Housing is joining workforce development to become a major corporate site location issue. Growing regions like Central Ohio are developing 2.5 jobs for every 1 residential permit creating a housing shortage. Regions not growing are failing to develop substantial residential growth. Finally, rural regions are losing population at an alarming rate and desperately need new residential products to retain existing employers and to keep their young people. No matter where you are in the United States, the availability of attainable housing that young and old alike can afford is needed. The simple fact is regions cannot retain and attract companies without workers—workers won’t go to regions where they cannot afford housing.
The solution to housing policy likely resides in Statehouses across America. It is part money but part regulatory changes. Addressing the housing crisis requires state governments to launch a comprehensive policy approach focused on all housing options in urban and rural markets.
Housing Mezzanine Fund. Rising interest rates are jeopardizing major residential projects. A state housing mezzanine fund can be created from American Rescue Plan Act (ARPA) funds to match funds with lending institutions to provide mezzanine financing for residential development projects to meet the funding gap created by rising interest rates.
Regulatory Reform. A predictable land use and property tax assessment process is critical for the development of residential projects in urban and rural markets.
• Rural County Zoning. Small townships lack the ability to operate local land use programs and zoning should be in the hands of county government to ensure professional staff is in place to administer state zoning laws.
• Referendum Reform. States may only require 8% of the registered voters for a referendum on a local government ordinance or resolution to be placed on the ballot and this threshold should be substantially increased to 35% as required for the petition for a local liquor option.
• Property Tax Assessment. Again, states like Ohio operate with a complicated property tax assessment process that can impede residential institutions from predicting property tax costs. States can limit property tax appeals to only property owners, not disclose the value of the land purchase, and exempt from property tax the value of unimproved land subdivided for residential development more than the fair market value of the property for up to eight years or until construction begins or the land is sold.
Tax Abatement Reform. States should permit local governments to provide residential real property tax abatements without interference from local school districts or other taxing authorities. School districts are often the biggest opponents of residential growth even though they are in the business of serving local residents.
Rural Housing Loan Program. States should consider creating a rural housing loan program to support developers’ efforts to fund rural housing developments in rural counties.
Housing Infrastructure Fund. The availability of residential public infrastructure is essential in challenging financial markets. States can create a housing infrastructure fund from ARPA funds to award matching grants for residential public infrastructure and permit the local creation of Infrastructure Improvement Districts modeled after Transportation Improvement Districts for regional residential infrastructure efforts.
State Housing Tax Credits. The federal LIHTC program provides millions of affordable housing units. Over twenty states also created a workforce housing tax credit to provide support for LIHTC investors for their projects in the state.
Housing and workforce development need to be thought of as connected policy challenges. States and regions that meet this challenge will retain and attract the companies of the future.