Alex Milan Tracy/Sipa USA via AP Images
Newly constructed homes for rent in Southeast Portland, Oregon, May 6, 2020
In late 2018, Minneapolis became the first city in the nation to end single-family zoning in order to promote more affordable housing and end the segregation that exclusionary zoning had promoted for a century. The next year, Oregon passed a similar halt to single-family zoning, with specific requirements allowing even higher densities in the Portland metro region.
It’s not a coincidence that both these groundbreaking measures took place in the two metropolitan regions, the Twin Cities and Portland, which are acknowledged to have the strongest regional governments in the nation. While there are many causes for the crisis of affordable housing in the United States, a critical problem is that the conflicting goals of cities and suburbs lead to housing being a low priority for local jurisdictions. Stronger regional governments bring those disparate interests together and allow a far more comprehensive vision for integrating housing, job creation, and transit planning.
The Minneapolis measure was explicitly framed as part of the city’s portion of the region’s 20-year planning process. A whole series of meetings over two years led to the Minneapolis 2040 plan, itself part of the comprehensive planning goals produced by the regional government, the Twin Cities Metropolitan Council. Ending single-family zoning was part of the broader plan for ending racial disparities, improving housing and transit coordination within the region, and building climate resilience.
In Oregon, planning around Portland’s regional growth boundary was critical in making the need for infill housing part of the state’s public debate. “By having a regional government with a plan on how to do things better, it leads to better discussion on what to do” about issues like housing policy, argues Lynn Peterson, president of Metro Portland, who is the only elected executive of a regional government in the nation.
Oregon’s end of single-family housing zoning mandates was “built on a civic tradition of regionalism that has definitely been shaped by Metro [Portland]—and pushed by the advocacy groups around Metro, notably 1000 Friends of Oregon,” says Michael Andersen, senior housing researcher at the Sightline Institute, which promotes higher-density building, especially in the Northwest.
These are encouraging changes in policy, but they are not enough even in Portland and the Twin Cities. Similar changes in policy are few and far between across the country, as rental and home prices continue to spike and new housing construction continues to lag the pace of decades ago. The national rental vacancy rate fell to 5.8 percent in the third quarter of 2021, the lowest level in four decades. The decade of the 2010s had less than half the new single-family housing starts per capita than any postwar decade. Multifamily housing starts are comparable to their levels in two previous decades, but they are still below earlier decades’ start rates, and far below what’s required to make up for the collapse in overall housing construction in the last ten years.
In the immediate postwar period, older Northern cities outsourced housing construction to their suburbs, even as their overall metropolitan growth tended to slow. The nation also saw a lot of housing built in Sun Belt cities, but those Sun Belt cities often incorporated what would have been suburbs under a single city government: Phoenix governs 517 square miles, Houston 669 square miles, and Jacksonville 747 square miles. It was a sprawling approach to housing, but the broad geographic reach of what analyst David Rusk called these “Cities Without Suburbs”—that is, without much development beyond the cities’ boundaries—had decent coordinated investments in jobs and housing. Notably, as sprawl has since gone further beyond even those Sun Belt city boundaries, housing growth has slowed even in places like Houston that once were powerhouses of new housing.
The fundamental problem is that most local governments don’t have an incentive to increase housing construction locally, since people increasingly live under one government, work in another town or city, and shop in a third altogether different jurisdiction. Pre-pandemic studies found only 31 percent of people live and work in the same principal city within a metropolitan region, with 40 percent commuting between suburbs, 21 percent commuting from suburbs to a principal city, and 8 percent commuting from a principal city to the suburbs.
Since suburban governments have a disproportionate dearth of business or retail activity that they can tax, they end up with perverse incentives to limit housing to only the most economically attractive residents. A study by the American Farmland Trust found that for every tax dollar collected from newly developed suburban residential property, about $1.25 in services must be paid—a loss of 25 cents. Other municipalities offer “beggar your neighbor” tax incentives to attract local retail centers, luring shoppers from neighboring towns. The result is a competition between local jurisdictions to attract the most economic activity while excluding any affordable housing that might attract residents using more services than they pay in local property taxes. Many such residents end up driven to the outer reaches of a region, often in unincorporated areas with few services, helping drive the climate-destroying sprawl that has expanded land consumption at roughly twice the rate of population growth.
