A suburban neighborhood with a mix of single-family and multifamily homes.
Illustration by Lanette Behiry/Real Estate News; Shutterstock

Most Americans support adding density to combat affordability woes 

Housing supply has not kept up with demand, but building more units in existing residential neighborhoods could be part of the solution.

June 1, 2023
3 minutes

Key points:

  • A Zillow survey of renters and homeowners found that most people support some degree of densification.
  • Additional housing units could slow price growth, improving prospects for buyers.
  • Some municipalities have taken steps to relax zoning regulations, opening the door to more housing options.

At times, it can seem like renters and homeowners live on different planets. But a recent survey from Zillow found that the two groups are aligned on one key solution to the nation's housing affordability challenges: adding density in residential neighborhoods.

More than 82% of adults from 29 metro areas said they support allowing accessory dwelling units (ADUs), duplexes and triplexes in their neighborhoods. The result comes as housing affordability continues to be a primary concern for renters, homeowners and would-be buyers and sellers.

"More and more people understand that the key to stopping runaway housing costs is to build more homes," Manny Garcia, a senior population scientist at Zillow, said in a news release.

The housing affordability challenges many cities in the U.S. face are well-known at this point. Record-low inventory met a massive wave of new demand sparked by the pandemic, which combined to cause record-breaking price appreciations in several markets across the country.

Rising rents and home prices, combined with elevated interest rates, have stifled homebuying activity, and many economists point to affordability as a key blocker to home sales.

More housing units are one part of the solution

Gentle densification could slow price appreciation across the board and bring more buyers back to the market. But the solution relies heavily on local politicians supporting affordability measures.

Denver is one market where the local government has shown support for improving affordability, and it has seemed to slow the city's price appreciation at least in the short term. For instance, the city relaxed its zoning code to allow for more ADUs and increased its linkage fees to increase the amount of public funds available for affordable housing projects.

These efforts helped improve the affordability of Denver's single-family market, which scored 47 points out of 100 on the Colorado Association of Realtor's Housing Affordability Index in April, a 2.2% increase year-over-year.

In the Zillow survey, 70% of the respondents supported the idea of allowing ADUs on their property. Buyers, too, are looking for homes with ADU potential, according to Redfin data. For sellers, the impact of infill development on local home prices can vary based on the size of the project, a Wayne State University study found. Smaller developments of four units or less generally have a positive impact on price appreciation for nearby homes while moderate and large-scale developments generally have a negative impact, the study found.

Views on density vary across regions

Finding a consensus on how to solve affordability challenges has proven to be difficult, and support for various projects waxed and waned across the metropolitan areas Zillow surveyed. For example, only 24% of adults in Nashville said they would allow a condo building with 50 or more units to be built in their neighborhood compared to 48% of people living in Los Angeles who would support a similar project.

Renters and homeowners in red-hot real estate markets like Tampa, Atlanta and Phoenix — where price growth exceeded 30% during the pandemic — had more in common than pairs in other cities. Additionally, more than 79% of respondents in each market said they think local governments need to do more to promote housing affordability.

The two groups were also largely supportive of building multifamily developments within a 15-minute walk of transportation and recreation. But support was split over whether they would support a multifamily residence being built in their neighborhood. Just 57% of respondents said they would support such a project while 38% said they would oppose it.

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