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Bid en’s Infrastructure Bill: Change Zoning to Diversify Neighborhoods

Penny Starr 6-7 minutes

The focus of President Joe Bid en’s $2.3 trillion infrastructure bill is allegedly to address aging infrastructure across the country, but the massive bill covers a vast amount of other spending, including money for “diversifying” neighborhoods.

This portion of Bid en’s American Jobs Plan would change zoning laws to end single family home neighborhoods and allow for multiple unit “affordable” or low-income rental housing.

According to the White House Fact Sheet, the housing effort is “an innovative new approach to eliminate state and local exclusionary zoning laws, which drive up the cost of construction and keep families from moving to neighborhoods with more opportunities for them and their kids”:

“For decades, exclusionary zoning laws — like minimum lot sizes, mandatory parking requirements, and prohibitions on multifamily housing — have inflated housing and construction costs and locked families out of areas with more opportunities,” the fact sheet states. “President Bid en is calling on Congress to enact an innovative, new competitive grant program that awards flexible and attractive funding to jurisdictions that take concrete steps to eliminate such needless barriers to producing affordable housing.”

In contrast to former President Donald Trum p’s Housing and Urban Development’s (HUD) Opportunity Zones program that partnered the federal government with private sector investors to create less rental housing and increase home ownership, Bid en’s plan uses tax breaks for state and local governments, the Fact Sheet states:

“[Biden] is calling on Congress to pass the innovative, bipartisan Neighborhood Homes Investment Act (NHIA). Offering $20 billion worth of NHIA tax credits over the next five years will result in approximately 500,000 homes built or rehabilitated, creating a pathway for more families to buy a home and start building wealth.”

Reuters reported on the shift from free markets to government control:

President Joe Bid en is seeking to ease a national affordable housing shortage by pushing local governments to allow apartment buildings in neighborhoods that are currently restricted to single-family homes.

The $5 billion plan could inject the White House into a debate pitting older homeowners against younger workers seeking to gain a foothold in the most expensive U.S. cities, where many families spend a third or more of their income on housing.

The proposal, which would provide financial incentives to local governments that change zoning laws restricting many neighborhoods to single-family homes, is an example of the sort of broad social policy changes Dem ocrats are including in Biden’s $2 trillion infrastructure bill.

Bid en’s plan even designates which workers will benefit from this housing project — “put union building trade workers to work upgrading homes and businesses to save families money,” the Fact Sheet states.

The New York Times published an Ezra Klein Show interview with Brian Deese, Bid en’s director of the National Economic Council, “the nerve center that coordinates economic policy across the executive branch.”

“I’m interested in this idea of using money to either reward or even to change local capacity and even laws on the ground sometimes by running the competitions,” Klein said. “In the housing section of the bill, you want to build a ton of new housing, but it’s also connected, at least in some cases, to getting cities to change their zoning laws, such that it is easier to build that housing.”

“That’s a pretty interesting policy,” Klein said. “Tell me about how that might work in practice.”

“Yeah,” Deese answered. “And just to be clear, this is not a federal pre-emption of local zoning laws or anything. In fact, these are ideas that build off ideas that, again, Republi cans and Demo crats have at least put forward congressionally over the course of the last couple of years.”

“The idea is, basically, we need to build more housing in the U.S. in the right places. And if we can do that, it has an important economic multiplier, because it allows people to move to opportunity and move to jobs that are potentially ladders into higher-paying careers in areas where those jobs exist,” Deese said. “Part of the opportunity in doing that is to have more enlightened zoning policies at the local level. But using investment can help sometimes get over the chicken-and-the-egg problem: Changing zoning policies to allow for development is harder to do if you don’t have some investment or some match to help fund the construction of that housing.”

“So the idea is relatively basic, which is to hold out that carrot but then put those resources in the areas where there’s going to be the biggest bang,” Deese said. “And in some cases, that’s going to be because you’ve gotten a change in zoning that would unlock more opportunity to build housing in the right places.”

Forbes magazine reported on Bid en’s plan, which includes impacting neighborhoods that want to retain single family housing, which critics call NIMBY — Not in My Backyard — homeowners.

“Any proposal that works to reduce restrictive zoning and provides municipalities incentives to embrace affordable housing is a positive,” Dudley Benoit, executive vice president of Alliant Capital, an affordable housing-focused tax credit syndication firm, said in the Forbes report. “NIMBYism and restrictive zoning drive up the cost of affordable housing by limiting where affordable housing can be built.”

