REI Senior Marketing Intern Sean Deery's MBA capstone report on Missing Middle Housing.
Video presentation:
Summary, Conclusion, Recommendations
The following passages explain the summary, conclusion, and recommendations of the report.
Summary, Conclusion, Recommendations Sections include:
Summary
Conclusion
Recommendations
Summary
First and foremost, the topic of missing middle housing is a zoning issue. Euclidean zoning was the original model used for suburban planning - spreading segregated property uses (single family, retail, industrial, commercial, etc.) across Long Island. The single family home way of life grew so popular that by 2016, 37.9% of all land on Long Island was zoned residential and only 5.9% was vacant and undeveloped (Suffolk County Department of Economic Development and Planning et al., 2018).
As developable land became more scarce, Long Island residents started to see dense development as a major source of regional issues - such as traffic congestion, high taxes, and decreasing amounts of open space. This general view of dense forms of housing helped to maintain strict zoning codes that favored single family housing. By the 1970’s, Long Island’s multi family parcels were largely developed and the next two decades (1980 to 1999) saw a 210% decrease in the construction of apartment buildings, followed by another 30% decrease from 2000 to 2010 (Long Island Index, 2015).
There is now a gap in the supply of the housing market of Long Island due to decades of restricted multi family construction. By 2030, Long Island is expected to gain 158,000 additional households with 104,000 of those households expressing a preference for housing in walkable, mixed use areas (HR&A et al., 2016). Unfortunately, 2016 showed a new development pipeline of only 64,000 new housing units - meaning there will be a 72,00 unit gap in walkable mixed use housing units and a 22,000 unit gap of housing units in residential areas to meet housing demands through 2030.
Unfortunately, the severe lack of diverse housing options inflated Long Island home prices to the point where 60% of Long Island residents see the lack of affordable housing as a serious problem - while only 49% of NY/CT residents and 47% of NJ residents believe housing affordability to be a serious problem for their region (Stony Brook University & Long Island Index, 2015). In 2020, Nassau County had 39.3% of households spending more than 30% of their income on housing and Suffolk County had 41.2% of households meeting that criteria (U.S. News, 2020).
Simply put, housing costs are crippling families, pushing seniors away to lower cost states, and forcing young professionals to seek out other parts of the country where they can afford the walkable lifestyle that they desire. More specifically, 67% of residents aged 18 to 34 want to leave Long Island in the next 5 years while only 40% of residents in that age range expect to retire on Long Island (Ngo, 2019). The most cited reason for leaving is the cost of living. This has resulted in a net migration of 3.6% of Suffolk County residents leaving the county in 2019 and 1.4% of Nassau County residents leaving the county in 2019 (U.S. News, 2020). In 2019, Nassau County’s population was 1,356,924 and Suffolk County’s population was 1,476,601 - representing a net migration loss of more than 63,000 people from 2010 to 2019 (Winslow, 2020).
With so many people moving off Long Island, companies are following them! The paradox of Long Island is that we have one of the most highly educated populations in the country, but housing costs are strangling our citizen’s ability to pursue opportunities and companies can’t easily access the talent because business parks and commercial properties are only accessible by long car rides. Nassau County spends $28,105 per pupil and Suffolk County spends $26,453 per pupil (national median is $12,061), Nassau County graduates 91.4% of its high school students and Suffolk County graduates 90.1% of its high school students (national median is 88.8%), and Nassau County has 53.1% of its population with advanced degrees and Suffolk County has 44.9% of its population with advanced degrees (national median is 29.1%) (U.S. News, 2020).
Voters on Long Island are getting fed up with the insufficient municipal services that they are paying for - payments that are some of the highest in the nation. The largest complaint of residents who report a desire to leave Long Island in the next five years are the high taxes (Ngo, 2019). Legacy costs continue to mount because of deferred maintenance and public liabilities, meanwhile a shrinking population and commercial tax base create a situation where Long Island could spiral into bankruptcy. In 2020, Long Island’s 13 towns owe $187.5 million in public debt obligations - which is $33 million more than New York State’s 900 other towns combined (Clark, 2020).
What all of this lack of willingness to adopt new zoning codes to meet the changing needs of businesses, residents and population density efficiencies, has resulted in Nassau and Suffolk Counties being rated the number one most expensive places to live in the United States (Stanger, 2015).