The core of the problem is that housing, transit systems, and job creation are all mutually dependent, yet with commuters crossing local city and town boundaries every day, only regional coordination and shared returns from growth can create incentives for housing, particularly multiunit housing, to be built in ways that are affordable and transit-accessible.
Housing advocates tend to concentrate on policy and funding levels, but what is also needed is rethinking the ways our fractured governmental divisions make that coordination nearly impossible. Strengthening regional governments and changing who makes decisions (and whom they represent), on the model of Metro Portland and the Twin Cities Metropolitan Council, need to be priorities for housing advocates.
The fundamental problem is that most local governments don’t have an incentive to increase housing construction locally.
Many local leaders admit they can’t solve housing on their own. “Housing is an issue that very much should have a regional approach,” argues Brooks Rainwater, who heads the Center for City Solutions for the National League of Cities. “By changing thinking about how you have density and multiple uses within the region as a whole, you’re going to be able to address some of the challenges that we’ve seen with housing costs.”
Only with such planning will transit be coordinated with housing, which itself lowers overall costs for residents by reducing commutes and lowering congestion delays. Regional planning can also focus job creation around transit nodes, further bolstering ridership on transit systems and reducing transportation costs for residents. Transit nodes that cluster housing and businesses together have the additional benefit that if one business fails at the location, another business is often eager to take over the space, as is not the case in exurban business parks, where no one usually wants to take over the space if a business folds.
It’s worth stressing that regional governments do not have to be built from scratch. While often invisible to local residents, the federal government has quietly encouraged the creation of what are called Metropolitan Planning Organizations (MPOs) for 400 metropolitan regions around the nation. These organizations, governed largely by representatives of local governments, are mostly focused on helping to coordinate federal transit dollars and associated planning as required under the 1991 Intermodal Surface Transportation Efficiency Act (ISTEA). There are also parallel councils of governments that often coordinate other aspects of regional policy in parallel with the MPOs.
But with more federal funding directed to these regional governments, and with stronger powers granted to them by local residents or by states, regional governments could deliver more of the benefits we’ve seen in places like Oregon and the Twin Cities—which themselves have had their power strengthened step-by-step over decades.
The strength of Twin Cities’ regional governance derived from state legislation passed in 1971 which required that 40 percent of annual growth in commercial and industrial tax revenues go into a regional pool. This discouraged municipalities from trying to “steal” revenue-generating businesses from each other and encouraged more cooperative economic development.
“The biomedical facilities in our inner suburbs have made big regional investments that created thousands of high-level jobs. And everyone benefits,” argues Myron Orfield, a former Minnesota state legislator who helped strengthen the power of the regional government when he was in office and now consults with other local leaders around the country on strengthening their own regional governments. Even the Mall of America outside Minneapolis, he notes, which might seem like one more exurban eyesore, is actually an engine funding mass transit and other public goods run by the Metropolitan Council because of revenue-sharing requirements.
Metro Oregon’s power originally stemmed from 1973 land use legislation that established an urban growth boundary and left it up to the regional organization to plan broader land use within it, which focused negotiations with local governments on infill development to preserve open land outside the boundary. This built public confidence in the regional body over time, and in 2018 voters approved a ballot measure that created a bond authority to fund affordable housing overseen by Metro. It was followed by a 2020 measure for additional funds administered by Metro to keep people from falling into homelessness and providing other wraparound services for the homeless.
“When you add transportation into housing policy, you are likely increasing housing values,” notes Metro’s Lynn Peterson. So Metro is working to develop a policy to buy up affordable housing before transit is brought in to keep it affordable for residents. “We have proven we can do high-quality infill development” that includes housing for the disabled and low-income people at transit nodes, Peterson notes.
Other regional governments are increasing their involvement in housing planning as well, observes Erich Zimmermann, deputy director of the National Association of Regional Councils (NARC), which does skills training for various regional authorities and advocates for their interests in Congress. Most regional councils aren’t directly involved in zoning decisions, but by integrating housing discussions with transportation planning decisions, they can help push local governments to make more transit-oriented development decisions. Zimmermann cites the Columbus region, where some local governments were happy to hand off more housing planning decisions to the Mid-Ohio Regional Planning Commission “to take the heat off them.”
