Will this policy solve affordability in US cities?
A growing number of US cities are introducing policies of inclusionary zoning in a bid to tackle the issue of housing affordability for workers and a new report has considered the impact of the measures.
Inclusionary zoning, where developers are required or encouraged to provide rental or owner-occupied homes at below-market prices, has already been adopted by New York, San Francisco, Los Angeles, Seattle and Pittsburgh.
The Urban Land Institute has studied the policy in more than 500 cities across 27 states and there is evidence that it is working.
“Our analysis and research finds that local zoning policies can effectively encourage development of workforce housing, mostly in strong real estate market environments where communities provide the optimal mix of incentives,” said report
author and Terwilliger Center Executive Director Stockton Williams.
He noted that the most effective policies need to be adaptable to respond to changing market conditions however it is also important to have consistency. Balancing those two aspects, he says, are the central challenge for cities.
Buyers need to act faster to snap up a home
Homes are selling a week faster on average compared to a year ago, according to Zillow data.
With inventory remaining tight in many markets, almost 5 per cent lower than a year ago, transactions are closing in an average 78 days. Homes are pending within a month of being listed.
In theory, the tight supply is good news for sellers but Zillow’s chief ecomoist Dr Svenja Gudell noted: “…potential move-up buyers may hesitate to list their homes and become buyers. Until the supply increases, it will remain a tough market to find a home."
The limited supply of homes is driving home values higher. The average U.S. home is worth $187,000, a 5.4 per cent increase from June 2015. Home values have been increasing at 5 per cent or faster on an annual basis for the past eight months.
Virginia housing market has strong second-quarter
Home sales in Virginia have been strong so far in 2016. Sales in the second quarter built on the gains in the first three months, with 8.6 per cent more sales in April, May and June compared to the same period of 2015.
Virginia Association of Realtors reports 34,688 sales while the aggregate median sales price rose 0.9 per cent to $277,500.
“Second quarter strength rests on steady market improvement across key metrics, including rising price and growing buyer participation,” said 2016 VAR President Bill White. “Combined with the natural industry uptick in summer activity, low interest rates are urging buyers into the market and driving sales up throughout Virginia.”