Housing Studies Similar results have been seen in earlier studies. A 2021 study by the Terner Center for Housing Innovation at the University of California-Berkley estimated that California’s new statewide zoning mandates would result in new homebuilding only on roughly 1% of existing home lots due to cost of land and other factors. Those same researchers held discussions with developers in seven states and found little appetite for taking advantage of simple zoning changes to build more affordable development. Studies in Australia, where cities face similar housing affordability challenges to those in the United States, also find that reforms and incentives aimed at increasing apartment construction were key to increasing housing stock and affordability in major cities in that country. One of those studies noted that a key component of affordability is that the construction of apartments and townhomes, even with some at expensive price points, allows for the existing homeowners, particularly retirees looking to downsize, to move from their current homes. That frees up those homes for buyers looking within those home ownership markets and at more affordable price points. Closer to home, the City of Raleigh has opened up residentially zoned areas to the construction of accessory dwelling units, or ADUs, with the city going so far as to provide a range of preapproved site plans for potential builders. To date, though, builders have shown only modest interest in taking advantage of the city’s changes. Since 2020, 163 permits have been issued for ADU construction, with 84 constructed to date. Those numbers may be picking up slightly, as 77 ADU permits were issued in 2023. Nonetheless, what all of these studies and numbers suggest is that addressing the housing affordability challenges in North Carolina and across the country will require a complete and complex response. The problem itself is complex, created by factors including job concentration in metropolitan areas, rising land costs, rising housing material costs, and labor shortages. The rise of institutional investors buying homes for rental and short-term rental uses, making up 10% or more of purchases in some markets in recent years, also cannot be overlooked. Policymakers who embrace simple solutions focused only on density allowances are likely to be disappointed. The studies are increasingly making that case. What all of these studies and numbers suggest is that addressing the housing affordability challenges in North Carolina and across the country will require a complete and complex response. NCLM.ORG 35
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