Local Resistance Exacerbates US Housing Shortage

 By Vanguard Staff

Dylan Matthews at Vox reports that the fractured nature of American government has created a major obstacle to solving the nation’s housing crisis. With decision-making divided among states, counties, cities, and neighborhood-level entities, new housing projects are often blocked at the level where opposition is strongest.

Local residents, more focused on issues such as traffic, parking, and noise than on long-term economic health or regional affordability, have frequently exercised disproportionate sway. Matthews calls this diffusion of responsibility a “disaster for housing in the US.”

A key example of this dynamic is “aldermanic privilege” in cities like Chicago and New York, where city council members effectively hold veto power over development in their districts. In practice, Matthews explains, this empowers local interests that care more about preserving neighborhood conditions than ensuring broader access to affordable housing. New York Mayor Eric Adams has introduced ballot measures aimed at weakening this privilege, but the proposals have already triggered resistance from the city council.

Because local resistance is so entrenched, states have stepped in to advance reforms. In 2019, Oregon’s then-House Speaker Tina Kotek, now governor, championed a bill requiring large cities to allow at least two housing units on every lot, effectively abolishing single-family zoning.

In California, Sen. Scott Wiener has had a series of wins with statewide housing legislation. His most recent victory was the passage of SB 79, which legalizes six-story apartment buildings near transit.

The bill still awaits Gov. Gavin Newsom’s signature, but it represents one of the most aggressive state-level interventions in local land-use rules. Massachusetts, Washington, Florida, Texas, and Montana have also adopted state preemption measures that override local restrictions.

Even so, state-level efforts face substantial political headwinds. In New York, Gov. Kathy Hochul in 2023 retreated from an ambitious plan to upzone enough to allow 800,000 new homes after encountering overwhelming opposition from suburban communities. Observers saw the move as a concession to preserve Democratic support in swing House districts.

In Arizona, Gov. Katie Hobbs vetoed a less ambitious reform proposal, citing “unintended consequences.” These setbacks underscore the political limits of state-level housing reform, even when legislators and governors acknowledge the severity of the crisis.

This has led to growing calls for federal action. The federal government already has experience preempting local rules in other sectors, including energy pipelines under the Natural Gas Act of 1938 and cell tower siting through the Federal Communications Commission. Matthews notes that while outright preemption of local zoning laws by Congress is unlikely, Washington has other tools, particularly grants and incentives, to encourage municipalities to adopt pro-housing reforms.

The most significant federal initiative now under discussion is the ROAD to Housing Act, co-sponsored by Senate Banking Committee Chair Tim Scott and ranking member Elizabeth Warren.

The bill has drawn attention not only for its bipartisan leadership but also for its unanimous committee passage in July. Typically, bills with unanimous support are modest in scope, and Matthews acknowledges his initial skepticism.

The measure contains provisions such as eliminating the “chassis requirement” that has slowed factory-built housing, and directing the Department of Housing and Urban Development to provide technical assistance to states.

But the ROAD to Housing Act also introduces a framework that experts believe could reshape how the federal government influences housing.

The Economic Innovation Group, a Washington-based think tank, highlights two particularly important features.

First, the act directs the federal government to create model zoning codes for urban, suburban, and rural municipalities. These model codes include provisions such as eliminating mandatory parking requirements, lowering minimum lot sizes, and permitting multi-unit buildings in areas historically limited to single-family homes.

Second, the bill creates financial incentives for cities to expand housing supply. Its Innovation Fund would distribute about $200 million annually to jurisdictions that reform zoning and accelerate construction.

Another measure, the Build Now Act, would redirect some Community Development Block Grant funds from high-cost areas that fail to build enough housing to those that are meeting demand.

EIG researchers Jess Remington, Adam Ozimek, and Carol Neuhardt argue these steps could evolve into a bold framework for what they call “Right-to-Build Zones.” Under this idea, cities could choose to apply federal model zoning codes to specific neighborhoods rather than across an entire jurisdiction.

In exchange, they would receive direct federal payments for every new unit built under the code. Matthews describes the approach as a way to cut through the tangle of conflicting rules across different levels of government while limiting the scale of reforms to minimize backlash.

Ozimek compares the proposal to China’s special economic zones, which in the 1980s allowed small areas to experiment with freer economic rules, eventually catalyzing nationwide growth.

By concentrating pro-housing reforms in designated zones, U.S. cities could spur construction where it is most viable and politically acceptable, while gradually normalizing reforms that could later expand more broadly.

Matthews notes that the current bill does not go as far as explicitly tying incentives to adoption of model zoning codes, which EIG believes would strengthen the approach. But the legislation does lay the groundwork for experimentation at a federal level, something housing policy has largely lacked.

“Maybe the unobjectionable bill that every senator likes has some teeth after all,” Matthews writes.

The ROAD to Housing Act remains a modest step compared to the scale of the crisis. Yet its unanimous support in a polarized Senate and its embrace of federal incentives for zoning reform mark a significant shift.

As Matthews observes, the measure may prove more consequential than it first appears, potentially opening the door to a new federal role in solving the housing shortage.

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