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Writer's pictureRowena Patton

#8 Politics and Real Estate: How Local Election Results on Zoning and Land Use Impact Housing and STRs

Updated: Sep 24

Local elections play a critical role in shaping the real estate market, particularly through zoning and land-use policies. These regulations dictate how land can be developed, which in turn influences the supply of housing, home prices, and overall affordability. As we approach the 2024 elections, the outcomes of local races could have a significant impact on the housing market, with each party bringing different perspectives to zoning and land use.


1. What Are Zoning and Land Use Policies?

Zoning laws determine how land within a community can be used. For example, certain areas may be zoned exclusively for residential, commercial, or industrial purposes. Local governments control zoning to regulate density, building height, and the type of structures allowed in a given area. This affects everything from single-family homes to multi-family apartments, as well as where and how new developments are built.


Land use policies go beyond zoning and include decisions around infrastructure, public amenities, and environmental regulations. Together, zoning and land use decisions can either expand housing supply or limit development, impacting home prices and affordability.


2. Republican Approach to Zoning and Land Use

The Republican Party typically supports less restrictive zoning laws and favors policies that make it easier for developers to build new homes. Republicans argue that free-market solutions are key to addressing housing shortages, and they believe that deregulation will allow for more housing construction, ultimately bringing down prices through increased supply.


Examples:

  • Texas: In cities like Houston, Republicans have long resisted zoning laws, allowing developers more freedom. This has resulted in a more affordable housing market compared to heavily regulated states like California. Houston’s flexible zoning approach allows for a mix of single-family homes, townhouses, and commercial developments, keeping housing supply high and prices relatively low.

  • Florida: In Miami-Dade County, Republicans have advocated for reducing zoning restrictions to encourage the development of more multi-family housing. This is seen as a response to growing demand, particularly among younger buyers who prefer urban living and affordable housing options.


Funding Sources:

Republicans aim to reduce the role of government and rely more on the private sector to fund development. By cutting back on zoning restrictions and offering tax incentives to developers, they seek to boost housing supply without increasing federal or state spending.


3. Democratic Approach to Zoning and Land Use

The Democratic Party focuses on affordable housing initiatives and often supports zoning reforms aimed at promoting equity and sustainable development. Democrats argue that more inclusive zoning policies, such as upzoning (allowing for higher-density housing in previously single-family zones), can create affordable housing in high-demand areas.


Examples:

  • California: In response to its severe housing crisis, Democrats in California passed SB 9 in 2021, which allows for the construction of duplexes and fourplexes on lots that were previously zoned for single-family homes only. This move is intended to increase housing supply and lower costs, especially in cities like San Francisco and Los Angeles where housing shortages are most acute.

  • New York City: Democrats in New York have pushed for changes in zoning laws to allow for more multi-family housing and affordable housing developments. Mayor Eric Adams has focused on upzoning neighborhoods near transit hubs to increase the number of housing units while reducing exclusionary zoning that prevents affordable housing from being built in wealthier areas.


Funding Sources:

Democrats propose using federal funding and local taxes to support affordable housing projects. They often advocate for increasing taxes on higher-income earners and corporations to generate the revenue needed to build low-income housing and fund public infrastructure improvements that support new developments.


4. The Impact of Local Election Results on Housing

The outcomes of local elections will directly affect zoning and land use policies, which in turn determine how much housing can be built and where. Pro-development candidates who favor upzoning and increased density may help alleviate housing shortages, leading to more affordable housing options. On the other hand, anti-development candidates who push for stricter zoning laws could limit housing supply, driving up home prices.


Examples of Local Election Outcomes:

  • In Minneapolis, voters elected a city council that favored a landmark upzoning policy known as the Minneapolis 2040 plan, which eliminated single-family zoning across the city. This move is seen as a model for other cities looking to address housing shortages and racial segregation in housing.

  • In contrast, San Francisco voters have historically been more resistant to upzoning, favoring strict land-use policies that preserve existing neighborhoods. This has contributed to the city's chronic housing shortage and some of the highest home prices in the country.


5. The Debate Over Exclusionary Zoning

Exclusionary zoning refers to zoning laws that restrict development to single-family homes in certain neighborhoods, often preventing more affordable multi-family housing from being built. This type of zoning is a hot-button issue in local elections, as it may play a role in housing affordability and racial segregation.


  • Republican View: Republicans tend to oppose changing exclusionary zoning laws, arguing that property owners should have the right to maintain the character of their neighborhoods. They believe that deregulation in other areas, such as reducing environmental restrictions or lowering development fees, can expand housing supply without mandating changes to neighborhood zoning.

  • Democratic View: Democrats typically advocate for upzoning as a way to combat exclusionary zoning, arguing that it perpetuates inequality by limiting housing options for low- and middle-income families. Upzoning, they argue, would allow for a more diverse range of housing types and help meet demand in high-cost cities.

6. Zoning, Land Use, and the Future of Housing

Local election results will play a decisive role in determining the direction of zoning and land use policies across the country. Republicans tend to support deregulation and free-market solutions to boost housing supply, while Democrats favor government intervention and affordable housing initiatives. How local officials are elected—and what policies they implement—will determine whether housing becomes more affordable or remains out of reach for many Americans.

7. Politics and Real Estate: Local Election Results and the Debate Over Short-Term Rentals

In addition to zoning and land use, local election results also affect policies on short-term rentals (STRs), such as those listed on platforms like Airbnb and Vrbo. The debate over short-term rentals is intensifying, particularly in cities with high demand for tourism, affordable housing, and tight rental markets. Liberal cities tend to push for restrictions or outright bans on STRs, while Republicans generally favor allowing homeowners more freedom to rent out their properties. However, the issue is more complex than it seems, as many short-term rentals are owned by "mom-and-pop" landlords, not the wealthy investors often portrayed in political debates.


