Lincoln Institute has done and could do in each of these two areas, which are very distinct?

AR: I don’t know if they’re so distinct; I think they are interrelated. We need to strengthen the way we prevent informality from taking place. And this is, well, the basics: provide well located, serviced land for housing. It’s cheaper to provide infrastructure at the beginning than it is to retrofit slums with services later. We also need to make sure there are low-income housing options available through inclusionary housing or other regulations.

But informality is already there, and it’s affecting our daily lives. What are the aspects of land policy that the Institute can use as a curative measure? Land regularization, for example. In Brazil, for instance, we even have companies doing land regularization. It’s a market, it’s a public policy.

I think we can find ways to support these kinds of initiatives—improving informal settlements through a combination of regularization of land and infrastructure improvement, access to water, and protection of natural environments. These are all areas that we can look at in a more holistic manner. Land is part of a living tissue, where you have all these things happening and you have people living. 

WJ: What role do you see land value capture playing in regularization?

AR: Land value capture could finance regularization, as a source of funding, because land value capture is an instrument that is developed at city level. Usually, for big regularization or upgrading programs, cities depend on national governments, on national grants.

But also, once you regularize land, you are bringing land to the market. You are adding value to the city. You are improving the capacity of the city as a whole to leverage land value capture because you’re bringing a new asset to the city.

WJ: On a lighter note, which Latin American or Caribbean country has the best food? Which has the best music?

AR: This is a tricky question, because I am very fond of many types of Latin American music and food. But I need to confess my eternal love for Mexico. The country has amazing food, and to me a very rich culture overall. I particularly like the female voices from the Mexican contemporary musical scene.

Will Jason is the director of communications at the Lincoln Institute of Land Policy. 

Image: Anacláudia Rossbach

Zoning is often considered a timeless element of land policy and planning. And it is. Zoning originated in Asia more than three millennia ago. In those days, it was used to designate land uses behind city walls or to separate people by caste. The practice was adopted more recently in the United States to pursue similar ends. It is now one of the biggest impediments to sustainability in U.S. cities in the 21st century. 

I’ve made my feelings about hyperlocal land control known for many years. A decade ago, on a panel with Nic Retsinas, then director of the Joint Center for Housing Studies at Harvard, I opined that home rule and local land use controls were “dinosaurs” that made it almost impossible to coordinate regional transportation planning and affordable housing efforts. Nic reminded me and the audience that powerful political and economic forces stood firmly in the way of land policy reform. And he noted that dinosaurs lasted for millions of years before becoming extinct—because of a random asteroid colliding with Earth, not natural selection. 

But now, something almost as rare as a planet-changing asteroid is afoot in the world of land policy—bipartisan agreement. Numerous blue, red, and purple states have passed or are contemplating efforts to preempt local zoning so they can advance critical policy objectives. Why the sudden shift? Because many policy makers now understand that the national affordable housing crisis cannot be addressed without structural changes to the rules of the game. Other policy makers know that we cannot address one of the ugliest manifestations of zoning—spatial segregation by race and class—without aggressive affirmative action. 

Although we are seeing bipartisan agreement on the need for reform, the motivations of policy makers are quite different. Advocates from the right argue that the housing crisis is an artifact of overregulation that stifles housing production. These critics believe zoning reform will unleash market forces that will confront the housing crisis by accelerating new production. Advocates from the left argue that we cannot build affordable housing in places we need it most because of land policies that have effectively excluded people based on race and income for generations, such as minimum lot sizes and bans on multifamily housing. Zoning reform will make it possible, they say, to build affordable housing in “high opportunity” places with good schools and decent jobs. 

State preemption of local zoning is not new. In 1969, Massachusetts passed Chapter 40B, a measure that allows the state to override local zoning and approve mixed-income, multifamily developments in jurisdictions with little affordable housing. Although it has helped to promote some affordable housing development in some affluent suburbs, it was not a game changer, and few other states considered following suit, until very recently. 

Now, some 10 states are ready to preempt local zoning to permit development of multiple housing units on lots that are currently zoned for single-family homes. These include the right to add accessory dwelling units (ADUs) to single-family lots in Connecticut, Nebraska, Utah, Oregon, Maryland, California, and Washington; approving “middle housing,” two- to four-family townhomes, on lots zoned for single families in Virginia, Utah, Nebraska, Washington, and Maryland; or complete preemption of local government efforts to prohibit multifamily housing development on single-family lots in Oregon, California, Virginia, Maine, and Washington. Massachusetts and California also recently mandated upzoning in “transit-rich” communities. Clearly, local control over land use is no longer sacrosanct.  

