1 

U.S. Department of Housing and Urban Development (HUD)

Office of Policy Development and Research (PD&R)

Addressing Housing Affordability in High-Cost Metropolitan Areas in the United States

The Senate Report 115-268, Transportation and Housing and Urban Development, and Related 

Agencies Appropriations Bill, 2018, requested that HUD investigate new housing starts in high-cost 

metropolitan areas, the cost burden placed on low-income renters, and the inability of those renters 

to achieve greater economic mobility and financial independence. The committee further directed 

the Department to identify the highest cost metropolitan areas where these conditions persist and to 

recommend potential solutions to help States and their local government entities mitigate affordable 

housing challenges by adopting strategies that expand new housing options in these areas.

The Office of Policy Development and Research (PD&R) prepared this report. In the report, we 

begin by summarizing the nature of the problem with rental affordability. Second, we identify the 

metropolitan areas with the greatest affordability challenges and offer recommendations for what 

these communities can do to alleviate shortages of affordable rental housing. Closing out the report,

we highlight a select number of exemplary approaches that some of these high-cost communities 

have already implemented to address the affordability crisis. These strategies include the following: 

 Streamline the building permitting and environmental review process. 

 Offer technical assistance to local governments to help plan for future affordable 

housing needs. 

 Facilitate the development of additional rental housing through various financing 

tools, such as the creation of local and state housing trusts, shared equity programs, 

and combining tax credits with tax-exempt bonds to incentivize housing production. 

 Use vacant properties or publicly owned land for a portion of new affordable 

housing units. 

 Learn from local experiments on how best to relax parking requirements to provide 

more density for affordable rental units in mixed-income developments. 

 Support continued evidence-based research that builds on existing knowledge of the 

relative impact of regulatory barriers on the cost of housing, especially in high-cost 

local housing markets.
2 

Examining the High Cost of Rental Housing in Metropolitan Areas

In the decade since the global housing and financial crises, we have witnessed progress with 

rising household incomes and growth in credit in the United States.

1 Results from a recent report 

from Harvard University’s Joint Center for Housing Studies,2 however, demonstrate that the 

supply of affordable housing for prospective renters has not kept pace with the increased 

demand, particularly from young professionals, ethnic minorities, and very low-income families.

The Harvard researchers observe that increased construction of market-rate multifamily rental 

units targeted to high-income households has created greater options for them, yet the market 

remains tight for low-income households, and many continue to face housing cost burdens. 

Exhibit 1 draws on HUD’s latest (2017) report to Congress on worst case housing needs. The 

exhibit displays the ratio of rental units affordable at 30 percent of household income per 100 

renters at various income levels. The first column shows that the market failed to provide enough 

affordable units available for very low- or extremely low-income families in most regions of the 

country in 2015. The second column illustrates that higher income renters frequently choose to 

occupy units affordable to lower income households, increasing demand for the more affordable 

units and sharply reducing the ratio of affordable and available units per 100 renters. The last 

column shows that adding a further requirement that units should be physically adequate makes 

the situation even worse. 

Exhibit 1. Number of Rental Units per 100 Renters by Region and Relative Income in 2015

Income Category Affordable

Affordable and 

Available

Affordable, 

Available, and 

Adequate

Northeast 

Extremely low-income renters (0–30% AMI) 71.7 42.8 36.0 

Very low-income renters (31–50% AMI) 92.2 63.2 54.1 

 Low-income renters (51–80% AMI) 126.2 95.0 81.8 

Midwest 

Extremely low-income renters (0–30% AMI) 66.2 39.9 35.2 

Very low-income renters (31–50% AMI) 118.8 77.3 67.6 

 Low-income renters (51–80% AMI) 145.6 109.5 98.3 

South 

Extremely low-income renters (0–30% AMI) 70.8 38.7 34.3 

Very low-income renters (31–50% AMI) 95.4 64.1 55.1 

 

