How does Zoning Affect Housing Affordability?
Housing price is determined by multiple factors: the cost of acquiring land, labor, building materials, infrastructure hook-ups, interests on loans, application fees, and compliance with land use regulations. Here we discuss how certain zoning regulations have worked against providing more affordable housing choices in Billings.
The Impact of Zoning on Affordability
Off-Street Parking Minimum Requirements
Off-street parking--such as garages, driveways, surface lots, and multi-level parking structures--is abundant in American cities. Ensuring the availability of on-site parking has been a priority in cities for several decades, driven by the desire to make automotive travel and storage more convenient. While there is still a need to provide parking spaces for customers, residents, and employees, cities are becoming more aware of the financial stress that off-street parking minimum requirements place on affordability.
For more on parking, see our page dedicated to parking here.
Minimum setback requirements are used to ensure an appropriate amount of space exists between the structure(s) on a parcel and the front, side, and rear edges of the property. Setbacks exist to provide a degree of privacy for residential structures, to improve access to the building for emergency services, and to ensure the presence of open space. They are a well-intended form of regulation and can be beneficial for a community; however, too often, setbacks are inappropriately large in proportion to the expected lot and structure sizes.
Maximum Lot Coverage
Maximum lot coverage designates the percentage of lot area that can be occupied by building footprints--anything with a roof. Like the minimum lot area requirement, these regulations can demand a larger lot for a house with a bigger footprint. Say you want to build a house on a 7,000 sf lot in R-70 district. After applying the minimum setbacks and maximum lot coverage, the total build-able area is approximately 2,100 sf.
Some families will want the extra 4,900 sf of space for pavement, yards and gardens. Others will find that to be too much empty space or lawn area they don’t have the time and resources to manage. But the code does not allow a smaller lot or more building. The regulations require a large lot with sizeable open space to build a house in the R-70 zone. Other times, a particular building design may need an adjustment from the required setbacks. The builder can apply for a variance from the minimum setbacks, but this again results in additional fees and delays that get added to the final price of a house.
Minimum lot area
In Billings, the minimum lot area required varies by district and by how many homes are allowed on a lot. Certain zoning districts allow more than one dwelling to exist on a lot, while others don’t. In zoning districts that do allow more than one dwelling on a lot, the minimum lot area required increases along with the number of homes allowed.
At the outset, this sounds reasonable—more space for more families. However, in many cases the minimum lot size required for one dwelling can already easily accommodate a second unit. Take for example, duplexes or 2 dwellings in a Residential-7000 (R-70) zoning district. The R-70 district requires a 7,000 square foot (sf) lot for a single-family house and a 9,600 sf lot for 2 dwellings. This is a low density development pattern for an urban city. Even at the maximum number of dwellings, an R-70 district will never have more than 8 dwellings on an acre. To help you picture an acre of land it is roughly the size of a football field or 1/2 of a city block. Yet, in Billings' First Neighborhoods you will find duplexes built on 7,000 sf lots that seamlessly exist among single-family houses. Requiring a larger lot area for a duplex that can be built on a smaller lot means additional costs for acquiring land, extending water and sewer lines, and constructing streets and sidewalks. All these costs eventually get passed onto renters and homeowners and eventually taxpayers and rate payers. The fewer people using a set amount of water line or sewer line, the more each ratepayer will need to pay to sustain this over-sized utility system.
Single-Family Only Zones: PUD, R-60-R, R-70-R, R96 = 63.7%
Single or Two-Family Zones: R-80, R-70, R-60, R-50 = 29.7%
Multi-Family Zones: RMF & RMF-R = 3.5%
Manufactured Homes: RMH = 3%
Restrictions on housing types
Three zoning districts in the city allow only single-family homes on large lots. Second dwelling units may be allowed on these lots, but the required minimum lot area is then doubled, and the second dwelling cannot be attached to the original home. In 1972, the city re-zoned many existing neighborhoods with two or more attached dwellings to districts that do not allow this use, creating hundreds of lots that even now are burdened with a legal but non-conforming status. Property with a non-conforming status is not easily financed or insured using traditional methods and dis-investment and property neglect is a common problem.
The area bounded by the Rims and Grand Avenue (mostly zoned Residential-9600) and 17th St West, 80% of housing units are considered single family homes. Largely absent of other types of housing such as houses on smaller lots, duplexes, courtyard houses or apartments, the range of affordability and housing choice in this area of Billings is too narrow. Districts that ban more than one dwelling unit on a lot make up 63.7% of the total land area zoned for residential uses within the city limits. That’s a sizeable portion of the city that bans all but one choice for housing--a large home on a large lot.
The storm sewer and arterial roadway construction fees are assessed in Billings by the zone in which the property is located. Residential properties in the First Neighborhoods--where investment is most needed--pay some of the highest fees per square foot for arterial roads and storm water management. The two zone-based fees are assessed on two different sets of expected characteristics for a property.
Rates for storm water fees are determined by the expected lot coverage for the type of land use allowed on the property. A property zoned RMF is assessed at 2 times the rate for single family zoned properties. This is based on the incorrect assumption that a structure built on an RMF-zoned parcel will use a larger percentage of the property than a structure built in a single family zoning district. The higher assessment rate for RMF-zoned properties is justified based on the assumption that higher lot coverage is associated with less permeable surface (material that can absorb/retain water) putting more strain on the storm water management systems.
This fee structure fails to take into account a number of factors that can influence the burden placed on storm sewer systems by the built environment. Low-density properties can have poor storm water management systems just as easily as high-density properties can have excellent ones. In fact, the city's site development policy is to require on-site storm water management for all lots with 3 or more dwelling units, but none for single family or two unit developments. The rate structure does correlate to the actual amount of pavement—just the potential area of building footprint. The presence of permeable surfaces, rainwater collection systems, or retention ponds are not considered in this fee structure, even though they are all useful tools for storm water management and can exist on almost any property type.
The result is a fee structure that discourages the efficient use of urban land, and encourages low-density, sub-urban development. While proper storm water management is indeed crucial, alternate approaches to runoff water management can be used to reduce the burden placed on storm sewer systems by areas with high lot coverage. Still, the fee structure considers only the zoning of a property, and not the strategies being used to manage storm water.
Arterial construction fees are determined by the number of vehicle trips expected to be generated by the allowable land uses of the zone. While it may follow that the land uses which create the most road traffic would have to pay the highest fees, this fee structure calculates traffic generation in only one direction. It determines trip generation by how many vehicles will travel to the parcel, not from it.
For example, a home on a property zoned R-96 (Residential 9,600) will pay some of the lowest road construction fees, because these homes are built in low-density, residential only neighborhoods. Unless a resident lives in one of these R-96 zones, chances are they will never have a reason to enter the neighborhood. Therefore, the fees are low, as the land use in this neighborhood will generate few trips into the subdivision.
This fails to take into account the trips that this type of zoning creates: a large number of car trips originating from these neighborhoods. Because almost all R-96 neighborhoods are not within walking distance of retail, employment, or public transportation amenities, they generate a great number of car trips to other areas of town. In turn, the properties being assessed the lowest fees are using the most roadway miles--an example of how the fee structure's reliance on a misguided conclusion about the zoning of properties can influence a builder's decision to construct in different zones. The rate structure dis-incentivizes infill development, while rewarding construction in low-density subdivisions on the urban periphery.