Solution Fix Incentives


Reform structures that incentivize communities to say no to new homes, including tax systems and car centric transportation systems.

Poorly designed tax structures contribute to the high cost of housing. Those tax structures encourage cities to add jobs, but limit housing. Adding jobs but not housing means that cities can get tax revenue from businesses, without needing to pay for services (e.g., schools) for new residents.

Since many local governments have limited budgets, they try to get more revenue by charging fees on new housing projects. The fees discourage home builders and are often passed on to future residents.

States need to offer more help to local governments and fix these broken incentives. Better incentives can make cities build enough housing for workers. Better incentives can also make it feasible for home builders to build smaller, less expensive new homes.

Policies in this category include eliminating parking requirements, improving regional coordination on transit, and reforming broken tax policies that discourage residential building, such as California’s Proposition 13.