1 The most recent analysis of consumer credit by the Consumer Financial Protection Bureau (October 2018) shows a 

decline in borrower risk, for example, when seasonally adjusted and a significant increase in the volume of loans 

originated between 2017 and 2018 (from an average of $150 billion in 2017 to roughly $200 billion in 2018). Access the 

full report at https://www.consumerfinance.gov/data-research/consumer-credit-trends/mortgages/. 2 America’s Rental Housing 2017, Joint Center for Housing Studies of Harvard University, 

http://www.jchs.harvard.edu/sites/default/files/harvard_jchs_americas_rental_housing_2017_0.pdf. 
3 

Exhibit 1. Number of Rental Units per 100 Renters by Region and Relative Income in 2015

Income Category Affordable

Affordable and 

Available

Affordable, 

Available, and 

Adequate

 Low-income renters (51–80% AMI) 142.2 104.4 92.6 

West 

Extremely low-income renters (0–30% AMI) 53.9 29.9 26.6 

Very low-income renters (31–50% AMI) 64.0 43.7 38.2 

 Low-income renters (51–80% AMI) 119.9 87.6 78.7 

Total 

Extremely low-income renters (0–30% AMI) 66.0 37.7 33.0 

Very low-income renters (31–50% AMI) 92.9 62.0 53.7 

 Low-income renters (51–80% AMI) 135.4 99.9 88.7 

Notes: AMI = Area Median Income. Affordable refers to gross rents of less than 30 percent of stated household income. 

Available refers to units being already occupied by households of the stated income or being vacant and available for rent. 

Adequate refers to units being free of severe deficiencies.

Source: Tabulations of American Housing Survey data by HUD’s Office of Policy Development and Research; exhibits 2-7 

and 2-9 of Worst Case Housing Needs: 2017 Report to Congress (https://www.huduser.gov/portal/publications/Worst-CaseHousing-Needs.html).

For the nation as a whole, there were enough rental units in 2015 to provide affordable housing for 

every renter household between 50 and 80 percent of AMI (affordable and available ratio of 

99.9 units per 100 renters), but only for 62.0 per 100 very low-income renters and 37.7 per 100 

extremely low-income renters.3 Housing supply for the lower income groups is constrained in every 

region, but the challenge of locating available affordable housing options is greatest in the West. 

Similarly, we find that the lack of affordable rental housing options is a reality in high-cost 

metropolitan areas across the country. As requested in the Senate report, exhibit 2 displays the top 

30 metropolitan areas ranked by 2016 median rents. The table also displays the percentage change 

in median rents for these metropolitan areas between 2005 and 2016. 

Exhibit 2. High-Cost Metropolitan Areas, 

Ranked by Monthly Median Rent for 2-Bedroom Units, 2016

Rank Metropolitan Area Rent 2005 Rent 2016

Percent 

Change in 

Median Rent, 

2005–2016

Percent Change 

in Median 

Income, 

2005–2016

1 San Jose-Sunnyvale-Santa Clara, CA 1,208 2,044 69.2 37.7

2 San Francisco-Oakland-Hayward, CA 1,135 1,757 54.8 41.2

3 Oxnard-Thousand Oaks-Ventura, CA 1,181 1,647 39.5 22.4

 

3 Note that this analysis reflects a well-established measurement approach presented in HUD’s biennial Worst Case 

Needs reports to Congress. Also note that median incomes were up 4.0 percent from 2016 to $61,372 in 2017. For a 

fuller picture of income trends, see the U.S. Census Bureau, “Selected Characteristics of Households by Total Money 

Income, Table HINC-01.” Access the report at https://www.census.gov/data/tables/time-series/demo/incomepoverty/cps-hinc/hinc-01.html. 
4 