“This also leads to excluding low-income renters from communities that may have better resources [like schools],” Benoit says. “It remains to be seen if locales that have fought for decades to prevent affordable housing can be incentivized to change their ways, but it is worth a try and could have a substantial impact if successful.”

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I'm not someone who would, for instance, ever buy in a restrictive covenants HOA neighborhood. And I chomp at the bit when I see the setbacks, zoning restrictions and NIMBY rules and regs set for housing...we have some terrible stuff here and it has resulted in a HUGE lack of housing overall, not just affordable housing!

It's all part of the schedule of uses. What's allowed on the Schedule of Uses is dictated by the type of zoning.

Zoning also dictates parking requirements, how close you can build x to a property line (whether street, side, or rear), and how many parking spaces you need per whatever.

So, if I want a flower shop in a certain nearby city--- I'd better have 50 feet of yard between me and the street if I'm in "neighborhood services" zoning. But if I'm a florist in "Local Retail" zoning, it's only 25 feet. And if I'm selling flowers in "commercial" zoning, I don't need a yard at all. And in R-1 zoning, I can have a farm/truck garden/orchard/nursery, no problem, as long as I maintain a sales office (either retail or wholesale) elsewehere.

I had a guy in my town who did home decorating and baking. He had an adorable little house... right in R-1 zoning. He might have gotten away with it if he also hadn't hung up his shingle to advertise... but he did. He ended up selling his house and going back to making cakes at the upscale grocery store's baking department in a nearby city.

NE, here a 24-bedroom 28-bath home qualifies as a single family home. 9+ bedrooms are easy to find. And you know who occupies them? Weekly renters, many of whom are "wild and crazy" entitled vacationers with no sense of decorum. But they are legally SFH - but they are legally occupied by MANY families at once with a changeover every Saturday. You never know who your neighbor is.

BUT you are not allowed to take one of those home and turn it in to, say, a rooming house. Because those people might be actual workers living paycheck to paycheck.

Many of the houses sit empty all winter, while locals struggle to find a place to live.

I'm thinking that one of the problems here is the entitlement mentality of certain people who think/believe that just because they want to live somewhere, that there should be places for them at prices they want to pay (zero $).When I lived in Santa Barbara there were PLENTY of these types who wanted to live in beachfront homes or apartments for almost nothing. They would whine and moan that they "deserved" cheap housing and that housing where they wanted it and at a price they wanted to pay (zero$) was a human right and we HAD to provide it to them. We explained that we live in modern times and all the prime places were taken long ago. They either need to go back in time several hundred years or work and earn enough to buy in this time and place. But was that acceptable to them? Of course not! So they still demand a multi million dollar place for basically free.

This country has PLENTY of places where there are cheap houses. Thing is, they are not hot, desirable areas with oceanfront or beautiful mountain views. And they are not loaded with handouts and free everything. Those who do live in places like this actually expect people to work and support themselves.

In some ways I get it, and in other ways I don't.

There does need to be a minimum lot size, and minimum parking requirements in many way. OTOH, I'm dealing with needing to get a variance for some construction I'm planning in a couple more years.

Property was zoned R-3 decades ago, and rezoned R-2 about 12 years ago (after an individual campaigned for it). The surrounding blocks are all zoned R-3. The issue is the minimum street frontage and lot size.

At some point more recently, I'm not sure when, the city changed the minimum lot sizes to be 60 ft of street frontage for a SFH, and 75 foot for duplex or larger. They also decided that a duplex needed to sit on a lot of a minimum size of 9,000 sq ft, and R3 needed to be 7500 +1500 per unit over 2. We can cover up to 40% of the lot with structure/roof.

I have 6 lots in a row that are each 50 ft linearly along the street, already zoned R2, 6000 sq ft. I want to cover each lot with a duplex that fits within the 2,400 max footprint.

NE said “I would imagine high end neighborhoods (is that still legal to say) would skyrocket in price to make apartment housing cost prohibitive.”

Ne. This may be true most places. However, my understanding is the gov came and spent $275,000 renovating buildings into apartments they rent out for like $300 per month. This $275,000 is for EACH apartment, not the total building. It was not a high end neighborhood.

How long would it take to get your (the tax payers)money back on these apartments.

Here we are in such need of normal housing - just plain ol' houses for plain ol' people. But the huge McMansions go up instead, tourist housing. That's fine. But now we don't have ANYWHERE to house the workers needed to support the tourist industry. It's not just a problem, it's a literal crisis.