Although zoning practice is thousands of years old, in the United States it is less than a century old, with a few exceptions. States began granting municipalities the power to dictate land uses in the 1920s, based on the Standard State Zoning Enabling Act drafted by the Department of Commerce in 1923. But what states giveth, states can taketh away. It is sometimes necessary for higher levels of government to supersede the decisions of lower levels of government to promote general welfare or address negative externalities that are artifacts of uncoordinated actions at lower levels. Too often, state efforts to override local governments are misguided; for example, when state policy makers curry favor from voters by imposing property tax limits. In the case of zoning, the need for state action is clearly defensible. 

We should celebrate the fact that we are moving in the right direction—mustering the political will to take on a challenge that was, until very recently, considered impossible. But we still know less about zoning than we should. Each state, and often individual jurisdictions in a state, developed its own zoning conventions, which makes it extremely difficult to compare zoning practices among them. It also makes it almost impossible to understand the implications of zoning decisions on land values, development patterns, or how zoning reform might address big challenges like the housing crisis, spatial inequality, or urban sprawl. This too is changing. 

Last year, a small team of visionaries at Cornell Law School, led by Professor Sara Bronin, produced the first Zoning Atlas for the State of Connecticut. Using spreadsheets, maps, and geographic information systems, the team documented, with impressive granularity, residential zoning practices in 180 jurisdictions with 2,622 zoning districts. Incredibly, this required reviewing more than 30,000 pages of text describing zoning practices—in one state!  

This herculean task apparently was not a big enough challenge for this plucky band of researchers. The Cornell team recently launched an effort to build a National Zoning Atlas. Now, with a field-tested methodology for creating the Zoning Atlas in Connecticut, they have set out to crowdsource zoning data from the rest of the country using the same methods. So far, self-organized teams in 11 states are participating. When they succeed at building the national atlas—and the Lincoln Institute of Land Policy will do all it can to make sure that happens—a new era of land policy scholarship will arrive. Debates about the costs, benefits, and consequences of zoning reform will be informed by real data. 

Zoning reform alone is not sufficient to solve the national housing crisis. But it is necessary. And we need to know a lot more about current zoning practices, and the potential benefits of improved zoning practice, to address the ills generated by decades of bad practice. A century of decentralized and isolated local control of land produced unacceptable levels of racial and economic segregation, urban sprawl that contributed to the climate crisis, and an almost unassailable affordable housing crisis. With the unprecedented alignment of political will with new tools and knowledge, possible solutions to this triple threat are closer than they have ever been. 

George W. McCarthy is president and CEO of the Lincoln Institute of Land Policy. 

Image: The interactive Connecticut Zoning Atlas is the first stage of a national effort to document zoning across the United States. Credit: National Zoning Atlas.

This interview has been edited for length and clarity. The full conversation is available as a Land Matters podcast. 

Jesse Arreguín was elected mayor of Berkeley, California, in 2016, becoming the first Latino to hold the office and, at 32, the youngest mayor in a century. The son and grandson of farmworkers, Arreguín grew up in San Francisco. At nine, he helped lead efforts to name a city street after activist Cesar Chavez, beginning a lifelong commitment to social justice.  

After Arreguín graduated from the University of California, Berkeley, he stayed in the city, serving on boards including the Housing Advisory Commission, Rent Stabilization Board, Zoning Adjustments Board, Planning Commission, and City Council. As mayor, Arreguín—who is also president of the Association of Bay Area Governments—has prioritized affordable housing, infrastructure, and education. He recently met with Senior Fellow Anthony Flint at City Hall to talk about this city of 125,000, with a focus on housing and the task of building more of it. Fittingly, the sounds of construction could be heard outside the fifth-floor office suite. 

ANTHONY FLINT: It seems like Berkeley has become a national symbol of the YIMBY/NIMBY [Yes in My Back Yard/Not in My Back Yard] divide. What should developers be contributing to increase supply, provide different housing options, and increase density at appropriate locations? 

