Event: How to Increase the Production of Mixed-Income Development

A recent forum brought together the Nashville housing industry to discuss mixed-income development as one approach to addressing the growing need for affordable housing. The Mayor's Office convened the forum as a follow-up to the release of its housing plan, and the Federal Reserve Bank of Atlanta's Community and Economic Development group provided a summary of work on this topic.

Affordable housing issues in Nashville are evident in the data. Between 2010 and 2014, the number of units of low-cost rental housing available for $750 per month declined precipitously, according to an Atlanta Fed discussion paper. The majority of renter households in Nashville are deemed cost-burdened, which means that over 30 percent of their monthly income is associated with housing costs. Housing challenges are exacerbated by the fact that the national median income has been declining or stagnant in real dollars since before the recession, despite modest increases in the past two years.

The forum featured remarks from Atlanta Fed visiting scholar and national housing expert Renée Lewis Glover. Glover and her coauthor, the Atlanta Fed's Ann Carpenter, also shared results and findings from a recent paper on how to foster the production of mixed-income housing and communities in this current environment in which federal subsidies have decreased and, in many cases, the costs of development have increased. Glover and Carpenter interviewed stakeholders in Nashville, Atlanta, and Jacksonville to determine the most significant barriers to development and recommendations to overcome those barriers.

Glover and Carpenter cited the many benefits of mixed-income development, including de-concentration of poverty, social capital, improved physical and mental health outcomes, improved school performance, lower rates of crime, and access to more robust amenities and services.

Yet, mixed-income housing can be difficult to develop, according to their research. The findings indicate three primary barriers to mixed-income development across the three cities selected:

  • The high cost of land, though labor may be outpacing that now based on recent interviews
  • Regulatory burden and local land use restrictions
  • Lack of interagency coordination.

The research also focused on solutions to these challenges. For example, interviewees cited approaches such as limiting exclusionary land use regulations, implementing land banking and community land trusts, and using donated land to address the high cost of land. To address regulatory burden and interagency coordination, interviewees proposed allowing more flexibility in the use of funds, and streamlining application, reporting, and monitoring requirements across agencies. Other ideas included more advocacy for federal and state tax credits for affordable housing investments and the creation of dedicated state and local housing trust funds.

Glover encouraged the group to think about coming together with atypical sectors to bring housing, workforce, health, and education policymaking together, as there are linkages among each area. Glover noted that there are often budgetary implications of ineffective local policy and encouraged the group to consider the costs of inaction or delayed action in this area. She also noted that attendees could see the adoption of a form-based code as a creative way to encourage and codify mixed-income development. She also underscored the need to harmonize the regulatory environment, with a particular emphasis on local and state actors coming together to this end.

The discussion that followed the presentation focused on several key topics, including local solutions for high land costs and how to overcome the fear of change and not in my back yard (NIMBY) thinking that exists around this topic. Adriane Harris, director of the Mayor's Office of Housing, noted that the metropolitan government has donated over 40 properties for single-family and rental development through the Barnes Trust Fund. Glover suggested that metro government should consider assembling parcels prior to putting transit infrastructure in place, since that will likely drive up property values.

In speaking about the NIMBY-ism concerns, Carpenter said the data can support the discussions at the community level. Glover also emphasized engaging the community early in preplanning stages of the project and maintaining that engagement throughout the project life cycle.

The link between housing and transportation was a common discussion topic. Carpenter has conducted some research on the jobs-housing spatial mismatch problem in Atlanta. In that research, she found that job centers for low- and moderate-skilled workers are often distant from home and transit is lacking to and from those areas. She also noted that certain studies of transit-oriented development have shown that when fixed rail stations are built, displacement may occur as property values increase. She noted that a sizable number of units kept affordable for a long duration are more likely to be effective in maintaining a mixed-income, equitable, and transit-oriented community.