Zoning | Permitting | Labor| Impact Fees | Property Taxes | Development Standards
Industry Experts - Policy
Zoning
Zoning codes are a set of rules that dictate what can and can’t be developed on a piece of property. Municipalities are divided into residential, commercial, and industrial zones. Changes to zoning policies may help facilitate the development of lower-cost housing types (e.g. accessory dwelling units, multi-family housing, manufactured homes, or micro-units). You may come across “inclusionary” zoning practices - “inclusionary zoning” (also referred to as “inclusionary housing”) is a policy that requires a portion of new housing development to be affordable to low-or moderate-income households. See below for a few articles highlighting recent changes to zoning at the state and local level.
Relevant Innovative Organizations
National Zoning Atlas - Through a combination of data science and legal analysis techniques, the National Zoning Atlas is creating the first-ever public online repository of standardized data about zoning.
Frolic - Frolic partners with property owners facing displacement and co-develops their lots into multi-family cooperatives.
CA YIMBY - California YIMBY is a community of neighbors who welcome more neighbors. They focus on housing and land use policy at the state and local level to ensure grassroots organizers and city leaders have the tools they need to accelerate home building.
State of Oregon - The State of Oregon expanded affordable housing options through the passage of HB 2001 in 2019. The law requires cities with populations over 10,000 to allow duplexes on all residential lots on which a single family home is allowed. Cities of at least 25,000 must allow triplexes, fourplexes, townhomes, and cottage clusters where single family homes are allowed.
City of Minneapolis - The City of Minneapolis is “upzoning” nearly the entire city which will allow more units to be built in areas that only contained single-family homes while promoting transit oriented development and inclusionary zoning. The so-called Minneapolis 2040 plan is unprecedented and transformative and it provides a model for cities to broadly address affordability challenges.
Next Step - Factory-built housing offers a point-of-entry to the homeownership market for low- and moderate- income buyers, and provides an innovative solution for communities searching for sustainable, affordable housing opportunities.
City of Cambridge: Affordable Housing Overlay - Cambridge, MA’s 100% Affordable Housing Overlay significantly promotes more dense affordable housing development by non-profit developers, who often get priced out by market-rate developers and are mired by cumbersome zoning and project approvals.
Casita Coalition - Casita Coalition fills a unique need in California’s housing policy landscape by focusing on and advocating for policies and practices to encourage the construction of small homes such as ADUs throughout all types of neighborhoods.
Permitting
Permitting in building construction involves obtaining official approvals from local government authorities to proceed with a construction project, ensuring that it adheres to zoning regulations, safety codes, and other relevant requirements. Delays or complexities in the permitting process can impact housing affordability by increasing project timelines and costs. Prolonged permitting procedures can lead to higher expenses due to extended construction periods and added administrative efforts, potentially raising overall housing prices and affecting affordability for both builders and buyers.
Relevant Innovative Companies
PermitFlow - PermitFlow is the “TurboTax of building permits”. PermitFlow is a proptech SaaS platform that allows developers and contractors to effectively track, complete and streamline the construction permitting process. PermitFlow’s platform reduces the time neccessary for pre-development and enables developers to build housing supply faster.
Labor
Labor in building construction encompasses the skilled workforce responsible for various tasks like carpentry, plumbing, and electrical work necessary for home or apartment construction. A shortage of skilled labor can lead to increased labor costs, longer project timelines, and potential delays, all of which contribute to higher construction expenses. This labor scarcity can drive up overall housing costs, making homes less affordable for potential buyers or renters and potentially limiting housing supply in the market.
Relavent Innovative Companies
Building Talent Foundation - The Building Talent Foundation is strategically addressing the severe and persistent labor shortage across skilled trades by connecting trained talent with builders.
Hammr - Hammr is a professional network and labor marketplace for the construction industry. Hammr empowers the people who boot up and build our world.
BotBuilt - BotBuilt creates construction components with robotic precision using AI and computer vision. Framing components are shipped directly to the job site, making framing 5x faster.
KairosXR - KairosXR combines traditional online training techniques for various trades with virtual reality technology to provide a more immersive training experience than traditional online training.