JESSE ARREGUÍN: I think a lot needs to be done by government, and we’re seeing a lot of leadership being demonstrated by our governor, by the state legislature, by our attorney general, who established a housing strike force to enforce state housing laws, and by regional and local government. In Berkeley, over the past several years, we have taken significant steps to pass laws to streamline production and encourage a variety of different housing options in our community. 

We’ve also made a commitment that we are going to end exclusionary zoning. I think part of the reason why Berkeley is a symbol of the debate happening in cities throughout the country is because Berkeley is the birthplace of exclusionary zoning. In 1916, the city adopted its first zoning ordinance to zone the neighborhoods in the Elm-wood District as single-family to prevent the construction of a dance hall. Not surprisingly, many people who would frequent that dance hall would predominantly be people of color. Sadly, single-family zoning was founded on the foundation of racial exclusion. 

My perspective on zoning, on housing issues, has evolved over the years, because the crisis in Berkeley and in California has worsened significantly in the past five years. We have increasing numbers of people who are experiencing homelessness, tent encampments on our streets, working families who can’t afford to live in the community they work in, students who can’t afford to live in the community they go to school in. The status quo is not working, and we need to take bold action. 

I think developers are eager to see leadership on the part of government. We need to meet them at the middle and we have to do what we can to make it easier for them to build. At the same time, we have to make sure that they are providing community benefits while we are seeing market-rate construction, particularly in communities where we’ve seen significant amounts of displacement and gentrification. We have historically Black neighborhoods where we’re seeing homes sell at $2 million. Our Black population has declined from 20 percent in 1970 to seven percent now. I think that is a direct result of the decisions that government made to not build housing, and of the astronomical cost of housing in Berkeley. 

AF: Let’s talk about gentrification and real estate speculation, a problem in many cities. Los Angeles recently started a program of land banking parcels near transit stations. Is that the kind of thing that is going to be necessary when you’re obviously in white-hot market conditions here? 

JA: I think so, and we are prioritizing public land for affordable housing. We’ve converted parking lots to affordable housing projects. We have one being constructed right up the street, 140 units of affordable housing and permanent supportive housing—the largest project we’ve ever built for housing the homeless. We need to prioritize public land for public good. There’s no question about that. 

I do agree we need to look at land banking. We need to provide money so nonprofit developers can buy parcels to keep them permanently affordable. We need to look at how we can support land trusts, not just buying properties but buying buildings to keep them permanently affordable. That is part of Berkeley’s housing strategy. It’s not just building new construction, but also the preservation of existing naturally occurring affordable housing. I think we need to focus on the three P’s, and I say this often: production of new housing, preservation of existing naturally occurring affordable housing, and protection of existing residents from displacement. 

AF: How might a vacancy tax, similar to what we see in San Francisco and Oakland, address this issue of the burgeoning value of land? 

JA: We actually recently placed on the ballot a residential vacancy tax, which is a little bit different from Oakland’s; it doesn’t focus on vacant parcels, but it’s focused on vacant homes and vacant residential units. There are some who have said, “Well, we have thousands of vacant units, and therefore, we don’t need to build more housing.” That’s absurd. We need to build housing, and we also need to put housing that is off the market back on the market. 

The more that we can address actions by speculators and by scofflaws—I would characterize people who keep properties blighted and vacant for many years as scofflaws—it will address the artificial constraining of the market and will put more units back on the market. We spent a lot of time crafting this vacancy tax and really thought through the situations in which units could be vacant legitimately. The focus is not on small property owners but on owners of large rental properties, because part of what we are seeing is, frankly, speculation of the market. 

We hope, at some point, we don’t have to charge a tax because all the housing is being rented or is being used. That’s the goal of the vacancy tax, not to penalize but to incentivize owners of multifamily properties to use the properties for their intended purpose. I just have to say once again that this is not a panacea, this is not the solution to the housing crisis, and that we need to build new housing. What we have is a crisis that is decades in the making through deliberate actions on the part of government, through racial segregation or redlining, through fierce resistance to building housing, and through policies that have constrained the production of housing. 

AF: As a hub of innovation, Berkeley has a thriving economy. Do you believe it’s going to be possible for more workers in Berkeley to be able to live in Berkeley, or is there a built-in imbalance that you just have to manage and come to terms with? 

