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Strategies for expanding housing options in high-opportunity metro areas

In March, the U.S. Bureau of Labor Statistics released data on metropolitan area job growth. Among the largest 100 metro areas, the five regions with the fastest job growth were San Jose, Ca.; Cape Coral, Fla.; Fresno, Ca.; San Francisco, Ca. and Dallas, Texas. These are also some of the places with the biggest housing affordability challenges. According to our recently released Housing Landscape 2015, 27 percent of low- and moderate-income working households in the San Jose metro area faced a several housing cost burden—that is, they paid more than half of their income on housing costs each month. In San Francisco, 26 percent of working households were severely cost burdened. Only in Dallas was the rate of severely cost burdened households lower than the national average, at 18.5 percent. (Housing Landscape only analyzes the 50 largest metro areas so Cape Coral and Fresno are not included.)

Places with the greatest opportunity for economic opportunity and mobility include those where job growth is fastest. So metro areas with fast job growth and high housing costs are places where many lower-skilled and lower-wage workers are challenged to find affordable housing. Living in these regions is out of the question for some. As a result, low- and moderate-income workers may have a harder time accessing areas of opportunity, where job growth is strongest and the potential for economic mobility may be greatest.
High-cost regions need to be particularly innovative and strategic to find ways to increase affordable housing options. Increasing the overall supply of housing is an important step towards expanding the availability of housing at all price and rent levels. NHC’s Center for Housing Policy writes on a number of local affordable housing strategies that are helping to enable high-cost areas to promote and expand the supply of affordable housing.
In many cities and urbanizing suburban jurisdictions, height and other zoning restrictions could be relaxed to expand housing supply, and these development incentives should be linked to the provision of affordable housing. “Inclusionary upzoning,” which links affordability requirements to increased density, is a policy used in many high-cost jurisdictions, including Washington, DC, New York, Los Angeles and San Francisco.
Reducing the land costs of a residential project can be a valuable way to foster housing affordability for lower-income residents in high-cost areas. Our recent report prepared for ULI Washington highlights some of the best practices in local public land policy and development.
In many cases, investments in transit and other infrastructure catalyze increases in the value of properties that are well-located near the new amenities. While this growth can be positive for the overall neighborhood, it can also threaten the continued availability and opportunity for construction of new affordable housing, especially for families with very low incomes. Ensuring equitable development near transit is important for expanding affordable housing options in high opportunity metros.
Look for more to come from the Center for Housing Policy on strategies to build economically diverse communities and to expand housing options in high-growth, high-cost areas.
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