In Short:

The single most impactful action HUD could take to expand supply would be to allow states to preempt local density restrictions for projects funded by the HOME and the Housing Trust Fund (HTF) programs.

Abstract

To date, federal policies designed to boost housing supply have focused on providing state and local governments with incentives to build more housing. These incentives include giving state and local governments preferential treatment when they apply for competitive grants, and directly providing them with grants for the purpose of addressing certain barriers to development. While these “carrots” are well-intentioned and helpful, incentives do not do enough to expand housing supply in the areas that need it most.

We present another, more muscular option: HUD should revise its HOME Investment Partnerships (HOME) and National Housing Trust Fund (HTF) program regulations to let states opt in to federal preemption of state and local land use restrictions on housing density that would otherwise apply to affordable housing that these programs fund. This proposal represents the single biggest action HUD could take on its own to increase housing supply, enabling the HOME and HTF programs to create much more housing than they do now, opening the possibility to substantially address the U.S. housing affordability crisis.

About the author

Alex Mechanick

Assistant professor, school of government and policy

Alex Mechanick researches problems that sit at the intersection of economics, law, and public policy.