The U.S. needs more rental housing but developers can’t keep up, and there’s a new survey that shows exactly what it is that’s impeding them. According to this survey by the National Apartment Association, there are several barriers to apartment construction but the one that stands out the most is coming from local residents, or NIMBYs — which stands for “Not in My Backyard.”
Demand for rentals has mushroomed in the last ten years with almost 20 million additional renters across the nation. That demand has driven rents higher, and shoved the issue of affordable housing into the spotlight. It’s one of the main reasons that so many cities are debating rent control — to protect tenants who can’t keep up with their housing expenses. But, rent control is not a long-term solution for high housing costs. It will put landlords out of business, and ultimately, reduce the supply of rentals, which will, in turn, increase demand and push rents even higher.
This new study, called “U.S. Barriers to Apartment Construction,” looks at the issue at the metro level nationwide. (1) It includes responses from private real estate companies that deal with multi-families, local government officials, and non-profit organizations. The results show that markets can vary significantly and that demand and growth projections reflect those differences. Among the factors that have an impact on these projections are income levels, population growth, land availability and the balance between supply and demand.
Rental Demand Outweighs Supply
Currently, the demand side is tipping the scale and pushing rents higher. Statistics show, about one third of rental households are spending more than a third of their income on rent and almost a quarter of U.S. renters are spending at least half of their income on rent. The situation is much worse in some states like California, New York, and Hawaii.
Yes, rentals are badly needed, but there are big barriers to the construction of new units. Overall results from the survey show that almost half of the survey respondents from the private sector find it fairly to extremely difficult to get approval for new multi-family projects.
Community Opposition or NIMBYism
When asked about the biggest barriers to apartment construction, the most common response was community opposition or NIMBYism. Construction costs, land prices, and land availability were next. Other issues include density and growth restrictions, complex approval systems connected to affordable housing policies and requirements, infrastructure considerations, environmental restrictions, and the length of time it takes to finish a project.
40% of the respondents find it fairly to extremely difficult to get approval for new multi-family projects. 31% were neutral on that process. 29% said it’s easy.
The report cited an article posted in The Stranger out of Seattle, back in 2013, as an example of the kind of NIMBYism that’s getting in the way of apartment development. It was called, “The Fight Against Small Apartments” by Dominic Holden. He wrote about a project that consisted of about four dozen micro-units. The project was approved as a cluster of six townhomes, but neighbors were not happy to hear the details. Each townhome consisted of eight tiny units measuring 150 to 250 square feet that could be rented individually. They each had a private bathroom and kitchenette with access to a full-sized kitchen. Rent was about $500 a month including utilities and WIFI. One neighbor expressed his concern saying, “I think this is going to be a magnet for very sketchy people.” He said, “Anyone who can scrape up enough money to live month-to-month can live there.” He wanted to sell his home but he was worried that buyers wouldn’t want to live next to what he called a boarding house.
Common Complaints Among NIMBYs
The researchers say they hear similar stories from people around the country. The most common complaints were about traffic, child safety issues, and parking. Other issues include the impact on property values, a potential increase in crime, the capacity of school systems, local infrastructure concerns, and the water supply.
They say the complaints are pretty much the same as they have been for decades. But there is one big difference. They say it has become much easier to use political pressure to stop a project. That’s likely due to the use of the internet and the ability of people to band together.
NAA president and CEO, Robert Pinnegar, says the NAA “undertook this survey to show that barriers create higher construction costs, which in turn leads to higher rents while making it extremely difficult to build affordable housing.” (2) He says, this report “shows that housing, ultimately, is a local issue requiring local government solutions. Reducing burdensome regulations and standing up to NIMBYism will allow for more construction.”
How much more? The report says we need 4.6 million more apartment units by the year 2030 to keep up with “current demand.” Pinnegar says, “As cities and states look for solutions, we encourage policymakers to engage all stakeholders, including property owners, to create workable solutions that best serve their community.”
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