JA: I think it’s possible . . . but that’s going to require that we build thousands and thousands of units of housing, that we prioritize building housing around our transit stations, that we look at upzoning low-density commercial neighborhoods, that we look at building multifamily housing in residential neighborhoods. Every part of our city needs to meet its responsibility to create more housing. No part of our community can be walled off to new people living here. 

I really do think that that gets to the core of who we are, who we say we are as a city. Are we a city of equity and inclusivity? If we are, then we need to welcome new people living in our community. We create those opportunities for people to live here. People who previously lived here and were displaced, people who work here but can’t afford to live here, and obviously, there’s a climate benefit we can give people to not have to drive an hour, two hours to get to Berkeley. 

That reduces those cars on the road, reduces greenhouse gas emissions, and helps us mitigate the impacts of climate change, and building dense, transit-oriented development is a critical part of taking bold climate action. Our land use policies and our actions to encourage more dense housing are really critical climate action strategies. 

AF: Could you talk about the importance of bicycle and pedestrian safety in your view of how the city functions and how Berkeley is doing in that regard? 

JA: Because we have such high numbers of people who bike to work and walk and use alternative modes of transportation, we need to make it safer and easier for people to get around town. Sadly, we’ve seen an increasing number of collisions between cars and bicyclists, and pedestrians. Like many communities, we’ve adopted a vision zero policy that’s focused on reducing traffic injuries and fatalities. We are looking at how we can redesign and reconstruct our streets to make them safer for people who walk and bike. . . . Then, obviously, being the home of the University of California, we have a lot of young people who are constantly walking, biking around, and we need to make it safer for students and for our residents to get out of their cars and to choose non–carbon intensive modes of mobility. 

AF: On climate, what else can Berkeley do? How is this region addressing the climate crisis? 

JA: I think the best way for Berkeley to address the climate crisis is through recognizing, one, it’s not a crisis, it’s an emergency—and we see the real material effects of it here in California. We’ve had some of the most devastating wildfires in California history over the last five years, [and] Berkeley is not immune to the threat of wildfire. That’s a pretty telltale sign that the climate emergency is here, it’s not going away, and we have to recognize that we need to take bold action. 

I’m proud that Berkeley has really been a leader in combating climate change. We were one of the first cities to adopt a climate action plan. Obviously, building dense infill housing is a critical part of that. We do need to promote more electric mobility, whether it’s through micro-mobility or through converting heavy-duty and light-duty vehicles to electric, and California’s really been a leader at that. While there are very ambitious targets that the state has set to transition our vehicle fleet to electric, we don’t have the infrastructure to support that yet. We hope with the new federal bipartisan infrastructure law and the climate law that was just passed that there’ll be significantly more resources available that we can leverage to expand that infrastructure in California. 

Electrifying our buildings is important too, and Berkeley was the first city in California to adopt the ban on natural gas and require that newly constructed buildings be all electric. We’re also looking at how we can get existing buildings to be electric, which is much tougher. . . . All those things are important, but we also have to adapt to climate change . . . whether it’s how we address wildfire risk or sea-level rise. Berkeley’s along the San Francisco Bay. We know that parts of our city, unless we do something, are going to see significant flooding and inundation. 

That’s where I think the regional approach comes in. These [issues] can’t be solved by one city. A lot of work’s been done at the Metropolitan Transportation Commission and Association of Bay Area Governments—our regional planning agency and council of governments—to bring government agencies together to explore strategies. I think that’s an area where regionalism and regional government’s going to make a difference. 

Anthony Flint is a senior fellow at the Lincoln Institute of Land Policy, contributing editor to Land Lines, and host of the Land Matters podcast. 

Berkeley, California, might be described as a victim of its own success—a roaring innovation economy, a college town, and a hugely popular place to live, minutes from Oakland and San Francisco, but plagued by a staggering lack of affordability, rampant real estate speculation, and homelessness. 
 
When it comes to new housing development, much of the narrative in recent years has been framed in terms of two camps: those who oppose neighborhood infill development, labeled as proclaiming “not in my backyard,” and advocates of dramatically increased supply of different kinds of housing, under the banner of YIMBY—“yes in my backyard.” 
 
In an interview for the Land Matters podcast, Mayor Jesse Arreguín makes it clear he believes the more housing, the better. 