Exhibit 2. High-Cost Metropolitan Areas, 

Ranked by Monthly Median Rent for 2-Bedroom Units, 2016

Rank Metropolitan Area Rent 2005 Rent 2016

Percent 

Change in 

Median Rent, 

2005–2016

Percent Change 

in Median 

Income, 

2005–2016

4 Urban Honolulu, HI 1,012 1,621 60.2 34.2

5 Santa Cruz-Watsonville, CA 1,202 1,594 32.6 15.3

6 Washington-Arlington-Alexandria, DC-VA-MDWV1,071 1,570 46.6 25.9

7 Santa Maria-Santa Barbara, CA 1,121 1,542 37.6 17.1

8 Santa Rosa, CA 1,080 1,526 41.3 25.1

9 San Diego-Carlsbad, CA 1,072 1,504 40.3 22.7

10 Napa, CA 1,077 1,480 37.4 31.2

11 Vallejo-Fairfield, CA 1,096 1,427 30.2 12.6

12 Bridgeport-Stamford-Norwalk, CT 1,067 1,412 32.3 27.0

13 California-Lexington Park, MD 827 1,409 70.4 33.4

14 Los Angeles-Long Beach-Anaheim, CA 972 1,403 44.3 27.6

15 Boston-Cambridge-Newton, MA-NH 1,024 1,350 31.8 35.0

16 Boulder, CO 945 1,348 42.6 37.5

17 New York-Newark-Jersey City, NY-NJ-PA 947 1,346 42.1 29.6

18 Seattle-Tacoma-Bellevue, WA 811 1,325 63.4 41.0

19 Salinas, CA 1008 1,314 30.4 15.8

20 San Luis Obispo-Paso Robles-Arroyo Grande, CA 1003 1,313 30.9 35.6

21 Barnstable Town, MA 1,037 1,295 24.9 25.8

22 Denver-Aurora-Lakewood, CO 777 1,286 65.5 29.3

23 Fairbanks, AK 789 1,277 61.9 28.7

24 Anchorage, AK 864 1,256 45.4 35.4

25 Kahului-Wailuku-Lahaina, HI 1,011 1,254 24.0 17.4

26 Miami-Fort Lauderdale-West Palm Beach, FL 877 1,249 42.4 21.0

27 Riverside-San Bernardino-Ontario, CA 912 1,235 35.4 16.8

28 Naples-Immokalee-Marco Island, FL 997 1,230 23.4 21.9

29 Baltimore-Columbia-Towson, MD 816 1,226 50.2 32.4

30 Fort Collins, CO 771 1,204 56.2 28.1

Source: Tabulations of American Community Survey data by HUD’s Office of Policy Development and Research

The table shows that more than half of the high-cost metropolitan areas are in the West, with 

California leading the way. In most high-cost metropolitan areas, changes in median household 

income have not kept up with increases in rents. The average metropolitan area on this list 

experienced rent increases 67 percent greater than their income growth during the 2005 to 2016 

period. Such rent inflation is an important cause of increases in the number of very low-income 

renter households with worst case housing needs during the same period. Worst case needs grew 

from 5.99 million households in 2005 to 8.30 million households in 2015—43 percent of the 19.20 

million very low-income renter households in 2015.4

 

4 For the Tribal Communities, there are additional challenges. While most tribes are in rural areas, there are some tribes 

that are located in what are considered high-cost metropolitan areas, such as the Aquinnah in Martha’s Vineyard. For 

those tribes, in addition to the other barriers identified, there are also issues of developing on tribal trust land, which is 

not fee-simple land, and coordinating with jurisdictions to address issues surrounding tribal sovereignty, tribal land 

status, and infrastructure.
5 

Exhibit 3 shows that the challenge posed by the lack of affordable housing is generally greater in 

urban suburbs than in central cities. Nonmetropolitan areas and lower cost regions, however, also 

experience substantial housing affordability problems.

Exhibit 3. Percentage of Very Low-Income Renters with Worst Case Housing Needs

by Region and Metropolitan Location in 2015

Region Central Cities Suburbs, Urban Suburbs, Rural

Nonmetropolitan 

Areas Total

Northeast 39.7 43.0 33.7 29.7 40.0 

Midwest 37.3 42.1 39.5 29.2 37.3 

South 45.9 52.6 30.8 31.1 43.7 

West 50.9 55.4 40.0 36.4 50.4 

Total 44.2 48.8 34.8 31.1 43.2 

Source: Tabulations of American Housing Survey data by HUD’s Office of Policy Development and Research; see Worst 

Case Housing Needs: 2017 Report to Congress (https://www.huduser.gov/portal/publications/Worst-Case-HousingNeeds.html) 

With this overview of the severe challenge posed by the affordable housing gap, especially in highcost metropolitan areas, we turn next to some potential solutions.