HomeBuilders Institute - The worker shortage in residential construction is severely hurting housing supply and affordability. HBI’s solution is thinking of a new, innovative ways to train skilled workers for the industry. To fill the severe worker shortage, HBI is advocating and working towards increased training, compensation, diversity and productivity.
Build UP - Build UP tackles root causes of integrational poverty— low educational attainment rates, low skilled workers lacking social and economic capital and mobility, and unstable, unaffordable housing to rebuild the minority middle class and close racial wealth disparities.
Diamond Age - Diamond Age is a 3D printing company. The main thing that differentiates this company is a system called factory on-site which uses 26 robotic arms attached to a 3D printing modular structure to perform tasks.
Tough Leaf - Tough Leaf is a network building platform that helps companies meet project-based diversity quotas by connecting them with women and minority workers. The platform empowers minority and women-owned businesses to win more projects in the construction industry.
Bot Built Featured - (20:14-20:58)
Impact Fees
Impact fees are fees imposed by local governments on developers to offset the costs of infrastructure and public services associated with new construction projects such as housing developments. Impact fees can negatively impact housing affordability by increasing the total construction expenses, which might be transferred to homebuyers or renters. High impact fees can result from the need to accommodate growing populations, provide essential services, and address infrastructure demands, leading to increased costs and potentially limiting housing affordability in rapidly developing areas. Some cities / states may offer a reduction in impact fees to incentivize affordable housing development.
Relevant Innovative Companies
Casita Coalition - Casita Coalition fills a unique need in California’s housing policy landscape by focusing on and advocating for policies and practices to encourage the construction of small homes such as ADUs throughout all types of neighborhoods.
CA YIMBY - California YIMBY is a community of neighbors who welcome more neighbors. They focus on housing and land use policy at the state and local level to ensure grassroots organizers and city leaders have the tools they need to accelerate home building.
Property Taxes
Property tax is an evaluated levy imposed on homeowners, determined by the value of their property. To calculate this tax, the property's value is multiplied by the applicable tax rate, which can differ based on the city or state. Property taxes constitute a substantial portion of local government revenues. Consequently, cities with lower median home values, often indicating economic challenges, tend to bear a heavier tax burden due to the necessity of generating adequate funds for city initiatives. This situation disproportionately impacts low-income families, as they face the highest property tax rates relative to their home's value in such cities. Compounding this issue is the escalating cost of homes across various cities and states. While homeowners benefit from the appreciation of their property's value, the drawback is an increase in property taxes. For many low-income households, affording these elevated property taxes becomes infeasible, placing them at risk of displacement from their homes.
Property taxes are also linked to widening the racial wealth gap. Brookings Institute research shows 10% to 13% higher property tax on Black-owned homes than White-owned ones. Appraisers undervalue Black homes by 21% to 23%, reducing potential selling prices. These inaccuracies impact wealth accumulation and increase displacement risks in Black neighborhoods.
Relevant Innovative Companies
Frolic - Frolic partners with property owners facing displacement and co-develops their lots into multi-family cooperatives.
Rocket Community Fund - Make It Home, a Detroit-based financing program, allows for tenants in underinvested neighborhoods to become homeowners by providing loans and resources to buy and renovate blighted and tax foreclosed homes.
Development Standards
Development standards in building a house or apartment are established regulations set by local authorities that dictate the parameters of construction, including factors like zoning, setbacks, and building design. These standards can increase the complexity and costs of construction projects. Stricter requirements can lead to longer approval timelines, additional design expenses, and increased compliance costs, ultimately driving up overall construction costs. As a result, housing prices may rise, making it more challenging for potential buyers or renters to afford housing within their means.
Relevant Innovative Companies
Symbium - Symbium is a computational law platform that mechanizes the rules and regulations of planning codes to help homeowners, design professionals, and planners quickly determine if an ADU is allowed on a property, what the development standards are, and processes needed to build these units.
Madelon - Madelon has designed software that can analyze a location, and determine what can be built there based on size and zoning code.