Missing middle housing is anything besides a single family home or a mid-rise apartment building; accessory dwelling units, cottage houses, townhouses, courtyard apartments, duplexes, triplexes, and fourplexes. Long Island contained 809,000 single family detached housing units in 2016 (HR&A et al., 2016). If only 5% to 10% of these single family homes successfully added an accessory dwelling unit, 40,000 to 80,000 housing units could be created - without using any additional undeveloped land.
At the same time, because Long Island is already so constrained by transportation and developed space; transit oriented development, overlay districts, infill development, and adaptive reuse of existing properties have equal or greater potential to get Long Island on the right track because they directly play into regional economic development and planning efforts related to downtown revitalization and transportation improvements.
There are many misconceptions and potential negative impacts of missing middle housing that need to be addressed for successful adoption. These misconceptions include; overburdened school districts, decrease in property values, traffic/parking problems, higher rates of crime, environmental destruction, unattractiveness, and increases in low income populations.
For school districts, almost every study you find points to a lower number of school age children in multi family housing units as compared to single family homes. In addition, there are many studies that show that multi family housing is very lucrative for a municipalities’ tax revenue. Aside from the secondary economic benefits of more consumers to patronize local shops, the six new multi family developments built in Farmingdale since 2011 have added $1.4 million in net tax revenue to local school districts alone over a six year period (Long Island Regional Planning Council, 2020).
Property values are the majority of most household’s net worth, but the assumption that multi family housing in the area decreases property values is the opposite of what typically happens. A study by the National Association of Home Builders showed that houses within 300 feet of an apartment or condominium building went up 2.9% a year - compared to the 2.7% appreciation rate of a house without multi family housing nearby (Urban Land Institute, 2005). Improvements to existing properties mean additional private investment is being incorporated into the area, individual property values will rise with more units/rental income potential, and more businesses will open in the surrounding area to service the increased population.
Traffic concerns could be realistic if missing middle housing was adopted in heavily auto dependent areas or without any regard to regional transportation infrastructure. However, the average daily car trips of a single family home was 10 trips per day while the average daily car trips of an apartment was 6.3 trips per day and condominiums/townhouses averaged 5.6 trips per day (Urban Land Institute, 2005). In addition, data from the National Personal Transportation Survey showed that doubling density decreases vehicle miles traveled by 38%. Higher density housing allows residents to make fewer and shorter trips because more of their destinations are within the same area. Finally, increased density can allow for increased mass transit service or parking structures to be added.
Crime is a very regional topic and Long Island already enjoys some of the lowest crime rates in the country. New multi family development typically incorporates lighting plans, open landscaping, security systems, and more safety features that can even be required by the municipality. However, having more residents in the area is key to preventing more crime because there will be more eyes on the street and more people to pay for police supervision.
Environmental concerns should likely be turned toward single family properties that account for the largest portion of Long Island’s land use, problems with nitrogen from landscaping/septic systems, impervious surfaces, auto dependency, and reduced open space. Recent guidelines produced by Suffolk County also show that new apartment units have lower wastewater flow rates because of required water saving technologies/techniques. Finally, more dense populations can also make sewer infrastructure economically viable - which is the ideal wastewater treatment system.
High density housing being unattractive and only for low income populations is the most subjective of the myths typically assumed by residents who oppose multi family housing. 41% of renters said that they rent by choice and not out of necessity - with the fastest growing segment being households making more than $50,000 a year (Urban Land Institute, 2005). Also, real estate developers and homeowners adding missing middle housing have extensive financial incentive to create an attractive and successful residential property. If the property does not meet the demands of the potential tenants, the property owner will face severe financial consequences that they will try to avoid with good designs.
Conclusion
Elected officials can gain voter support by adopting missing middle zoning because Long Island residents would have more access to appropriate housing types, employers could more easily access talent, and there would be enough taxpayers in densities appropriate to improve municipal services - reversing the trend of stagnated zoning, economic decline, mounting public liability, and general displeasure from the current residents of the Long Island region.
Accessory dwelling units and comparable missing middle housing such as cottage houses and townhouses can fill an increasing demand for housing in an affordable way. Long Island contained 809,000 single family detached housing units in 2016 (HR&A et al., 2016). If only 5% to 10% of these single family homes successfully added an accessory dwelling unit, 40,000 to 80,000 housing units could be created. ADUs also fall in line with visual precedence of neighborhoods and can be a great way to house multiple generations on one lot or create rental income to offset housing expenses.
