An article in Housing Policy Debate, “State Affordable Housing Appeals Systems and Access to Opportunity: Evidence from the Northeastern United States,” finds evidence that legal systems that allow developers to request overrides of local land-use regulations can increase access to opportunity. The authors find that in several northeastern states with state affordable housing appeals systems (SAHASs), middle- to upper-income and low-poverty neighborhoods are more likely to accommodate below-market rate (BMR) housing units, compared to states without such a system. They also found evidence that Massachusetts’s system may be particularly effective at facilitating BMR production.
State affordable housing appeals systems respond to concerns that local land-use regulations can constrain housing supply, increase housing cost burdens for low-income households, and restrict access to high-opportunity neighborhoods. In states with a SAHAS (including Massachusetts, New Jersey, Connecticut, and Rhode Island), developers of BMR housing projects can challenge local land-use regulations and jurisidictions’ development decisions when municipalities have not met a state-determined fair-share housing standard. The SAHAS may exempt developers from certain local zoning requirements or allow them to receive an expedited approval process. Generally, the SAHAS places the burden of proof on municipalities to show that their land-use regulations are reasonable, and developers who win their appeals are generally entitled to a building permit. How much BMR housing this system facilitates depends in part on the fair-share standards imposed on municipalities.
The authors analyze data on deed-restricted BMR units in metropolitan areas in Massachusetts, Rhode Island, Connecticut, and New Jersey (which all have SAHASs), as well as New York (which does not have a SAHAS). Looking first at the deed-restricted housing stock in the metro areas of states with a SAHAS, the authors found that upper middle-income and upper income Massachusetts municipalities have a higher proportion of BMR units (4.8%) than counterparts in New Jersey (3.0%), Connecticut (3.3%), or Rhode Island (4.3%).
They also compared the spatial pattern of Low Income Housing Tax Credit (LIHTC) development and preservation in these states and in New York, to see whether states with a SAHAS facilitated more LIHTC projects in low-poverty and middle- to upper-income neighborhoods. While they found no difference between New Jersey and New York, they did find that middle- to upper-income neighborhoods in Massachusetts, Connecticut, and Rhode Island were more likely to have LIHTC development, rehabilitation, or preservation. The average sampled neighborhood in Massachusetts was 2.5 times more likely to have a LIHTC development than neighborhoods in New York, and neighborhoods in Rhode Island were 4.5 to 5.5 times more likely to have LIHTC projects.
The authors analyzed whether the presence of a SAHAS was associated with housing cost burdens. They hypothesized that an effective SAHAS would reduce the proportion of low-income renter households that were cost-burdened by introducing more below-market rate housing. The proportion of low-income renters without a rent cost burden was two to three times higher in Massachusetts than in New York. The proportions of low-income renters without a cost burden were higher in middle- and upper middle-income Rhode Island neighborhoods than in comparable New York neighborhoods. The differences between Connecticut and New York were smaller, and there was no significant difference between New York and New Jersey for most neighborhoods.
The authors infer that the Massachusetts SAHAS is associated with improved BMR housing outcomes relative to Connecticut, New Jersey, and New York State. They identify five features of the Massachusetts system that may be important. First, in Massachusetts developers can request a comprehensive permit that consolidates all local approvals. Second, the Massachusetts fair-share standard is simple and consistent across the state. Third, Massachusetts rewards municipalities that ensure BMR housing is actually built. Fourth, mixed-income requirements in Massachusetts are not as demanding as in other states. Fifth, in Massachusetts an administrative board reviews comprehensive permit decisions, which may be faster than the judicial-review system used in other states.
The full paper can be read at: https://bit.ly/3dqcYSu