Pennsylvanians are facing a significant issue regarding the affordability of residential real estate. The shortage of housing inventory has significantly increased prices.
Dating back to the real estate downturn after the Great Recession and significantly exacerbated by the disruptions caused by the COVID-19 pandemic, there is currently a significant shortage of housing across the United States, including Pennsylvania. Moreover, increasing mortgage rates have also impacted affordability since 2021.
Pennsylvania municipalities have played a significant role in the shortages and decreased affordability. Housing experts nationwide commonly recognize that housing supply is often constrained by the municipalities themselves adopting rigid planning codes and zoning ordinances that make it impractical for builders to develop higher-density housing types that could improve affordability.
Municipalities and their elected officials have established zoning districts that substantially limit potential property uses or restrict redevelopment of aging buildings. Motivations could be seen as an intention to appease residents wary of anything other than large-lot, single-family homes, the desire to preserve an existing architectural heritage and land use aesthetic, or to maintain a certain neighborhood prototype.
The unintended but real consequence can be a shortage of reasonably priced housing. This article attempts to present a starting point for municipalities considering implementing high-density housing to help address the current affordability crisis.
Why Implement High-Density or “Affordable” Housing in PA?
What is Affordable Housing?
While “high-density housing” is not synonymous with “affordable housing,” it is plainly apparent that low-density neighborhoods generally offer more expensive/less affordable housing than their low-density counterparts.
The term “Affordable Housing” can simply refer to housing deemed affordable to a particular community's residents. It also can have a more formal meaning tied to data related to household income. This relates to the median determined by the local government or housing indexes maintained by county, state, and federal housing agencies.
The Federal Department of Housing and Urban Development (“HUD”) defines affordable housing as housing where the occupants pay no more than 30% to 60% of their gross income for housing costs, including utilities. Affordable housing at those income levels can be vital for a community to provide housing for their critical occupations, such as school teachers, police officers, firefighters, health care workers, small business owners, and other service professionals.
Without housing affordable to those income levels, persons employed in many professions can be rendered unable to reside in their communities, where they work and provide critical local services.
High-Density Housing Initiatives May Alleviate Affordability Issues
The primary obstacles in a municipality’s planning and zoning process are twofold.
It includes local government resistance to incorporating plans to yield more reasonably priced housing and officials’ downright disinterest in cooperating with developers. These factors are contributing to high housing costs.
Recently, one developer sued New Hanover Township in federal court over the Township’s alleged pattern or practice of blocking housing development. They argued that the delays caused by New Hanover officials have already cost the developer over $150 Million.
Zoning Restrictions are a Concern
If certain zoning restrictions were alleviated, developers would capitalize on the opportunity to redevelop. This includes struggling and blighted product types, such as old malls or office space, that otherwise would be left unattended thanks to their zoning classification. Dilapidated warehouses could be transformed into carefully planned residential communities.
So, zoning restrictions can be a major impediment to the implementation of affordable housing in Pennsylvania. Some municipalities have recognized that their existing zoning schemes are outdated or prone to abuse by individual officials. The municipalities have begun working to change the status quo, hoping that their residents will not find themselves placed out of their homes.
How Can Municipalities Go About Adding High-Density or Affordable Housing?
Municipal officials who foresee housing affordability issues may take proactive steps to alleviate the high market prices. One solution is to implement high-density or affordable housing development.
To do so, officials must be willing to undertake a potentially lengthy process that includes compliance with local rules and regulations. Following the Municipalities Planning Code (“MPC”) and input from elected officials, residents, and the public will be essential to influence the locale’s Comprehensive Plan and, ultimately, the ordinance itself.
Municipal officials concerned about impending house price hikes should consider the following course of action:
- Develop a comprehensive strategy specifically tailored to your municipality's circumstances – This is the opposite of a “one-size-fits-all” approach. Municipalities come in many different sizes, with wildly disparate needs and issues that may necessitate novel approaches;
- Meet with the local planning commission – local planning agencies process subdivision and land development applications and contribute to the overall plan for the municipality, including a Comprehensive Plan if required by the MPC;
- Meet with the county planning commission – County planning agencies are responsible for creating and revising the county’s Comprehensive Plan. Although the Comprehensive Plan does not regulate zoning and depends on local land use ordinances to implement its concepts, the Comprehensive Plan is a powerful feature;
- Seek Assistance – Grant money may be available for affordable housing initiatives. The Pennsylvania HOME Program is federally funded and “provides municipalities with grant and loan assistance to expand and preserve the supply of decent and affordable housing for low- and very low-income Pennsylvanians.”
- Public meetings with adequate notice to the community – Successful Comprehensive Plans involve citizen participation throughout the process; the MPC requires at least one public meeting to be held by each of the planning body and government unit;
- Finally, after following all local and state requirements, the zoning ordinance may be formally amended. A majority vote of the governing body is required to adopt or amend a land use ordinance.
Municipalities need to work with local governments and developers to institute a stronger and more favorable outlook on high-density housing. This could offset high housing market prices and benefit important members of their community.
Sean G. Livesey is a real estate attorney with experience in zoning and land development, municipal code enforcement, real estate sales, and leasing. Mr. Livesey is a member of the firm's municipal law group and has acted as conflict solicitor to multiple Montgomery County and Bucks County townships.