Small Government Affordable Housing Solutions

Part 1 of 3 of Davenport Institute’s partnership series 

The affordable housing challenge has been at the forefront of both local governments’ and citizens’ concerns as we continue to navigate an economy impacted by an unforeseen pandemic. Across the nation, housing prices have reached record highs making it nearly impossible for many to buy or rent a home. As city governments try to find solutions, communities and community organizations are stepping up to fill the gap. 

National home prices are up 15 percent over the past year, following a trend that has been largely uninterrupted in the last decade. In California, median housing prices have set another record, reaching $798,000 as of October—a 12 percent increase from a year ago. That coupled with developers not being able to keep up with job growth has led to an affordable housing shortage and soaring real estate prices.

Now there are a variety of solutions on the proverbial table. Local governments are working day and night to find ways to make subsidized affordable housing happen. Cities are also trying to reform zoning laws and building regulations to allow for more [and cheaper] housing. However, these solutions come with their own costs. Subsidized housing shifts the tax burden onto those who do not benefit from the new housing. Changing zoning laws may be necessary, but can lead to conflicts with commercial, recreational, or environmental priorities. 

As governments and developers remain at odds, churches have stepped up to fill the void in many cities. The City of San Diego adopted a program called “Yes In God’s Back Yard” or “YIGBY” to partner with local churches in providing housing on their property. “Churches in our community want to be a part of the solution when it comes to the housing crisis,” said Pastor Dr. Gerald Brown. “This important reform allows us to continue serving our communities in the best way possible while providing the affordable housing that is so desperately needed.”

The YIGBY program inspired state legislation in the form of Assembly Bill 1851, which “seeks to remove barriers to developing affordable housing on property owned by religious institutions by allowing developers to reduce the number of religious-use parking spaces.” The City of San Jose may soon be following suit, as local officials and faith leaders have expressed interest in embracing a similar approach.

Based on the magnitude of the challenge, some skeptics assert that relying on voluntary efforts—such as those led by religious institutions—is insufficient. Maybe they are correct. California alone has set a lofty goal of constructing 3.5 million new housing units by 2025. Setting aside the likelihood of that development coming to fruition, perhaps the answer lies in local governments giving community organizations the freedom to move ahead.

Following San Diego’s lead, this type of partnership can be beneficial for several reasons. (1) It is an incremental improvement that provides housing options in the very near future for those who (a) can’t wait years for massive projects to be delivered or (b) won’t be able to afford the new housing. (2) It brings communities together as community members see their local churches and government officials collaborating and finding creative solutions. As a result, not only does new, lower-cost housing become available to low-income residents, but social cohesion and trust are built—which serves the community as a whole.

Constructing new housing that meets rapidly growing demand is a unique and difficult challenge. From rising supply chain costs (e.g. lumber, steel, transportation), zoning restrictions, and environmental concerns, massive development projects are not an easy endeavor. However, the ability and willingness of local governments to let faith-based organizations address complex problems is a welcome sign moving forward.