The federal government has quietly encouraged the creation of what are called Metropolitan Planning Organizations (MPOs) for 400 metropolitan regions around the nation.
One of the more effective examples of regional governance is the D.C.-based Metropolitan Washington Council of Governments, which has coordinated housing development with the D.C. Metro system, adopting official targets for new affordable housing throughout the region, with a goal that at least 75 percent be built at or near high-capacity transit. By spanning D.C. and its two surrounding states, this effort shows another reason strengthening regional government is so critical. It’s not just that many state governments are hostile to urban initiatives, as I detailed in this article. The problem is also that roughly 40 metropolitan regions span multiple states, so regional governance offers the only effective way to coordinate economic development there.
Missouri and Kansas are both state governments with little incentive to encourage greater economic cooperation across the Kansas City metropolitan region, which spans both states. That leaves the task to David Warm, the executive director of the Mid-America Regional Council, which is governed by the 119 city and county jurisdictions in the KC metropolitan region. In an interview, he detailed the MPO’s regional housing partnership to build housing at a range of price points. “Our focus is to bring together the interests involved in housing, not just elected officials, not just homeless services, but developers, bankers, architects, to bring them together on an agenda to address barriers to affordable housing.”
The MPO partners are looking at community land trusts and cooperative ownership models, which give affordable housing an ownership structure to last over the long term. They’re also seeking to expand the vocational education needed to provide the skilled workforce to do the construction work. Warm outlines how they use transit planning to promote sustainable growth. “Every town is being encouraged to increase dense, walkable downtowns. We make transit allocations that reinforce local plans encouraging greater downtown density.”
But Warm admits that having more federal money flow directly through regional MPOs would strengthen the incentives for local governments to cooperate regionally.
This highlights what the federal government can most easily do to strengthen regional planning and governance: Stop sending money meant for urban initiatives to states usually hostile to those goals and send that money instead to MPOs. By so doing, the federal government would strengthen urban America’s ability to tie transit development to affordable, accessible housing decisions by local governments.
While the recent infrastructure bill earmarks much of its money for specific projects and gives states control of a large portion of the funds, it also gives the secretary of transportation discretionary control of well over $100 billion in funding that could be used to reinforce planning goals by regional councils.
A bigger step would be putting the MPOs in charge of other sources of federal funding, particularly housing dollars. The largest federal pot of money for housing is Community Development Block Grants distributed by the Department of Housing and Urban Development. Much of those funds go directly to cities and counties, but other funding is given to states to award. Warm notes that even a lot of local HUD money meant for regional coordination on housing and homelessness goes not to local governments but to what are called “continuum of care” organizations, which, supposedly, are regional planning institutions, but with often opaque and unaccountable governance structures. Reallocating those program dollars to MPOs would encourage greater coordination between metropolitan transit and housing planning.
Similarly, the Department of Labor now funds a system of Workforce Boards meant to encourage job retraining and support job creation across regional economies. However, as Tracy Loh at the Brookings Institution argues, the department’s regional definitions are outmoded and don’t match actual economic regions anymore. She cites the example of San Francisco and San Jose, which share workforces yet have separate workforce board regions. Again, vesting MPOs with responsibility to coordinate Workforce Boards with local governments and businesses would put responsibility for coordinating the trifecta of jobs, transit, and housing under the same regional planning umbrella.
The other part of the solution would require the federal government and its own agencies to better coordinate with one another, which would naturally lead to working through regional governments as the most efficient way to coordinate federal government initiatives. The Obama administration had a short-lived program, the Partnership for Sustainable Communities, in which the Transportation Department, Housing and Urban Development, and the EPA began promoting that kind of coordination. The Biden administration could revive some version of that, this time including the Labor Department in the mix, and focus that coordination of federal agencies on working with MPOs in each metropolitan economic region.
One measure of the depth of our institutional problem is that we have a political language for federal power, a language for state power, even one for city power, evoking old political machines. But what we lack, as Myron Orfield argues, is a vision that sees that “America is a metropolitan society. The vast majority of people live in suburbs but have no governance that reflects or represents the reality of our society.” Housing has become the biggest casualty of that failure of vision.
If affordable housing is going to be built again at anything like the scale we need, then we need institutional systems of regional government where it is in the joint interest of cities and suburbs to make it happen.
