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As rents soar, states take aim at local zoning laws

Local officials, however, say they should decide what gets built where

Caitlyn Mann, 29, moved to the Phoenix metro area from Boston in January 2021 after taking a job as a Maricopa County court clerk. She found a studio apartment downtown and signed a 14-month lease for $1,295 a month. In January, when she tried to renew her contract, the landlord said her rent would be $1,600.

“I was shocked,” Mann said. “I don’t understand why my rent went up so much in just one year.”

In 2021, U.S. rents rose faster over the previous year than they have in the past 20 years, leaving many low- and medium-income renters priced out of their homes. Last month, rents were 17.6% higher than they were in February 2021, according to the online rental marketplace Apartment List, which tracks rental properties across the country.

In the Phoenix metro area, rents have increased 27% since last February and are up 33% since the beginning of the coronavirus pandemic in March 2020. Only Miami, Tampa and Orlando in Florida have experienced faster rent growth in the past year, and only Tampa’s rents have risen more since the pandemic started.

One solution, many think, is to build more housing. To advance that goal, state lawmakers in Arizona, Maine, Maryland, Massachusetts and North Carolina are taking aim at what many say is a major impediment to new construction: restrictive local zoning, including prohibitions on multifamily dwellings, limits on the heights of buildings and minimum lot-size and square-footage requirements.

Many residents of areas zoned for single-family homes worry that introducing apartments will change the character of their neighborhoods, reduce property values and increase traffic and parking woes. And local officials say they should decide what gets built where.

But critics of the current system say overly strict zoning prevents builders from constructing homes that average people can afford.

They also blame zoning for promoting racial segregation: Beginning early in the 20th century, communities used single-family zoning to keep lower-income Black people, who often could not afford detached single-family homes, out of middle-class White neighborhoods.

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In proposing to give states more control over what has long been a local prerogative, the state legislators hope to follow the lead of Oregon, where a law enacted in 2019 requires most cities with populations over 1,000 to allow duplexes in areas previously zoned for single-family homes. Cities with more than 25,000 residents also must allow townhouses, triplexes and fourplexes.

Last fall, California Democratic Gov. Gavin Newsom signed a bill allowing property owners to add a second housing unit to a single-family lot (including splitting an existing home into two units) or split the lot in two and place duplexes on each one.  The latter option would create four units on property currently limited to one single-family house. But opponents have vowed to reverse the law through a ballot initiative, and more sweeping bills to override local control over zoning in California have foundered in recent years.

Fast growth in Phoenix

The ongoing debate over a far-reaching Arizona bill demonstrates how contentious the zoning issue can be.

Phoenix added more than 230,000 new residents between 2010 and 2020, making it one of the fastest-growing cities in the nation, according to U.S. Census Bureau data.

At the same time, the number of low-rent units in Arizona has declined precipitously. Between 2011-2019, the state lost nearly half of its units renting for $600 or less per month, according to the annual America’s Rental Housing 2022 report from the Joint Center for Housing Studies at Harvard University.

The general rule of thumb is that a household should spend no more than 30% of its gross income on housing costs, including utilities. Based on that standard, $600 is the maximum affordable rent for a household making $24,000 per year or less.

Nearly 12.7 million households nationwide, or close to 30% of all renter households, fall into that category, according to Daniel McCue, senior research associate at the center.

“People think that if you can't afford a unit here, you should go somewhere else where you can afford it,” said McCue. “But there's fewer and fewer places where a low-income renter or even a moderate-income renter could afford.”

To address the shortage of affordable housing in Arizona, two state representatives last month proposed a bill that would override some local zoning rules, replacing them with less stringent state ones.

Under the original bill introduced by Democratic state Rep. César Chávez and Republican state Rep. Steve Kaiser, any land zoned for agriculture or single-family homes could be used to build up to eight single-family homes or a dozen duplexes per acre. Land zoned for agriculture or multifamily housing could be used to construct apartment or condo buildings four stories or taller.