Transit oriented development is a placemaking effort to create lifestyle districts and vibrant communities surrounding mass transit nodes. With Long Island’s economy being tied to New York City so heavily and traffic congestion causing billions of dollars of losses for Long Island’s economy, adding housing units in proximity to mass transit and walkable destinations is one of the most promising ways that Long Island can house more people and become more economically competitive. A 2010 study found 8,300 acres of parking lots and undeveloped land within a half mile of a downtown or LIRR station that could be developed into 90,000 new housing units in garden apartments, townhouses, and mid-sized apartments (Law & Rabinowitz, 2011).
Overlay districts are an expedient way that municipalities can customize zoning to the needs of a particular swath of land - allowing updated zoning codes to be overlaid onto an area. This tool is a great way for Long Island to target specific areas of regional significance that could benefit from increased density and/or land uses. The overlay district being used in the Innovation Park at Hauppauge could lead to “as many as 1,000 apartments, a greenway connection, quality-of-life amenities, business incubators, an advanced manufacturing hub, and a workforce training center that will address filling job openings in biopharma and finance, among other issues” (Bolger, 2020).
Infill development is characterized by adding new buildings or space to existing developed parcels. According to the Long Island Index, 65% of rental units on Long Island are located outside of a half-mile radius of a downtown and 59% of the apartment pipeline will be built outside of a half-mile radius of a downtown (Long Island Index, n.d.). With such a strong demand for walkable lifestyles and Long Island’s large vacancy rates in commercial space, infill development can create the necessary foot traffic to support a variety of uses by maximizing the potential of a particular area pursuing infill development - such as the Nassau Hub project proposing infill development for the 77 acres of parking lots surrounding the Nassau Coliseum (Law & Rabinowitz, 2011).
Adaptive reuse of underutilized structures is also a solution to Long Island’s mismatch between current land use and demanded land use. Retail space has been radically transformed over the past two decades as online shopping has caused thousands of retail bankruptcies - shopping centers on Long Island between 10,000sf and 350,000sf had a retail vacancy of 9.3% (Parrish, 2020). These “dark” storefronts reduce property tax base and bring about other negative impacts to community character. If zoning for these properties remain the same, they will likely remain empty for many years to come. In order to meet the need for last-mile logistics, flexible office space, light industrial, and apartment housing, adaptive reuse should be streamlined - such as the Heritage Village project in Hicksville attempting to redevelop the 26.4 acre site of a former Sears store into a 425 apartment mixed use parcel with retail, office space, a movie theater, grocery store, and parking (Parrish, 2020).
Of the 158,000 new households projected for Long Island by 2030, 54,000 of those households will prefer to be in a residential zone and 104,000 prefer to be in a walkable zone. However, the current projects only show 32,000 units being developed in residential areas and 32,000 units being created for walkable areas - a gap of 72,000 units in walkable areas and a gap of 22,000 units in residential areas. Municipalities like Amityville that have moved to increase the supply of multi family units in their downtown and in residential areas are starting to address this gap and the implications on housing access are clear. Every income above $35,000 a year in Amityville reported lower housing burdens than their average Long Island counterparts (Regional Plan Association, 2020).
Municipalities that allow for more missing middle housing are also seeing improved economic indicators on the local level. Amityville’s median housing costs rose 7.1% from 2000 to 2018, but the median income rose 11.6% - compared to Long Island at large, whose median housing costs rose 23.6% at the same time as losing 1.6% of median income (Regional Plan Association, 2020). Another example is Farmingdale who allowed six multi family buildings to be constructed in their downtown while investing over $20 million into the downtown infrastructure, which has reaped $33 million in added tax revenue - a $1.74 return for every $1.00 invested (Long Island Regional Planning Council, 2020).
Effective investments in public works projects through downtown revitalizations and added population density through missing middle housing can be the one-two punch needed to improve Long Island’s expensive municipal services. As population figures slowly decrease, inflation makes goods/services more expensive, and towns deal with the decay of suburban infrastructure, local taxes will continue to rise - pushing more and more residents to find housing in more affordable regions. The cost of municipal services increase directly in accordance with the distance traveled to provide such services to the residents. Adding more residents to existing service districts in a dense way can reduce the burden that each of the taxpayers endure, and more residents in one area can support service expansion like sewer districts or bus rapid transit lines.
