Lessons Learned: Local Markets Matter

New development outside Colorado Springs, CO

This is kind of a “Duh” sort of lesson, but every community we visited was its own unique case of why local housing markets matter.  Even between communities that had tight housing markets, the conditions that create an affordability squeeze aren’t the same.

Take Chapel Hill, NC.  Their affordability problem is part extremely desirable location, part cost of living, part local development regulations.  Head across the country to Williams, AZ, there’s a similar affordability pinch.  But there, a lack of developable land is a major factor – a enormous chunk of the American Southwest is owned by state and federal governments (i.e. National Parks, Bureau of Land Management, etc.).

Why does this matter?  The challenges to affordability are vital parts of any affordability solution.  In Chapel Hill, it’s expensive to develop any property within city limits because of local government regulations, so the solution might be developing on the outskirts.  In the Southwest, where there might be a scarcity of land to develop, the future value of land must be considered.  Even if you build an affordable home, the land underneath it can change dramatically.

This is also a lesson for local governments.  Through development regulation, zoning, and partnerships with nonprofits, localities play an enormous role in creating conditions that influence affordability.  Recognizing how affordability is challenged in your own community is an important step in developing any long-term plan for affordable housing.

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