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How Changing Zoning Laws Could Ease the Housing Crisis

— May 19, 2022

Another way that allowing accessory units or in-home apartments improves the housing crisis is by supplementing income for current homeowners.

Zoning laws are designed to create uniform and safe areas for people and businesses. For example, they prevent random residential buildings from popping up in industrial areas and vice-versa. They may regulate what type or size of the building is allowed in a particular area, or they can dictate things like density or how much property is needed for each building erected.

In theory, this creates areas of relatively uniform purpose (i.e., residential, industrial, and commercial zones). However, in practice, it can limit the ability of communities to meet the housing needs of growing populations. Consider the following ways that changes to zoning laws can ease the housing crisis many regions face.

Drive New Construction

One significant component of the housing crisis is the lack of residential properties available for sale. This lack of inventory has driven prices to alarming levels, pricing many first-time homebuyers out of the market.

Changes that allow for increased housing density will drive the new construction of residential units. Suppose a good number of these are designed to maximize the number of housing units in each area, either through single-family homes on small lots, attached housing or multi-family units. In that case, that will increase how many families can be housed on a designated amount of land.

Increase Multi-Family and Accessory Units

Leaders in many urban areas find that allowing accessory dwellings on existing lots is an effective strategy for addressing the lack of housing inventory. In addition to increasing residential houses, it also helps make the primary residence more affordable. As a result, many homeowners where accessory units are allowed have opted to take advantage of low rates on streamline refinance loans to add a tiny home or apartment to their property.

Lower Prices by Increasing Density

Photo by Gus Ruballo on Unsplash.

Another side effect of increasing residential density and boosting housing stock is that it helps moderate prices. This is incredibly important since high home prices and rising interest rates have made housing unaffordable for many families. Lower prices can drastically improve conditions and help resolve some of the current housing crisis.

Help Reduce Cost of Ownership Through Rental Income

Another way that allowing accessory units or in-home apartments improves the housing crisis is by supplementing income for current homeowners. This is an especially attractive feature for buyers whose mortgage takes up a large portion of their income. Consider how much more affordable your home would be if you had several hundred dollars extra coming in each month.

Some great programs around the country, including Coram Houses in North Carolina, aim to use accessory suits specifically to address the housing crisis. In this innovative model, homeowners can have a tiny home built on their property at no cost when they agree to use it for affordable housing for a set time.

Allow Redevelopment of Unused Commercial Buildings

Another way that changes to zoning can help ease housing is by allowing residential redevelopment of commercial buildings. For example, there are many areas where industrial plants have closed, leaving behind massive, hulking structures that now resemble tombs. Instead of allowing the decay to spread, rezoning these to residential or mixed-use will enable them to become centerpieces in planned communities. This has proven to be a successful way to revitalize depressed areas without displacing existing residents.


Rising prices, low inventories of homes for sale, and restrictive zoning have combined to create a crisis situation in the U.S. housing market. Changes to zoning regulations could be a possible solution. If planned well, the right changes can help increase housing stock, lower prices, produce supplementary income for existing homeowners and revitalize depressed and abandoned commercial districts.

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