Increasing housing prices, increasing car dependency, increasing taxes, and decreasing job opportunities all point to an ineffective use of land when Long Island is viewed as a united region. Missing middle housing and the associated forms of increasing density in both residential neighborhoods and downtowns/transit hubs with a comprehensive plan to roll out the best practices for each strategy is what Long Island needs now more than ever before.
Recommendations
Each municipality on Long Island will have to tackle its zoning issues in a unique way to reflect local needs/wants. Nassau County may need to focus on zoning strategies such as transit oriented development, overlay districts, infill development, and adaptive reuse since single family regions of Nassau are already quite densely populated, while Suffolk County can incorporate all of the above as well as more accessory dwelling units, cottage houses, courtyard apartments, and multiplexes thanks to the larger lot sizes. In every situation, new development should be promoted in/near downtowns, transit hubs, and underutilized commercial centers. Additionally, sewer districts and active transit/mass transit connections should be considered when choosing which locations to push for missing middle zoning.
Before moving on to the rest of the recommendations, the first step is gaining community input. Without involving the community in the preliminary phases of code change processes, backlash against the recommendations will always be present. Not only does community input increase the likelihood of successful outcomes, but it also speeds up the timeline of adoption because there will be less delays throughout the review/implementation processes.
Specifically related to accessory dwelling units, update codes should focus on ease of construction to allow as many homeowners to participate as possible. Similarly, there should be a streamlined process to legalize illegal rental units - because they are safety hazards, tax burdens, and disparage the reputation of legal apartment housing. Toolkits and technical assistance can be paired with low-interest financing to accelerate broad, equitable adoption. Granular details that can be assessed include disincentives to prevent the consolidation of multi family structures into single family homes (such as keeping the tax assessment based on multi family value) and reducing parking minimum requirements to reflect the decreased automobile use of apartment dwellers - especially when in proximity to downtowns and transit hubs.
Specifically related to transit oriented development, proposals should be in proximity (½ mile) to a train station or mass transit hub, carve out public spaces to improve livability, add mixed-uses to reduce the need to travel outside of the TOD, build at a pedestrian scale to promote walkability, add ground floor retail to increase commerce on the thoroughfares, plan for sidewalk cafes to establish a destination, incorporate green space/plantings wherever possible, and plan for structured parking or concentrated parking areas to keep the main part of the TOD foot traffic oriented.
However, Long Island got to the position it’s currently in because each municipality took a local view and ignored the needs of the larger region. Moving forward, local zoning codes should reflect the land use trends of the region, planned transportation investments, proposed downtown revitalization efforts, and regional economic development efforts - like the effort to implement bus rapid transit through the Connect Long Island initiative or the promotion of active transportation through the Suffolk County Hike and Bike Master Plan. Such reflection of regional needs could include; working towards north-south transit connections, decreasing automobile dependence, connecting educational/research/economic hubs, encouraging innovation zones around regionally significant assets, and maximizing existing infrastructure.
Finally, there are a few ancillary efforts that could improve overall adoption of missing middle zoning. First, tenant protection laws in New York state sent down from Albany have created a tenant-landlord relationship that greatly favors the tenant and reduces the likelihood of a homeowner from renting their house because of the financial and legal liabilities. (I had to sleep in my car for seven months - even through the winter - because my tenant told my family that they were not leaving our house 5 days before the agreed upon move out date). Yes, protect tenants from unscrupulous landlords, but make it an even playing field so bad tenants also get penalized for their actions. If not, small scale landlords will continue to go out of business and less housing will be put on the market. Second, innovative infrastructure and utility efforts can be implemented when new development occurs. Carpool drop offs, street light management, 5G networks, Complete Streets pedestrian oriented design features, increased network services, energy storage/distributed energy resources, demand management, and more can all become viable with increased density and proposed construction efforts. Finally, just like this report utilized extensive data/reporting from other studies, Long Island should establish a framework for metrics and measures that can be used to assess the performance of missing middle zoning code changes. This data could be used to develop detailed best practices, opportunities for improvement, and increased adoption thanks to detailed data related to missing middle zoning on Long Island.