“We need to build new housing,” he said, in a recent interview at Berkeley City Hall. “What we have is a crisis that is decades in the making through deliberate actions on the part of government, through racial segregation or redlining, through fierce resistance to building housing, and through policies that have constrained the production of housing, and now we’re in a crisis. I think a crisis and emergency requires that we take emergency action. That’s why we are embracing building more housing—and we will continue to build lots more housing, because we think that is the solution to addressing our housing crisis.” 
 
Arreguín was elected mayor in 2016, becoming the first Latino to hold the office and, at 32, the youngest mayor in a century. He was reelected with over 65 percent of the vote in 2020. The son and grandson of farmworkers, Arreguín grew up in San Francisco. At nine, he helped lead efforts to name a city street after activist Cesar Chavez, beginning a lifelong commitment to social justice. 
 
After he graduated from the University of California, Berkeley, he stayed in the city, serving on numerous boards overseeing planning and zoning, and ultimately the city council. He is also now president of the Association of Bay Area Governments, which is the Bay Area’s Council of Governments and regional planning agency. 

Arreguín came into office mindful of the concerns of established residents who expressed skepticism about allowing additional height and density, but says the situation is so dire, creative solutions are in order—in keeping with the area’s reputation for innovation in the private sector. 
 
“We are looking at innovation, not just in terms of scientific research, but from a government perspective, innovation in creating public policy,” he said. “I see Berkeley as an innovation lab, a test lab for new approaches to public policy, which is why we’re really thinking intentionally about how we can create solutions to housing and homelessness, and a lot of the other challenges facing cities in 2022.” 

An edited version of the interview is available online at Land Lines magazine, as the latest installment of the Mayor’s Desk feature. 

You can listen to the show and subscribe to Land Matters on Apple Podcasts, Google Podcasts, Spotify, Stitcher, or wherever you listen to podcasts. 

Further Reading 
 
From Downtown to Single-Family Blocks, Berkeley Eyes Big Zoning Changes (Berkeleyside) 

Through the Roof: What Communities Can Do About the High Cost of Rental Housing in America (Land Lines) 

Backyard Brouhaha: Could Inclusionary Housing Break the YIMBY Deadlock? (Land Lines) 

Anthony Flint is a senior fellow at the Lincoln Institute of Land Policy, host of the Land Matters podcast, and a contributing editor of Land Lines. 

As cities and towns seek funding for transportation, parks, affordable housing, and other public goods, they often overlook one of their most valuable assets—land. A new Policy Focus Report from the Lincoln Institute of Land Policy shows how local governments make land more valuable by building infrastructure and facilitating urban development, and how they can ensure that the community reaps the benefits. 

Land value capture enables communities to recover and reinvest the land value increase that results from actions such as building new train stations or changing regulations to enable more dense development. In Land Value Capture in the United States: Funding Infrastructure and Local Government Services, author Gerald Korngold explains how the major land value capture tools work, and recommends a path forward for leaders who want to implement them. 

The Trustee Professor of Law at New York Law School, Korngold also lays out the legal precedents for different types of land value capture and recommends ways policy makers can minimize legal risks. 

“Land value capture has in various forms been used and legally upheld in the United States for some 150 years,” he writes. “It remains a valid and viable option to finance government activities, provided policy makers leverage available tools appropriately.”  

Korngold provides an in-depth analysis of seven land value capture tools—exactions, impact fees, linkage fees, special assessments, mandatory inclusionary housing, incentive zoning, and transferable development rights. He uses case studies from around the country to explain how land value capture can contribute to public policy goals such as equity and sustainability. 

For example, in the Northern Virginia suburbs of Washington, DC, commercial property owners agreed to tax themselves more than $700 million to fund a 23-mile extension of the Metrorail system to Dulles International Airport, roughly an eighth of the total cost of the project. The first section of the new line opened in 2014, and the rest is scheduled to open later this year. 

In downtown Chicago, the city grants developers permission to construct larger buildings in exchange for voluntary fees, which are calculated based on the size of each project. The city directs 80 percent of the revenue to commercial development in underserved neighborhoods, 10 percent to public improvements near each downtown project, and 10 percent to the restoration of landmarks. 

Such policies are possible because transportation infrastructure and zoning for greater density have both been shown to increase the value of land, either by providing access to jobs and amenities, or increasing the profitability of a development, as Korngold documents in the report.  