Challenges and Potential Solutions at the State and Local Level

The Senate committee asked HUD to recommend approaches to encourage States and their local 

government entities to mitigate affordable housing challenges and to encourage the adoption of 

strategies that expand new housing options in these areas.

Although local and state housing regulations are usually established with good intentions, they 

sometimes serve as barriers to the development and availability of affordable housing without a 

commensurate health or safety benefit. Many of these locally and state-imposed requirements

prolong the completion of new construction and exacerbate the high housing costs that burden 

residents of certain communities. Housing experts have found compelling evidence that strict or 

outdated land use zoning requirements are important drivers of rising housing costs. Regulatory 

barriers, such as restrictive and obsolete local building practices, bureaucratic inertia, exclusionary 

zoning practices, and protracted project reviews significantly raise development costs. These 

requirements either prevent the development of affordable housing in areas with high job growth, 

forcing lower income households to live far from job opportunities, or limit the availability of

affordable market-rate housing in higher cost communities.5

The most recent issue of Evidence Matters,

6 for example, provides an in-depth discussion on the 

 

5 See, for example, John Quigley and Steven Raphael. 2005. “Regulation and the High Cost of Housing in California,” 

American Economic Review 95 (2): 323–8. 6 U.S. Department of Housing and Urban Development (HUD) Office of Policy Development and Research (PD&R).
6 

impact of barriers on housing production. The evidence suggests that land use regulations 

disproportionately affect low- and moderate-income families by limiting the availability of quality 

affordable housing and driving up the costs of the existing supply.

7 As housing economists Gyourko 

and Molloy point out, most researchers agree that the costs of regulations are quantifiable.

8

However, more studies are needed to evaluate the efficiency and public benefits of regulations. 

Reaffirming that point, Reeves and Hilikias confirmed that land use regulations still pose significant 

challenges for low-income families searching for quality neighborhoods with access to good 

schools, job opportunities, and attractive community amenities.9 Even though post-recession 

household incomes have improved as low- and semi-skilled workers take advantage of employment

opportunities, the authors found that in modest- and high-cost housing markets, local governments 

use their zoning powers to price out low-income families, bowing to pressure from upper-middleincome households to preserve or increase home values.

States and local jurisdictions have adopted creative approaches to the affordability challenge. We 

offer examples from selected high-cost metropolitan areas listed in exhibit 2 and exemplary efforts 

at the state level to reduce the barriers to affordable rental housing.

Examples of High-Cost Metropolitan Areas and Strategies for Improving Housing 

Affordability

San Jose-Sunnyvale-Santa Clara, California

Strategy #1—Expedite the Permitting Process. Communities should identify inefficiencies, 

duplicative requirements, and other administrative processes that cause delays in issuing building 

permits. San Jose has established a creative way to streamline its permitting process by allowing 

developers to take advantage of an expedited application process through the Internet, applying 

online for a building permit, scheduling the inspection, and requesting fast-tracking of the review 

period to be completed within a few days. This is especially useful for small projects and those 

requiring minor rehab or structural changes. As the most recent Permit Report demonstrates, new 

multifamily construction starts have increased significantly in the past year: 

https://sjpermits.org/permits/general/reportdata.asp.

San Francisco-Oakland-Hayward, California

Strategy #2—Improved Site Planning and Building Codes for Affordable Microunits. The Bay Area 

has struggled with an affordable housing crisis for decades. The City of San Francisco has allowed

production of “tiny homes,” sometimes referred to as microunits, as an affordable housing option. 

