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Study Finds NIMBYism, Construction Costs Largest Barriers To New Housing

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Study Finds NIMBYism, Construction Costs Largest Barriers To New Housing

At its heart, the problem is simply supply and demand: The cost of housing won’t go down until there is more housing.

But building new housing is becoming more expensive and more rigorous every day. As the need for affordable housing grows, land and labor prices are shooting up. Community resistance is calcifying, making it harder than ever to build the dense residences that are the best solution to the housing shortage.

The National Apartment Association’s Barriers to Apartment Construction report studied 58 U.S. metropolitan areas and ranked them on how difficult it is to construct multifamily buildings in each market.

“There are so many factors at play,” said Paula Munger, AVP of industry research and analysis at NAA, who spearheaded the new report. “We have to keep the conversation going on affordable housing, and make sure everyone understands the complexity involved.”

Perhaps the most surprising result of the report was the extent to which community involvement slows down construction. Public outcry and NIMBYism consistently outranked almost all other barriers to construction in NAA’s index, and in a qualitative survey of public officials, it ranked as the top barrier to construction.

The markets that ranked as easiest to build in are midsized cities with few density and growth restrictions. Topping the list was Albuquerque, New Mexico, followed by Greenwood, South Carolina, and Dayton, Ohio. 

Study Finds NIMBYism, Construction Costs Largest Barriers To New Housing
Albuquerque, New Mexico, was ranked by NAA as the market with the fewest barriers to apartment construction

The highest-ranked major markets were Great Lakes cities like Cleveland, Milwaukee and Chicago, as well as the Texas hubs of Dallas and Houston. 

At the bottom of the rankings, not unexpectedly, were California cities like San Jose, Sacramento and San Francisco, which suffer from low land availability, long approval timelines and high levels of community resistance. 

Also ranking very low were Honolulu and Philadelphia, whose regulatory processes were among the most complex nationwide.

Many of the nation’s largest markets, including Washington, D.C., New York, Los Angeles and Boston, ranked just above the California markets. One surprise was Seattle, which despite having very low land availability, ranked 15th thanks to relatively low levels of bureaucratic complexity. 

Simplifying zoning laws and eliminating bureaucracy from the entitlements and approvals process can go a long way toward speeding up housing construction. Developers that are dealing with an unpredictable bureaucratic schedule may not be able to line up funding or reliably bring on partners like an architect or contractor.

“Red tape makes everything take longer,” Munger said. “When you don’t know how long everything will take, it makes it much harder to plan, and there are many markets where that strongly impacts development.”

When it came to the qualitative responses, community resistance was on most respondents’ minds. Private developers ranked NIMBYism as the second-largest barrier to construction, after rising construction costs. Public officials and nonprofit employees ranked NIMBYism first, followed by land availability and land cost.

Study Finds NIMBYism, Construction Costs Largest Barriers To New Housing
San Jose, Calif., was ranked by NAA as the market with the highest barriers to apartment construction.

To a certain extent, these rankings reflect each group’s daily work: Developers are more concerned with making construction pencil out, while public officials consistently face off with groups of residents fuming over new apartments.

But it should also suggest to developers that public officials are more on their side than they think.

“Both sides recognize there’s a problem,” Munger said. “They may be able to get more housing built at all price points through public-private partnerships.”

Many of the barriers to construction could be overcome by expanding rules-based zoning laws. Some cities are experimenting with a “fast lane” for development that speeds necessary housing projects through approvals, reducing community resistance. 

But Munger said she received a response from an official who works in one such fast-track program: The fast track, she explained, still isn’t fast enough.

The big question now is whether groups like the NAA can convince legislators and, more importantly, residents that breaking down the barriers to development is the best way to save their cities.

“We are trying to put the report in the hands of policymakers so they can work to educate the public,” Munger said. “Once you see why this kind of development takes so long, you start to see why housing costs are getting higher.”

This feature was produced in collaboration between Bisnow Branded Content and the National Apartment Association. Bisnow news staff was not involved in the production of this content.