Housing and Growth Controls Not Mutually Exclusive
Providing affordable housing and encouraging growth in town centers
have been interwoven goals of Vermont’s land use policy since
the 1970s. “Affordable housing and growth controls do not
have to be mutually exclusive,” states Beth Humstone of the
Vermont Forum on Sprawl. Vermont’s approach has been to provide
assistance to programs supporting smart growth activities rather
than prohibit development; an approach that has yielded positive
results throughout the state.
The Green Mountain State has undertaken a number of initiatives
to promote managed growth in tandem with the development of affordable
housing. In 1987, the state created the Vermont Housing and Conservation
Board to provide financial assistance for land conservation, historic
preservation, and affordable housing under the auspices of a single
According to Humstone, the Board has focused its affordable housing
resources on redevelopment or rehabilitation of existing buildings
first and on new construction second. “They prefer rehabilitation
of existing housing rather than new construction,” she said.
“If they fund a new construction project, they strongly encourage
this type of development in areas with existing services and transportation.”
In its Consolidated Plan, Vermont also prioritizes distribution
of federal funds through the Community Development Block Grant (CDBG)
program to locally designated downtowns, village centers, and other
In 1988, the Vermont Legislature enacted “Act 250”
to encourage appropriate development of communities throughout the
state by local governments and to require regional and state planning.
The Act also requires that local governments plan for increasing
demands for housing; especially housing for those with limited incomes.
The Act includes specific provisions for housing for low- and moderate-income
Vermonters and requires that the goal be met in municipal plans.
Vermont also provides other incentives to developers in designated
downtowns for the use of existing buildings. To assist in rehabilitation,
the state has developed separate code standards for existing buildings
under the guidance of the Vermont Department of Labor and Industry.
In addition, approximately 21 cities enforce their own local codes.
In designated downtowns, the state offers tax credits for up to
50% of the cost of elevators, lifts, or sprinkler systems to encourage
the reuse of upper floors for housing and commercial purposes. Vermont
offers a 10% add-on to the federal rehabilitation tax credit of
20%, thus providing property owners in the 13 designated downtowns
with a total tax credit of 30%. A 5% state add-on to the federal
tax credit is available within designated village centers, and there
is also a 25% state tax credit in designated downtowns for the rehabilitation
of older buildings that don’t qualify for the federal rehabilitation
At the same time, the state has increased the number of housing
units requiring an environmental review. Act 250 requires developers
to complete an environmental review of a development proposal if
10 or more units are involved. This requirement applies to both
rehabilitation and new construction of mixed income and mixed use/mixed
income projects only. For developments in designated downtowns,
the threshold increases with the size of the city. For example,
the law does not become effective in Burlington unless the development
is for 100 units or more.
Growth Management Does Not Result In Higher Prices
Housing prices in Vermont’s cities have increased over time
and vacancy rates are currently very low, making it difficult to
find affordable housing in those locations. Humstone contends that
market forces have had a greater impact on price increases than
growth management techniques. A recent housing market study conducted
by the Vermont Forum on Sprawl indicated that 62% of recent movers
are looking for homes in Vermont growth centers. Finding such housing
can be difficult, however, given current market prices and low vacancy
rates. As a result, the percentage of respondents relocating in
these areas has been much lower.
According to Humstone, in spite of the higher housing costs often
found in downtown areas, urban neighborhoods, and village centers,
rural housing is not immune to rising costs. She says that the need
for additional infrastructure and other municipal service demands
add to the cost of providing housing in rural areas. Unlike the
existing roads, sewer lines, and other public infrastructure elements
that are readily available in most developed areas, in rural locations,
the developer must often supply these enhancements. In addition,
rural towns must eventually bear the burden of additional costs
for longer school bus routes, additional police patrols, and road
upgrades in remote locations. Humstone suggests that if new development
locates in existing settled areas, the need for additional infrastructure
is reduced, and other costs can be more readily absorbed.
“NIMBYism and lengthy permit appeals continue to be one of
our biggest obstacles to creating affordable housing in Vermont,”
Humstone says. “Those who support smart growth have been able
to fight the notion that smart growth is another word for exclusionary
zoning.” Apparently, there are many in Vermont who agree with
her position. Nine diverse organizations have formed the Vermont
Smart Growth Collaborative, which endorses housing projects that
meet a set of smart growth criteria. Recently, four out of seven
housing projects that were endorsed were affordable housing projects.
