December 18, 2019

3 surprising issues that push housing costs up

Loving couple looking at their dream house

Affordable housing is an end goal that most people agree on in the abstract. Few people would disagree with the idea that the average person should be able to afford to live in the city they work in. But when it comes to regulating the things that push housing costs up, disputes arise between advocates for affordable housing and advocates for public safety, property rights, and funding for public services.

Looking beyond the larger trends of wealth inequality and gentrification, there are three surprising issues that intersect with affordable housing. And cities around the U.S. are debating these issues every month in council and committee meetings as they look for solutions that work for all.

Here’s a primer on these three issues, along with some of the keywords that can be tracked using CurateLOCAL to find out when they will be discussed at local government meetings.

Fire Safety

Since 2009, fire suppression sprinklers have been mandatory in all new one- and two-family homes according to the International Residential Code (IRC).

But only California, Maryland, and Washington, D.C. have successfully passed laws adopting the 2009 IRC, mostly because of opposition from the housing industry. The industry argues that requiring sprinklers would make homeownership unaffordable because it costs up to $5,000 to add sprinklers to a new home, according to some estimates.

In fact, 29 states have not only refused to add residential sprinkler requirements to their statewide code, but they’ve also passed laws prohibiting local governments from passing their own residential sprinkler requirements.

But in the remaining states (AR, CO, FL, IL, IA, ME, MS, MT, NE, NV, NM, OK, OR, RI, SD, TN, VT, WA, WY) dozens of local governments have added it to their code, and others are currently considering it, making it a hot topic to watch in local government.

Key terms to watch to find out when cities are discussing fire safety include:
-Residential sprinkler
-Residential fire suppression
-Sprinkler

For example, searching “residential sprinklers” in the CurateLOCAL database in Oregon pulls up a council meeting packet from Oct. 22, 2019, which includes an email chain discussing how the town of Madras might implement a requirement for residential fire sprinklers.

Short-Term Rentals

The ability to rent out rooms in your home through a short-term rental service like Airbnb can make homeownership more affordable, but the rise of absentee landlords converting long-term rental units into illegal hotels tends to push up rental prices, a new study from Harvard Business Review shows.

Short-term rentals already face their share of opposition from neighborhoods and hotels. If more evidence directly links Airbnbs to rising rents, cities might take a more aggressive approach to regulating them.

Key terms to watch related to short-term rentals:
-Airbnb
-Short-term rental
-Transient occupancy

For example, searching “Airbnb” in CurateLOCAL brings up the minutes from the Hotel/Motel Tax Advisory Committee meeting in Willowbrook, Illinois. on Oct. 23, 2019, which notes that “the Village is monitoring the impact of Airbnb to the Village.” This could be a predictor of a future ordinance placing new restrictions around short-term rentals.

Impact Fees

Impact fees — also called development fees and service fees — are fees cities charge to homebuilders to construct the public infrastructure needed to support new homes. Those services can include sewer hookups, stormwater management, and streets and sidewalks — all of which directly benefit the new homes. But cities have also begun to use impact fees to fund projects with a wider impact, like community-wide recreational facilities and highways.

Homebuilders tend to oppose impact fees, making the case that they contribute to rising housing costs and place an unfair cost burden on people moving into new houses and apartments. But the American Planning Association counters that impact fees “can be an effective tool for ensuring adequate infrastructure to accommodate growth where and when it is anticipated.”

To find out in advance when cities will be taking public comment on new fees, monitor terms such as:
- Impact fee
-Outdoor recreation plan
- Needs assessment

For example, an agenda for the Park Board Meeting for the city of Hudson, Wisconsin, includes a memo about the Discussion on the Outdoor Recreation Plan, which notes that the city is currently conducting a Park Impact Fee study, and plans to use the results of the study to guide updates to its Outdoor Recreation Plan.

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