Thank you for giving me an opportunity to provide comments on this important topic. My name is Marcel Negret, I am a Senior Planner with the Regional Plan Association (RPA). RPA is a not-for-profit research, planning, and advocacy organization that has served the New York metropolitan region for nearly a century.
More than half of homes in the United States are currently selling above list price. The Case-Shiller US National Home Price Index has been steadily increasing over the past decade and has been growing even more rapidly throughout the pandemic.
The housing market of the tri-state region has experienced similar patterns. Throughout the previous decade and leading up to the pandemic, suburbs were building less housing, especially in southwestern Connecticut, Long Island, and the Hudson Valley. These places were also accommodating less of the metro area’s overall population, economic, and housing growth.
By the end of 2020, housing sales (a proxy for demand) in these areas accelerated sharply, prices were higher, and inventory was down year on year. Long Island and Southwestern Connecticut in particular, saw the greatest correlation in the region between a decreasing inventory, increasing sales, and a growing median list price.
With less new construction, and now a decreasing supply of available housing for purchase, these suburban areas are less well equipped to accommodate current increases in demand. This is, in turn, exacerbating regional housing pressures and heightening the housing affordability crisis with disparate effects.
The tri-state region is one of the most segregated parts of the United States and has some of the highest levels of income inequality. This is the result of accumulated policy decisions over multiple generations that made segregation legal and allowed market forces to produce segregated city neighborhoods and suburbs. Federal policies pre and post-WWII influenced financial systems, and local approaches to land use control show us how segregation proliferated and later normalized within our region.
We must learn from these past choices and do better. Government action can help ensure that neighborhoods are healthier, socially integrated, more prosperous—as well as affordable. A key to achieving all of this is to incentivize a greater range of housing choices.
Last year RPA released an analysis showing that New York, New Jersey, and Connecticut policymakers could help create hundreds of thousands of new homes by providing a regulatory framework for adding more units to some of the region’s nearly four million large single-family houses.
The report, entitled Be My Neighbor: Untapped Housing Solutions — ADUs and Conversions, estimated that 500,000 new homes, including 100,000 in New York City, can be created at a low cost if state and city governments allow ADUs and develop the appropriate balance of incentives for large single- and two-family houses to include additional units. If done properly, half of these new units would be near transit with easy access to jobs and business centers.
More recently we released a follow-up report where we found that municipalities in Fairfield County, Connecticut could help create 40,000 new homes by 2040 and through the use of these same housing typologies.
In these reports, we highlighted the importance of incentivizing ADUs and conversions through New York, New Jersey, and Connecticut state legislation. We emphasized the importance of each State to establish policies that specify the rights of owners, provide guidelines for the creation of new housing units, and give financial and technical assistance to municipalities.
Perhaps most importantly to today’s listening session, we also highlighted the need for developing technical assistance, financing, and information programs. With support from the Federal government, the States, regional and local governments can create programs that provide assistance for constructing ADUs and making conversions by offering guidance, simplifying technical language, and streamlining approvals. These entities should also prioritize statewide financing programs, especially to assist senior citizens and low-moderate income households.
Together with our coalition partners, these recommendations have helped shape policy within the region. Earlier this summer in Connecticut, Governor Ned Lamont legalized ADUs statewide (HB 6107). Last year New York State introduced a bill that would go beyond legalizing ADUs statewide and would offer technical and financial assistance: New York State Accessory Homes Enabling Act.
The recent passage of legislation in Connecticut and the introduction of this bill in New York State demonstrates the growing recognition of the need to incentivize more housing choices in the region and the role that policy must play in facilitating social and economic benefits.
While these are certainly positive steps, there is a lot more that needs to be done, particularly when defining the technical assistance, financing, and information programs that will determine the degree to which these policies meet their stated goals.
The recently announced federal agency policies are more than welcome. In particular, those that will create new funding mechanisms and leverage federal funding to spur state and local actions. These are profoundly aligned with RPA’s recommendations.
The Federal government must ensure that expansions made to financing through Freddie Mac, as well as updates to Fannie Mae’s and the Federal Housing Administration’s (FHA) existing policies, are set up to support the creation of ADUs and conversions, and in coordination with State and local governments.
Equally important will be how the government agencies leverage federal funding to spur state and local action and promote comprehensive planning. HUD’s block grant funding and the support provided by the Office of Community Planning and Development will be key to addressing these issues. Together these can support the needed planning to build new and rebuild the existing infrastructure that will help ensure that entire neighborhoods - including ADUs - are safer, healthier, and more prosperous.
