Commentary: Reforming Minimum & Maximum Mandates

In city halls and state capitols where housing reforms are on the cusp of being enacted, debates can get contentious over seemingly innocuous figures, such as mandates managing the minimum or maximum requirement of specific policies.

These debates can become heated, filled with fearful rhetoric leaving one to believe the future of the status quo is at stake.

That’s because it is.

What the public perceives as second-tier planning and zoning matters – parking, setbacks, unit size, etc. – are where housing affordability is gained or lost.

You see, the devil is in the details. Land developers, planners, and local officials understand this all too well.

Mandates on Minimums and Maximums

Critical to this conversation are two definitions: minimum and maximum, and their relation to policies that mandate so-called “community character.

  • Minimum: the least or smallest amount or quantity possible, attainable, or required.
  • Maximum: the greatest or highest amount possible or attained.

These mandates can and do have a profound and immediate impact on both housing affordability and inventory. Some, like luxury design standards and aesthetic mandates, increase housing costs, placing housing further out of reach for both buyers and renters. Policies like Floor Area Ratios (FAR) may limit additional housing units or block them altogether. Others, like setbacks, lot size, and parking mandates can do both.

It is this function that simultaneously impacts the cost of new housing and the number of units that place these policies at the center of the housing reform debate.

When set too high, minimums raise the floor, decreasing housing production and pricing homebuyers and renters out of the market. Oftentimes, this is accomplished by taking what would be considered to be a premium option or upgrade and placing that as the community’s minimum allowed requirement.

Setbacks, lot sizes, garage and parking mandates, square footage requirements, and aesthetic mandate policies will each individually raise the floor from the needed new starter homes many markets lack to move-up homes that are out of reach for the average buyer in the community. If this sounds familiar, it’s because it is classic socio-economic outcomes found in fiscal zoning.

It can happen with maximums as well. Maximums set too low lower the ceiling on what is possible. Take impervious surface mandates that when set too low reduce the buildable space on a lot.

Compounding the Problem

The impact of minimums and maximums can be compounded when these policies are laid over one another.

Requiring a three-car garage adds both to the cost of the home, but also requires a larger lot relative to requiring a two-car garage. If this same community employs elevation design requirements dictating that a garage cannot take up more than a certain percent of a home’s front elevation, a three-car garage requirement will then require the front of the home to be wider and/or taller. And if the minimum side setbacks are set too high, the minimum required lot will need to be wider still.

Here, three minimums set too high, have added cost and reduced density. Replicate this loss of density across an entire development, and there will be a noticeable decrease in the number of units built.  

Add impervious surface requirements on top of that. If set too low, this requirement will further increase the size of the low, thereby further reducing inventory and affordability.  

Ending Unfunded Minimum and Maximum Mandates

The irony of these local requirements is that often they are unfunded mandates placed upon would-be buyers and renters. Local governments, who are ready to oppose state-imposed unfunded mandates on local units of government, are largely more than willing to impose unfunded mandates upon new nameless, faceless future residents.

Several approaches exist to serve as remedies to this problem.

The simplest, and most controversial, is to eliminate these mandates when they are both optional (such as parking, lot size, design standards, aesthetic requirements, FAR and square footage requirements) and lack any rational basis.

Of course, some policies are not as easy to eliminate. When this is the case, a simple remedy exists. Simply flip the script. At the end of the day, our maximums are set too low and our minimums are set too high. Lowering our minimums and raising our maximums will enable the free market to deliver more housing at more affordable price points.

This isn’t about lowering the floor or raising the ceiling, it is about moving toward developing a framework in which policies are not used to negatively impact housing affordability or needed production.

Nick Erickson is the executive director of Housing Affordability Insitute.