“Without land value capture, this increased land value remains exclusively in private hands despite the public actions that created it,” Korngold writes. 

 The report is intended for state and local policy makers, urban planners, economic development officials, civic leaders, lawyers, advocates, and other stakeholders. 

“Gerald Korngold provides an all-too-rare pragmatic overview of land value capture, a topic that stokes great passion from theorists and practitioners alike,” said Ian Carlton, senior economic advisor for ECONorthwest, a consulting firm that specializes in economics, finance, and planning. “He clearly explains many of the value capture options that one could implement in the U.S. context.” 

The report is available for download at no cost: https://www.lincolninst.edu/publications/policy-focus-reports/land-value-capture-in-united-states 

Will Jason is the director of communications at the Lincoln Institute of Land Policy. 

Image: The Dulles Airport Metrorail extension continues to raise funding from special assessments as the project moves through its second phase. Credit: Tom Saunders, VDOT/Flickr/CC BY-NC-ND 2.0 

A coalition of 21 leading national affordable housing groups is acknowledging improvements to Fannie Mae and Freddie Mac’s Duty to Serve (DTS) Underserved Market Plans for 2022-2024 but calling on the government-sponsored enterprises to go further to reach underserved housing markets. 

The Underserved Mortgage Markets Coalition (UMMC) released a scorecard to evaluate the enterprises’ newest Duty to Serve plans, which were produced April 27. The Scorecard for the Approved DTS Plans 2022-2024 evaluates the enterprises’ commitment to innovating and developing effective solutions to meet their responsibilities under Duty to Serve, a federal regulation that requires the enterprises to prioritize and improve affordable housing finance opportunities in three historically neglected markets: manufactured housing, affordable housing preservation, and rural housing. 

The scorecard recognizes significant improvement in the latest plans compared with the versions released a year earlier. However, the scorecard finds that Fannie Mae and Freddie Mac failed to fully implement a majority of the improvements recommended in the Blueprint for Impactful Duty to Serve Plans, which the UMMC released January 20. 

For example, neither Fannie Mae nor Freddie Mac substantially increased its commitment to help manufactured housing homeowners obtain traditional mortgages, and neither adopted the recommendation to target 10 percent of their loan purchase to low- and moderate-income families in areas with high energy cost burdens. 
 
The UMMC recommends that Fannie Mae and Freddie Mac carefully consider the scorecard in determining how to improve their Duty to Serve plans, and that the Federal Housing Finance Agency (FHFA) take the scorecard into account in evaluating the enterprises’ performance. Consistent with UMMC’s intention of working collaboratively with Fannie Mae and Freddie Mac, the coalition hopes that both companies will work collaboratively to amend their DTS plans so that the UMMC can issue an updated DTS scorecard with higher scores. 

 
Founded in October of 2021, the UMMC consists of 21 leading U.S. affordable housing organizations seeking to hold Fannie Mae and Freddie Mac accountable to their founding purpose: to bring housing finance opportunities to American families not traditionally served by the private market. The UMMC identified numerous flaws in the enterprises’ previous Duty to Serve plans, released in May of 2021, and supported FHFA’s decision in January of 2022 to reject those plans. It is now working with the enterprises and other stakeholders to use the power of the federal government to improve housing affordability and boost homeownership. 

Image: Balconies of a modern apartment. Credit: ImageGap via Getty Images.

Small and midsize legacy cities, once written off as relics of an industrial past, are important actors as climate change plays out in the United States. As much as one-third of the U.S. population lives in these metro areas, which are home to fertile farmland, abundant fresh water, productive capacity and culture, and comparatively cool weather. As climate change accelerates, these resources will attract people displaced from other parts of the country and the world. 

To succeed as “climate havens,” legacy cities must protect their assets, which also include relatively affordable housing, historic downtowns, and often overbuilt infrastructure, while simultaneously developing strategies to foster climate resilience, environmental justice, and green economic development. However, these cities face a serious threat that could undermine such efforts: large-scale speculative real estate investment that could put housing out of reach for all but the most affluent.  