Units may be built to American Disabilities Act (ADA) standards to accommodate persons with 

disabilities. They vary in size from 400 to 600 square feet. The city provides the site for construction 

 

2018. “Regulatory Barriers and Affordable Housing: Problems and Solutions,” Evidence Matters, Spring: 11–15. 7 Ikeda, Sanford, and Emily Washington. 2015. How Land-Use Regulation Undermines Affordable Housing. Arlington, 

VA: Mercatus Center at George Mason University. 8 Gyourko, Joseph, and Raven Molloy. 2015. “Regulation and Housing Supply.” In Handbook of Regional and Urban 

Economics 5B, edited by Gilles Duranton, J. Vernon Henderson, and William C. Strange. Oxford, UK: Elsevier: 1289–

337.

9 Reeves, Richard V., and Dimitrios Hilikias. 2016. “How Land Use Regulations are Zoning Out Low-Income Families,” 

Social Mobility Memos blog, Brookings Institution, August 16. https://www.brookings.edu/blog/social-mobilitymemos/2016/08/16/zoning-as-opportunity-hoarding/. 
7 

and commits to a 10-year master lease, and a private entity builds the housing to the established 

local or state building code, ensuring compliance with health, safety, and resiliency standards. After 

10 years, the municipality has the option to buy the property at a fair market value: https://www.sfplanning.org/ftp/files/legislative_changes/new_code_summaries/120996_Cap_on_Efficiency_Dwel

ling_Units.pdf. 

Washington-Arlington-Alexandria, D.C.-VA-MD-WV

Strategy #3—Incentivize Affordable Rental Housing through Inclusionary Zoning. Inclusionary 

zoning (IZ) is an affordable housing tool that links the production of affordable housing to the 

production of market-rate housing. IZ policies either require or encourage new residential 

developments to make a certain percentage of the housing units affordable to low- or moderateincome residents. In exchange, many IZ programs provide cost offsets to developers, such as 

density bonuses that allow the developer to build more units than conventional zoning typically 

allows or fast-track permitting, which would make it possible for developers to build more quickly.

According to the most recent Inclusionary Zoning Annual Report, the goal was to increase 

affordable housing units for families earning between 50 and 80 percent of the area median income.

In 2017, 191 units were produced, including 144 units at 80 percent AMI and the balance at 50 

percent AMI.10

There is considerable variation in the structure and goals of inclusionary zoning programs 

throughout the country: some IZ programs are voluntary, and others are mandatory. The programs

are triggered by different sizes and types of market-rate developments; they target the affordable 

units to different income levels; they have different rules about whether the affordable units must be 

located within the market-rate development or if they may be located off site; and they impose the 

affordability restriction for different lengths of time. 

In the Washington, DC region, for instance, some counties adopted IZ ordinances that (a) serve 

households with incomes up to 80 percent of the area median income, (b) do not allow developers to 

pay fees in lieu, and (c) require that the units must remain affordable for at least 99 years. The D.C. 

zoning commission approved a supplement to the existing inclusionary zoning code that mandates 

that all new affordable housing development projects set aside at least 15 percent of the units for 

families earning up to 60 percent of the area median income rather than the previous 80 percent 

AMI requirement:

11 

https://dc.urbanturf.com/articles/blog/zoning_commission_votes_to_make_inclusionary_zoning_m

ore_inclusive/11497. 

Similarly, the Commonwealth of Virginia allows considerable discretion in how local communities 

design their inclusionary zoning programs. Fairfax County established one of the nation’s earliest IZ 

 

10 See the Fiscal Year 2016 report, pp. 5–6: 

https://dhcd.dc.gov/sites/default/files/dc/sites/dhcd/publication/attachments/DHCD%20FY2016%20IZ%20Annual%20R

eport_0.pdf. 