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Supporters noted that the legislation wouldn’t override existing deed or covenant restrictions, which would violate the Arizona Constitution. That means the proposed changes would exclude the most expensive subdivisions, which have their own density and design requirements and restrictions.

“We have a massive supply problem in housing,” Kaiser said in an interview. “The problem exists at the local city level with over-regulation on building.”

The apartment industry welcomed the legislation.

“At the local level, we need cities and towns to join the rest of us who see building more housing at all price points as mission critical,” Courtney Gilstrap LeVinus, president and chief executive officer of the Arizona Multihousing Association, wrote in an email. “The 270,000 new homes and apartments [the Arizona Department of Housing] says the state needs won’t happen by magic.”

But local officials fiercely oppose the idea of handing over development authority to the state.

René Guillen, deputy director of the League of Arizona Cities and Towns, described the bill in a statement to Stateline as the most aggressive and restrictive zoning preemptions in the country.

"We are very concerned about legislation that removes decision-making from local elected leaders and their ability to ensure that development fits the needs of the community' and surrounding residents," Guillen wrote.

Less than two weeks after introducing their bill, the vehemence of the opposition persuaded Chávez and Kaiser to completely rewrite it. Guillen said the league supports the amended version, which only establishes a committee to study the state’s housing supply.

“I could’ve just let the bill die and walked away from it, but I feel very strongly about this problem. My biggest fear is that I’ll be priced out of being able to live in Phoenix,” said Kaiser, who owns a small junk removal business.

On Monday, Kaiser said he’s back to square one in trying to find a solution to Arizona’s housing problem, and that he’s not wedded to a significant zoning shift like the one in his original bill.

Strong opposition from local officials also stalled a similar bill in North Carolina. That legislation, also proposed by a bipartisan group of lawmakers, would require municipalities to allow duplexes, triplexes, quadplexes and townhomes in any residential zoning district with water and sewer services.

A narrower approach

The North Carolina bill also would allow homeowners to build and rent out an “accessory dwelling unit,” such as an in-law apartment or backyard cottage. Connecticut Gov. Ned Lamont signed a law last June legalizing accessory dwelling units.

But in other states, even that narrower zoning change has provoked strong opposition.

In New York, for example, Democratic Gov. Kathy Hochul in January proposed a five-year, $25 billion plan requiring local governments to change zoning to allow accessory apartments. But Hochul backtracked after local officials and state lawmakers from suburban areas said the plan would lead to overcrowding and destroy the character of suburban neighborhoods.  

“[It’s a] direct threat to local control. This is the state telling local governments ‘You will allow this—you have no choice.’ We reject that,” Republican state Assemblyman Mike Fitzpatrick said in a statement reported by radio station WSHU.

Fitzpatrick also called Hochul’s plan a “direct threat to the suburban quality of life.”

“Rather than solve those problems in the city, they want to exploit those problems out to the suburbs,” Fitzpatrick said.

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In Maryland, Democratic state Del. Lisa Belcastro introduced a bill last month that would require municipalities to allow accessory dwelling units. “If this bill were to pass, it would be our homeowners and each of our communities that would have the opportunity to play a role in addressing our housing shortage,” Belcastro said during a hearing earlier this month.

But Angelica Bailey, director of government relations for the Maryland Municipal League, which represents 157 municipal governments across the state, described the bill as an attack on local authority.

“We're on the ground,; we know our communities; we have the knowledge to make those decisions. And a lot of that knowledge comes from long-term planning,” Bailey said during the hearing. “This bill would just wipe that all away.”

Stateline is a nonpartisan, nonprofit news service of the Pew Charitable Trusts that provides daily reporting and analysis on trends in state policy.

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In 2021, U.S. rents rose faster than they have in the past 20 years, prompting state lawmakers in some states to propose measures that would override local zoning laws and free up land for more housing.

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