Corporate and institutional investors expanded their role in the housing market more than a decade ago, picking up foreclosed and distressed properties across the country at rock-bottom prices during the Great Recession, then renting or reselling them after the recovery. Today they are consolidating even more property and power, a trend marked by rising real estate ownership by limited liability corporations (LLCs), the increasing sophistication of algorithmic tools for amassing different types of property in aggregate, and increased reliance on driving up rents, rather than house-flipping, to extract profits. Leaders in legacy cities, preoccupied with dramatic population loss for decades and enthusiastically welcoming investment now, could be caught unprepared to handle a land grab that benefits only the wealthy, displacing most everyone else—particularly Black and brown residents. 

According to the Department of Housing and Urban Development’s Rental Housing Finance Survey data, individual ownership of rental property fell from 92 percent in 1991 to 72 percent in 2017, with evidence suggesting that it has dropped further since. LLCs, which states authorized in large numbers beginning in the 1990s, account for much of this shift. They are a particularly common ownership structure for apartment dwellings of five or more units and, more recently, for single-family housing and mobile-home parks. These impersonal “equity-mining” operations convert owner-occupied housing to rentals, price out current renters with higher rents through devices such as block purchasing in targeted neighborhoods, and keep first-time homeowners off the market by reducing the available housing stock—all with virtually no accountability due to limited liability protections.  

Most of this activity has taken place in growing metropolitan areas, mainly across the South and on the coasts, but legacy cities are emerging targets. Detroit, which has slowed gutting population loss in recent years, was among the 10 U.S. metropolitan areas where private equity accounted for the highest share of purchased homes in 2021. With 19 percent of its home sales made to investors, Detroit found itself in the company of fast-growing cities including Phoenix, Las Vegas, Miami, and Atlanta.  

The predominantly Black east side of Cleveland, and the city’s eastern first-ring suburbs, have also been hit hard. Between 2004 and 2020, the proportion of housing purchases made by private equity in Cuyahoga County rose from 7.2 percent to 21.1 percent; on the east side, investor purchases stood at a staggering 46 percent by 2020. Since 2016, Springfield, Massachusetts, with a poverty rate of about 25 percent, has experienced 1,200 single-family private equity home purchases, more than any other city in the state; that figure doesn’t even include purchases of foreclosed properties. 

A number of conditions account for this housing market speculation. According to ProPublica reporting, private equity firms have record levels of unallocated capital available for real estate. Investors are also betting on a rising rental market as population outpaces housing supply. The pandemic has played a role too, leaving struggling individual landlords and owner-occupant sellers vulnerable to cash-paying private equity investors. Most housing in smaller legacy cities is single-family, which is currently targeted by private equity. And in a time-honored land-use dynamic, urban “improvements”—such as Springfield’s downtown MGM casino complex and potential East-West rail connection to Boston—tend to attract additional investment.  

Countering this speculative, wealth-extracting land grab—a damaging trend that climate change will only exacerbate, as investors eye properties expected to remain viable amid calamitous changes elsewhere—is critical to the long-term economic health of smaller legacy cities. They should consider taking or supporting steps including the following: 

• requiring greater transparency in LLC ownership, partnerships, and practices, as legislation recently filed in New York State aims to do
• ensuring that municipal housing codes require access to a local agent in charge, along with “owner” information, and provide for and/or more readily apply both criminal and civil penalties for code violations
• encouraging full implementation of the 2020 Corporate Transparency Act, which Congress passed to make ownership information reported to the U.S. Treasury Department’s Financial Crimes Enforcement Network public, so that neglectful corporate landlords can be more easily tracked and held accountable. 

Policy makers also need to remedy the structural forces that have gotten us here by increasing housing supply to meet demand, particularly at the lower end of the market; planning to preserve affordability and prevent displacement of vulnerable residents; and linking housing to community wealth-building through tools like community land trusts.  

Although much uncertainty clouds our climate future, we know many millions of people will be displaced, and the assets of smaller legacy cities will make them appealing destinations. Such cities must plan for that future now by safeguarding their land and people from the private equity invasion. 

Catherine Tumber, author of Small, Gritty, and Green: The Promise of America’s Smaller Industrial Cities in a Low-Carbon World (MIT Press, 2012) is coauthor of a forthcoming Policy Focus Report from the Lincoln Institute on greening small and midsize legacy cities in the United States. To learn more about her work, visit catherinetumber.com. 

Image: In Springfield, Massachusetts, and other U.S. legacy cities, institutional investors are muscling in on the real estate market. Credit: halbergman via iStock/Getty Images Plus.