11 It is important to caution that in terms of total affordable housing production, a higher IZ percentage is not necessarily 

better. In any market there is an upper bound percentage above which a significant number of potential developments 

would not be impacted. In San Francisco, for example, the Board of Supervisors contemplated an IZ percentage of up to 

22 percent of units, which would have been too many to be cross-subsidized by the market rate units given height 

restrictions and local market conditions. 
8 

ordinances in the country. The ordinance has been amended many times over the years, but the 

county has witnessed the most success with its density bonus program, rewarding developers of 

affordable housing a density bonus of up to 20 percent for producing additional affordable dwelling 

units (ADUs): http://www.housingvirginia.org/wpcontent/uploads/2018/07/HV_Inclusionary_Guidebook.pdf. 

San Diego, California

Strategy #4—Experiment with Shared Parking. Because parking is very expensive to build, this 

strategy entails that property owners of developments adjacent to multifamily housing 

establishments agree to share parking lots to reduce traffic and the maintenance costs associated 

with unused spaces. San Diego’s Shared Parking Ordinance was revised recently to facilitate these 

agreements and to promote greater density that would support more affordable housing units:

https://www.sandiego.gov/sites/default/files/housing-inventory-annual-report.pdf. 

Boston-Cambridge-Newton, MA, NH

Strategy #5—Use City-Owned Land through Ground Lease. In regions where the rents are 

exceedingly high, municipalities can make use of the existing or surplus land they own to facilitate 

the development of affordable housing. In the ground lease exchange, a city “rents out” a parcel or 

parcels of land that it owns to a developer at a discounted price for a specified number of years 

(typically 75 to 99 years). Although ground leases generate much less revenue than does a sale, the 

benefit ensures that some affordable housing units are preserved. Ground leases can be combined 

with other affordable housing financing tools, such as the Low-Income Housing Tax Credit 

(LIHTC). Boston’s Imagine 2030 program assists potential renters with locating available 

affordable housing units that have either been produced or preserved through the program:

https://www.boston.gov/news/new-online-tools-expand-access-affordable-housing. 

New York-Newark-Jersey City, NY-NJ-PA

Strategy #6—Leverage Public-Private Partnerships for Affordable Co-Housing. New York City 

will launch a pilot program called ShareNYC that will offer co-housing rental units to very lowincome families. The city will also consider extending the program to include private developers of 

mixed-income co-housing12 projects. ShareNYC will be funded through a variety of financing tools, 

including publicly owned land ground leases: https://www1.nyc.gov/site/hpd/developers/requestfor-expressions-of-interest/share-nyc-rfi-rfei.page. 

Seattle-Tacoma-Bellevue, WA

Strategy #7—Create Affordable Renter Units through the Expansion of the Multifamily Tax 

Exemption Program. Seattle’s Multifamily Tax Exemption program offers property tax abatement 

for developers of market-rate housing who build housing for renters with incomes between 65 and 

85 percent of the area median income. The state can allow for the abatement to continue in 

 

12 Co-housing is described as a community of private homes or units that contain traditional private spaces, such as a 

bathroom or small kitchen, but also contain larger amenities where the community of homeowners or renters congregate 

and interact. These larger amenities commonly include recreational spaces, a kitchen, laundry, and recreational spaces 

that residents share.
9 

perpetuity production outside Seattle’s Urban Village neighborhood: 

https://www.seattlehousing.org/housing/housing-choice-vouchers/renting-with-a-voucher/multifamily-tax-exemption-program. 

Miami-Fort Lauderdale-West Palm Beach, FL

Strategy #8—Develop an Affordable Housing Master Plan Using Vacant Land. The region has an 

abundance of underutilized properties and vacant land available outside the Urban Development 

Boundary for potential affordable housing projects. Most of this land (11,012 acres) is publicly

owned. The land can be repurposed for residential or mixed-use development to serve a growing 

population: https://civic.miami.edu/_assets/pdf/housing-initiatives/housing-reports/Dynamics-ofHousing-Affordability-Inclusionary-Zoning-2017-4-19-Final.pdf.