By undertaking the review and endorsement process, they hope to
reduce the influence of those who oppose development because of
In addition to this non-governmental effort, Vermont is in the
midst of a permit reform debate for both state and local permitting.
Although there are wide differences of opinion on the best way to
proceed, most agree that the current appeals process needs to be
Different Ways to Achieve Smart Growth
Vermont’s approach has been to encourage development that
meets smart growth principles and goals, rather than simply prohibit
development out of hand. Humstone contends that state investments
can have a major influence on the direction growth takes in Vermont.
She contends that other states can direct resources to designated
growth areas, and by so doing, can see positive, tangible results
in their communities. Other states can also provide tax credits
for development in designated areas, reform building codes to promote
rehabilitation of existing buildings, and examine ways to consolidate
the zoning appeals process. Humstone suggests that, rather than
creating prohibitions, providing incentives has been a more effective
way to control growth, while at the same time promoting the production
and availability of affordable housing.
For more information, contact Beth Humstone at email@example.com.
Density Bonuses in Berkeley, California
Increasing housing costs in the San Francisco Bay area are creating
growing pressures in communities throughout the area. Among the
most desirable neighborhoods in the Bay Area is Berkeley which faces
tremendous pressure to increase densities as a means of increasing
the affordable housing stock. Yet the city and its developers face
many obstacles to new development, including an already fully developed
community, complex ordinances, and an often long project approval
processes. One example is the Neighborhood Preservation Ordinance
which requires a use permit and a public hearing for any new housing
construction. While this hearing process allows interested citizens
a role in the development process, it also requires developers to
obtain City permission for any development activity. In most communities,
certain construction activities can be undertaken “by right”
if the development is permitted in the zoning ordinance.
Minimizing Obstacles to Create More Units
According to Stephen Barton, Housing Director for the City of Berkeley,
“The multifamily development process is different in Berkeley,
since within most multifamily-zoned residential districts there
are no limits imposed on the number of units per acre allowed.”
The zoning law contains performance standards for floor area ratios,
maximum heights, parking and set-backs that the city feels meet
the spirit of the law without establishing specific unit limits.
Since the performance standards limit the number of units that can
be developed on a site, the City has additional flexibility with
respect to the maximum number of units allowed on a given site.
To help generate more affordable housing units, the City provides
incentives through its density bonus program, as required by California
law. A density bonus allows a developer to construct a building
beyond the intensity allowed by zoning. A common incentive program
used to encourage developers to build affordable ownership and rental
housing, the density bonus allows the City to adjust performance
standards to increase the number of units permitted by at least
25 percent and can be offered to a developer if the proposed development
meets certain thresholds.
The base number of units is the number normally allowed within
the existing envelope of the zoning ordinance. Then, if at least
10 percent of the units in the development are made affordable on
a long-term basis to those with very low-income (less than 50 percent
of area median) or 20 percent of the units are affordable to those
defined as low-income (less than 60 percent of area median family
income) or if 50 percent of the units are reserved for the elderly,
then the City provides a density bonus. Most developments participating
in the program choose to set aside 10 percent for very low-income
As long as a developer meets the qualifications for the density
bonus, the City can waive the relevant zoning requirements in order
to provide the additional units; a far more streamlined approach
than that required for securing a variance.
If the 25 percent density bonus still falls short of making the
project economically viable, the City can allow additional bonus
units. And while the density bonus units can be market rate, the
developer must provide detailed financial information showing that
the additional incentives are necessary for the project to be feasible.
The City has the flexibility to waive other development requirements,
such as parking, open space, height limits, and set backs if these
requirements have too great an impact on the project’s economic
Barton states that two-thirds of the new units built in the last
10 years would have not been feasible without density bonuses.
Still, not everyone in Berkeley supports the flexibility that these
City ordinances offer to planners and developers. Some citizens
oppose the increased density, concerned that such actions may adversely
affect their neighborhoods, traffic, and parking. Recently, a group
of citizens tried to pass a referendum to stop the City from allowing
development exceeding a certain height. The group was unsuccessful,
as Berkeley voters defeated the measure by a four-to-one margin.
A common compliant among builders is the often long and costly review
process the City must undertake for each project submitted under
the density bonus initiatives. Developers do, however, have the
option of constructing housing that does not qualify for the density
bonus, thus avoiding the additional financial scrutiny that the
“additional incentives” aspect of the density bonus
invokes. To streamline the process, the City has instituted a number
of reforms to the development process. Berkeley has established
a one-stop permit center, and will assemble various stakeholder
groups to discuss both the City’s and the developer’s
needs at the outset of the application process.