8. The Push for Short-Term Rental Bans in Liberal Cities

Many liberal cities have enacted or are considering strict regulations on short-term rentals, citing concerns about housing affordability, neighborhood disruption, and the hotel industry’s competitiveness. Cities like New York, San Francisco, and Los Angeles have led the charge, implementing policies that either severely limit or ban short-term rentals.

Key Reasons for Restrictions:

  • Affordable Housing Concerns: Liberal city governments argue that STRs reduce the availability of long-term rentals, driving up rental prices for local residents. They claim that converting homes and apartments into short-term rentals reduces housing supply, exacerbating housing crises in areas like San Francisco and New York City.

  • Neighborhood Disruption: STRs are often criticized for bringing large numbers of tourists into residential areas, causing noise, traffic, and safety concerns. Local officials in cities like Seattle have cited community complaints as a major reason for implementing strict short-term rental regulations.

  • Hotel Industry Lobbying: Some believe that the hotel industry, a significant political player, is lobbying hard to limit STRs. Hotels argue that they are subject to stricter safety, tax, and labor regulations compared to STRs, creating an unfair playing field. In New Orleans, for instance, local debates over short-term rentals have seen heavy influence from the hotel industry.


Example of Bans:

  • In New York City, new laws limit residents to renting out their homes only if they are present during the rental period and restrict rentals to fewer than 30 days. This has effectively curbed the majority of short-term rental listings in the city.

  • In Asheville, NC, recent regulations on short-term rentals (STRs) have significantly restricted their use, particularly in response to concerns over affordable housing and the impact of tourism on local neighborhoods. Similar to New York City, Asheville has implemented rules that curb the number of available STRs by limiting where and how homeowners can rent out their properties.

    • Key Regulations in Asheville:

    • Residential Zones: In Asheville, short-term rentals are banned in most residentially zoned areas unless the owner obtains a special permit for homestays. For homestays, the owner must be present in the home during the rental period, a rule similar to New York City’s requirement.

    • 30-Day Limit: Rentals of fewer than 30 days are restricted to commercially zoned areas or under specific circumstances for homestays, which ensures that only certain parts of the city allow for regular short-term rentals.


9. The Republican Stance: Property Rights and Homeowner Freedom

The Republican Party tends to oppose strict regulations on short-term rentals, advocating for property rights and homeowner freedom. Republicans believe that owners should have the right to use their properties as they see fit, including renting them out to generate income.


Key Arguments for Short-Term Rentals:

  • Property Rights: Republicans argue that homeowners should have the freedom to use their properties as they wish, including turning them into short-term rentals to supplement their income. They view restrictive regulations as government overreach, infringing on property rights.

  • Economic Opportunity: Many short-term rental owners are not large corporations but individuals or families looking to make extra money. In fact, a significant portion of STRs are owned by "mom-and-pop" landlords, who may rent out homes they inherited or second properties purchased as an investment. For many, short-term rentals provide crucial income, especially in areas with high property taxes or seasonal tourism.

  • Opposition to Hotel Industry Influence: some criticize the hotel industry's lobbying efforts to push for restrictions on short-term rentals. They argue that hotels want to eliminate competition, and strict regulations harm individual homeowners while benefiting large corporations.


Example of Republican Support:

  • In Texas, which is largely Republican-controlled, many cities have adopted pro-property rights policies, allowing homeowners greater flexibility to rent their homes on platforms like Airbnb. Texas cities have resisted statewide efforts to impose strict regulations, keeping the market open for short-term rentals.


10. Who Really Owns Short-Term Rentals? Not Just the Wealthy

A common misconception is that most short-term rentals are owned by wealthy investors or large property management companies. In reality, many are owned by ordinary families or individuals who are renting out inherited properties or homes they no longer live in full-time. For example, if someone's parents pass away and they inherit a house, they may choose to rent it out short-term to cover property taxes and maintenance costs, rather than selling the home outright.


This nuance is often lost in the political debate. While there are certainly some large companies and investors in the short-term rental space, "mom-and-pop" landlords make up a significant portion of the market.


Example:

  • In New Orleans, a significant number of short-term rentals are owned by locals who use the extra income to offset the high cost of homeownership. Many inherited homes are rented out part-time through platforms like Airbnb, and owners are far from wealthy investors.


Conclusion: The Political Divide on Short-Term Rentals

The future of short-term rentals in many cities may depend on local election results.


Democrats often favor strict regulations or outright bans, citing concerns over affordable housing, neighborhood integrity, and lobbying from the hotel industry.


Republicans, on the other hand, prioritize property rights and argue for the economic benefits of allowing homeowners to rent their properties freely.


For many mom-and-pop owners, these regulations could drastically affect their ability to maintain inherited properties or supplement their incomes. Whether short-term rentals thrive or shrink may come down to the political makeup of local governments and the power of voters in upcoming elections.


Sources:

  1. National League of Cities – The Impact of Short-Term Rentals on Local Economies.

  2. New York City Office of Special Enforcement – Short-Term Rental Regulations in NYC.

  3. Airbnb Citizen – Mom-and-Pop Short-Term Rental Owners.

  4. National League of Cities – The Role of Local Governments in Housing Policy.

  5. California Department of Housing – SB 9 and Housing Supply

  6. Brookings Institution – The Politics of Zoning and Housing Affordability.


    1. Disclaimer:

      This blog post is for informational purposes only and does not constitute financial or legal advice. Please consult a real estate or legal expert for guidance on how local zoning and land use policies may affect your property or housing decisions.


This is from our series ‘Politics and Real Estate






















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