Paths of Greater Resistance

Westerbeck%252BProject 3

At the top of Kronberg’s policy wish list for Atlanta is the legalization of fee-simple ADUs, meaning that an accessory dwelling unit and the land it’s on could be bought and sold separately from the main house, without a complicated condo arrangement. This would allow infill developers to “feed banks what they eat,” Kronberg says. Major banks know how to issue a mortgage for a standalone structure which will have one owner. They can do that all day. Appraisers also know how to value such a structure for financing. Their lack of familiarity with missing-middle housing forms that are scarce in a mostly-suburban city like Atlanta is a huge obstacle in Kronberg’s view. “I don’t know how to fix appraisers. I know how to feed them what they eat.”

Kronberg’s path of marginally less bureaucratic resistance is also a path of greater political acceptance. The public is far less wary of ADUs, which have a wholesome image (think “granny flats”), and thus ADUs become a backdoor to a conversation about lot sizes or duplexes.

The state of California has caught on to this. The most noteworthy aspect of the recently passed statewide abolition of single-family zoning, Senate Bill 9, is its lot-split provisions, which allow a small developer to divide virtually any single-family lot into two, and put two homes on each.

Will it be a game changer? That remains to be seen, but refreshingly, this is a regulatory reform aimed at enabling something the “hacker” developers have already figured out.

Where Do We Start With Reform?

So many different policies conspire to raise the cost and difficulty of small development that we’re unlikely to cut this Gordian knot any time soon. But we can and must make meaningful improvements from the policy side.

The “hacking” approach to small-scale development will likely never scale to a large number of builders, and it has massive costs. It deters many people from attempting incremental development at all, adds cost, and causes projects to never see the light of day. Or, as with Westerbeck’s fourplex that could have been a 16-plex, it causes them to be deeply compromised, ultimately delivering less benefit to the community. Less affordability, less compatibility, a less ideal space or worse urban design—any or all of these things can be casualties.

I asked every developer I interviewed for their policy reform “wish list,” and the lifting of parking requirements was almost universally mentioned. Beyond that, many cited reforms to single-family zoning, allowing more density appropriate for an urban context. Others mentioned flexibility on issues such as setbacks that can make or break the geometry of fitting a project on a lot. The overall recurring theme was that small developers want simplicity, and they want flexibility. Each site is unique, each project is unique, and it should be legal without so much red tape to design a project around those hyper-specific, local requirements.

(Every developer I spoke with also cited financing barriers, and wanted greater flexibility from banks with loan products for creative projects or unorthodox building types. We’ll talk more about banks in Part 4.)

With certain building code features and with municipal requirements such as stormwater, the best way forward might be strategic relaxation of some requirements tied to project size, to let small things go forward with less red tape than big things.

When it comes to zoning codes, there are two “big bads” that stand out in their ubiquitous, destructive impact on the viability of incremental development. They are exclusive single-family zoning (i.e., apartment bans), and mandatory parking minimums. These should go away. Everywhere. Yet we must recognize that that is a start, not an end goal. Those two policies are the most sound-bite-able, but the other factors that continue to cause headaches are more obscure and hard to mobilize political activism around. They will require really motivated people inside the system to push to fix. The FAR requirements in Minneapolis are a good example.

For advocates outside of local government, the near-term work is partially in showing the regulators where the problems lie. The Incremental Development Alliance has begun to do this work with city planning staffs, consulting with them on “stress tests.” These are day-long workshops that aim to discover and highlight the specific problems local regulations are creating for small developers.

In South Bend, Indiana, developer Mike Keen brought in the IDA for one of these stress tests. In the morning, they taught city planning and zoning staff some of the basics of small-scale development. In the afternoon, they applied the city’s own rules to a development proposal and catalogued the sticking points. As a case study, the South Bend stress test looked at Shetterley Triangle—an unusual half block which had once held 13 houses, but by this time was down to six homes and seven vacant lots. Keen and his partners proposed to build seven new energy-efficient houses on the same block where homes had once stood.

The problem? Try thirty-six problems. “It turned out we needed 36 variances, at a total cost of $12,000, to put those seven houses back where they used to be,” Keen told me.

This was eye-opening for the city staff. South Bend has since worked extensively to reform its zoning code to make it more legible and simpler for small-scale development. I interviewed planning director Tim Corcoran about these efforts in 2019, when he told me that the city’s goal was a code that could be understood with “a high-school education and an hour of your time.”

These efforts are paying off. In 2021, South Bend eliminated its parking minimums. This and other reforms won it the 15th annual award from the Form-Based Codes Institute for the best municipal zoning code.

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