Overall, Barton states, “While some oppose the Planning Department’s
actions, most support the density bonus program and its approval
Accessory Dwelling Units Help Expand Affordable
In 1994, Washington State passed legislation mandating that cities
of 20,000 or more accommodate accessory dwelling units (ADUs) in
single-family neighborhoods. According to Max Bigby, a housing planner
for A Regional Coalition for Housing (ARCH) in East King County,
the Seattle metropolitan area has added 300 ADUs in the eight years
since the law went into effect. ARCH promotes ADUs as part of an
overall solution to addressing the region’s shortage of affordable
As provided in the King County, Washington 2000 Comprehensive Plan,
ADUs are expected to improve access to affordable housing, on-site
housing for workers and caretakers, housing for extended family
members, and rental income for landowners. Complete with kitchen,
bathroom, and sleeping facilities, ADUs are located inside, attached
to, or detached from the primary home, and provide homeowners with
additional sources of income or housing for extended family members.
In many communities, zoning laws exclude ADUs from single-family
neighborhoods. However, some local governments allow ADUs based
on their potential to expand the supply of affordable housing while
promoting infill development.
ADUs still fulfill their traditional roles, generating extra income
to cover rising taxes or providing living quarters for an elderly
person’s caretaker. When housing needs change—children
leave home or the homeowner becomes widowed—homeowners may
move into the ADU and rent out the rest of the house. “That’s
why ADUs are flexible assets,” Bigby explains. “They
evolve and adapt to the owner’s needs over time.”
Some Restrictions Remain
Affordable housing advocates, like ARCH, promote ADUs’ benefits
and their potential to expand the supply of affordable rental units.
Often, ADUs do not require public rental or construction subsidies,
resulting in lower overall building costs. ADUs typically cost 25
to 40 percent less to build than a comparably sized unit on a separate
lot. Because of the lower costs, ADUs generally rent for less than
a traditional unit, so they can provide an affordable housing alternative
in many communities. Advocates also point out that ADUs complement
smart growth policies by expanding housing within developed areas
without changing the character of the neighborhood.
While restrictions against ADUs in single-family neighborhoods
have lessened in the Seattle area, some restrictions remain. The
homeowner must live in the house and all ADUs must comply with zoning
setback and building envelope requirements. Rather than cause problems,
as some opponents feared, ADUs generally encourage better housing
maintenance, since homeowners can apply some of the rental income
to upkeep, asserts ARCH’s Max Bigby.
ADU Zoning in North Carolina
The City of Cary, North Carolina, located near Research Triangle
Institute and the Raleigh-Durham International Airport, is facing
an affordable housing shortage due to rapid growth in the region
during the 1980s and 90s. In 1999, the City commissioned a study
to examine its Unified Land Development Ordinance and provide recommendations
for revisions. The study recommended that the City take measures
to increase densities in targeted growth areas that had existing
infrastructure. One suggestion was to revise the City's ADU ordinance
to increase flexibility and encourage the development of ADUs. As
Shawn McNamara, senior planner for affordable housing in Cary explains,
"The current ordinance requires the ADU to be attached to the
main house and only allows members of one's family to live in the
accessory unit. We needed the extra flexibility to encourage the
use of this type of housing in developing areas, both to steer growth
to areas, served by existing infrastructure and to provide additional
affordable housing opportunities."
Under the proposed ordinance revision, ADUs would only be allowed
as part of new Planned Developments or as part of the Town Center
redevelopment. The city would continue to place restrictions on
maximum dwelling unit sizes, but would not restrict who could live
in the accessory unit. Additionally, the City proposes that all
parking, design, and access requirements must be met for all its
ADUs. Because the ordinance is directed toward providing accessory
units as an integral part of its development plan, City officials
stated that opposition to the effort was minimal. The City has debated
these and other changes to the Development ordinance for months
and staff hopes to take recommendations to the City Council in April
2003. "This new flexibility will allow us to create new ADUs
in the next few years and hopefully make better use of this affordable
housing option," said McNamara.
For information on ADUs in Cary, contact Shawn McNamara, Senior
Planner (Housing), Cary Planning Department, (919) 469-4086.
For additional information about the ARCH program, contact Max
Bigby, Housing Planner, ARCH, (425) 861-3677.