And due to the way this place is shaped and accessed, there are only two roads in or out: one north at the top, one south at the bottom. No way to make use of the mainland across the Sound - you have to drive up and around and down again to wave across the water at where you just were...hours of driving on one road if you move over there. And because no one does, not much rental housing over there either.

I remember back when I lived in DFW, everyone was making fun of Arlington, because they were happy to run buses on days when there were Cowboys/Rangers games, to shuttle people from restaurants to the stadium and help ease congestion and parking, but Arlington refused to consider running a metro bus system for, like, ordinary people.

Checking in 15 years later... they're up to about 400k population, and still have no public transportation. ;)

If everyone remembers their history, in (presumably most jurisdictions) you can't rent out 24/28's by the room to permanent lodgers in R-1 because traditionally--- unless you had a widow trying to make ends meet--- it wasn't the best houses in the best neighborhoods being carved up into rooming houses. In Texas, if I wanted to rent out rooms to the elderly in an assisted living facility, Health & Human Services sez you can't have a room in an smaller than 8x10. Not only do they specify 80 sf per resident, but they had to also specify that the smallest dimension in said room couldn't be less than 8'. (Technically, there are Type A ALFs with 80 sf, Type B ALFs with 100 sf, 60 sf per person in a shared Type A room, 80 sf per person in a Type B shared room, and so on...) But the point is, they had to specify the square footage because otherwise, Biz would stack the elderly like cordwood, and then they had to specify the dimensions, because otherwise, Biz would cram people into long, skinny, dark closets.

But the point is, time after time after time, people come in and say, "You shouldn't have to live like this---" and then make it so they can't live like that. Between eliminating almost a million rooms' worth of SRO's since the mid-50's, and the expectation that "everyone" deserves to run their own independent household (even if "everyone" does not have the budget for water, electric, gas, rent, car, yard, and so on)--- it doesn't take a rocket scientist to see that people's reality suffers from the social experimentation, no matter how well-intentioned.

NE brings up what I was alluding to. There is no problem with affordable housing in our country. There is a problem with people who refuse to move from areas where housing is very expensive to areas where it is much cheaper. We see this problem created by the following:

1) Section 8 voucher that prop up housing people in units they cannot afford. Thus, the price of housing stays higher. If they moved, there would be less demand, and market forces would naturally drop the price to where low income earners could once again start to come back. Market forces would resolve this if allowed, but that wouldn't create any victims for politicians to "save" thus robbing them of votes. This is how you legally buy votes today: create victims then promise to fix their lives.

At least back in the old days corrupt politicians bought votes with their OWN money or union money: today they use the US Treasury!

2) There's an "I get to live wherever I want in this country regardless of cost" mentality. No, that is not correct. You get to live where you can afford to live.

When I was a college student, I lived in a 2 car garage made of masonry brick that was converted into an apartment. The wall furnace was so loud we nicknamed it "The Dragon" because it roared and spit flame. AC was optional, if I provided my own window unit, which I didn't for awhile. Just bought a fan. The folks next door were drug addicts who tried to break in once and bloodied themselves up punching thru the glass storm door. Ah, the good ol' days!

Rent was $150 a month in 1998. Actually, it was $300, but I got a discount because I mowed the yard and cleaned up the student center each week at the property that this unit sat on. I certainly didn't expect the tax payers to pick up the tab for me to have a SFH with a yard.

I lived within my means. There is still housing for people today who will do this. For people who demand to live in expensive cities or coastal areas where other people who have money also want to live, why yes...there is a shortage.

So let me boil this down. B wants to take my tax dollars and use them to bribe City government to do what the Fed's wants rather than what the local population wants.

Congress and Sleepy Uncle Joe have created this problem, running decades now.

We wouldn't need multi-trillion dollar programs being thrown about constantly "in hopes" that something might help.

[[[[[.......put union building trade workers to work upgrading homes and businesses to save families money......]]]]]]]

Wait.

He wants to throw the borders open and allow in citizens of other countries without restriction, but at the same time make it so they can't get any of the construction jobs that they are currently using to support their families?

I own a nice SFH rental in a nice mostly owner-occupied neighborhood. They work together to keep the trash off the street and help each other out. My house happens to be across the street from a motel. All the neighborhood trash (inanimate and otherwise) comes from that motel. So yes, zoning has a lot of value, although I don't have a lot of respect for HOAs.