Statewide Examples of Affordable Housing Strategies

California—Adopt Statewide Comprehensive Affordable Housing Laws. Facing the greatest 

affordable housing crisis in the country, the state recently adopted 15 bills that establish priorities 

for expanding affordable housing options. The most ambitious of these measures include the 

following: 

• AB 1505 requires that new rental housing projects set aside below-market rate units of a 

specified percentage in multifamily development projects for low- to moderate-income 

renters. The bill allows the state substantial review and approval for projects in jurisdictions 

that adopt inclusionary housing projects in which at least 15 percent of development units 

are set aside for low-income families: http://www.meyersnave.com/ab-1505-revives-powercities-counties-impose-inclusionary-requirements-rental-housing-developments/. 

• SB 540 and AB 73 give local governments authority to determine Workforce Housing 

Opportunity Zones, in which at least one-half of the housing would be affordable to 

households with incomes between 50 and 80 percent of area median income: 

http://www.meyersnave.com/wpcontent/uploads/AffordableHouseingBillPack_GoetzPlaza-DJ-1.10.18-New-Laws.pdf. 

Hawaii—Create a Statewide Affordable Housing Revolving Fund. In April 2018, the state 

legislature authorized a Rental Housing Trust Fund devoted to 25,000 new affordable rental housing 

construction projects and the rehabilitation of existing rental units affordable to families at or above 

50 percent of the area median income. The legislation expands the general excise tax exemption for 

the construction or substantial rehabilitation of properties with affordable housing units when all of 

the units are available to households with incomes at or below 140 percent of the area median 

family income, of which at least 20 percent of the units are available to households with incomes at 

or below 80 percent of the area median income: 

https://www.capitol.hawaii.gov/measure_indiv.aspx?billtype=HB&billnumber=2748&year=2018. 

Nevada—Establish a Statewide Affordable Housing Trust. Nevada’s Account for Low-Income 

Housing program is one of the oldest Affordable Housing Trust funds enacted at the state level.

Created in 1988, the program allocates formula grant funds to local jurisdictions to expand or 

preserve the supply of affordable rental housing units. Program funding is generated through a 
10

transfer of property tax on some designated value of real property. Affordable units are reserved for 

individuals (or households) earning at or below 60 percent of the area median income: 

https://housing.nv.gov/programs/Account_LIH_TF/. 

Massachusetts—Expand Accessory Dwelling Units. Accessory dwelling units (ADUs), sometimes

referred to as “granny flats” or “mother-in-law units,” have not always been popular with local 

residents, however effective they may be as housing. Some states have prevented local governments 

from promulgating land use restrictions that make ADU development more difficult. As a result, 

ADUs have become a more acceptable tool for the preservation of affordable housing.13 Case 

studies in Massachusetts offer examples of how communities can expand housing options for 

persons with disabilities and seniors aging in place—two underserved populations in great need of 

decent-quality, affordable housing.14 For more information and state-level case studies, see 

https://www.mass.gov/service-details/smart-growth-smart-energy-toolkit-modules-accessorydwelling-units-adu. 

Virginia—Offer Technical Assistance to Local and Regional Communities to Identify Worst Case 

Housing Needs. Finally, states can provide technical assistance to local and regional entities to 

identify affordable housing needs. Researchers at the Urban Land Institute suggest that teaming 

with local colleges and universities could provide useful data and analysis on growth projections 

and estimates of the amount of affordable housing required to meet future demand. The State of 

Virginia’s Department of Housing and Community Development is working with colleges and 

universities in 11 regions across the state to gather this data and recommend solutions for expanding 

affordable rental housing. See the report, “Yes In My Backyard (2017), at

https://americas.uli.org/wp-content/uploads/sites/125/ULI-Documents/State-Housing-PolicyReport-2017.pdf. 

This review has looked only to reforms that have been implemented by state or local government.

The serious obstacles to development of affordable market-rate housing will surely require 

additional changes to statutes and ordinances that have not yet been tested. HUD has continued to 

look for locally implemented solutions to the affordability crisis that have proven successful.

 

13 See, for instance, the Los Angeles, CA example: http://www.businessinsider.com/granny-flat-law-solution-californiaaffordable-housing-shortage-2017-3. 14 See HUD’s report on ADU case studies at https://www.huduser.gov/portal/publications/adu.pdf.