The research is fairly academic. The findings are common sense. If I shared this article with 100 folks from my grandparents’ generation, 95 of them would ask why I needed a bunch of college researchers to tell me something they already knew. Such is the world we’re living in.

1950: Graduate housing at MIT.

Leon Festinger and two colleagues wanted to know how friendships form. They had a clean experiment sitting right in front of them. Students were assigned to apartments essentially at random, so nobody had chosen their neighbors.

What Festinger found is that the assignment heavily influenced who had which social interactions with whom. Most people became close friends with the person next door. People at opposite ends of the same hallway, maybe 100 feet apart, often never got past hello. And the residents with the most friends in the entire complex were the ones whose apartments sat at the bottom of a stairwell, because everybody in the building had to walk past their door.

Festinger called this functional distance. Not how far apart you live, but how many chances a day the building gives you to bump into each other.

The floor plan had a highly determinative impact on who became friends.

1989: Third Places

Ray Oldenburg publishes The Great Good Place and gives us the phrase “third place.” Places that are neither home nor work. The spot you go to without a plan or an appointment and where conversation or intentional interaction is the main activity. In many cases, social status has little to do with your job title. Bowling leagues, softball teams, Lions clubs, the barber shop, the post office counter. All of these are examples of social interaction in third places.

Oldenburg’s argument was that America had stopped creating third places, and that we were going to feel it negatively in the next generation. He was right. But, since his writing, third places have become popular again. It’s just that now they come at the cost of a $7 latte or a $15 cocktail.

1997: Chicago

Robert Sampson and his colleagues publish a study in Science built on interviews with 8,782 residents across 343 Chicago neighborhoods. They were trying to explain why violence varied so wildly between blocks that looked statistically identical.

The answer they landed on was something they called collective efficacy, which they defined as “social cohesion among neighbors combined with their willingness to intervene on behalf of the common good.”

In plain language: do people here know each other, AND do they think it’s their business when something’s wrong? Neighborhoods where the answer was yes had substantially less violence, even after controlling for poverty and instability and everything else you’d expect to matter more.

2018: Social Infrastructure

Eric Klinenberg, who had spent years performing a kind of autopsy on Chicago’s 1995 heat wave, publishes Palaces for the People. He puts two South Side neighborhoods side by side. Similar poverty rates. Similar share of elderly residents living alone. Similar demographics.

During the heat wave, the death rate in Englewood was 10 times higher than in Auburn Gresham.

The difference was physical. Auburn Gresham still had its sidewalks in decent shape, its diners and barber shops and grocery stores, its parks, its churches, its block clubs. Englewood had lost tens of thousands of residents and had vacant lots and abandoned houses on nearly every block, with no store left to walk to.

Klinenberg’s name for what Auburn Gresham still had is social infrastructure - “the physical places and the organizations that shape our interactions.”

He describes places like Auburn Gresham as having those conditions that “draw you out of your home and into public places where you build relationships.” In a place like Englewood, “you’re far more likely to kind of hunker down at home, and that gets you killed.”

To be abundantly clear about what that study is saying - the sidewalks and the storefronts were the difference between living and dying. Not metaphorically. Actually.

Share

Of all the research and folk wisdom I could find and synthesize, here’s the common thread:

Community is built through recurring, inclusive structures in which people are known, needed, able to contribute, and able to rely on one another while doing something meaningful together.

You can’t manufacture that feeling. What you can build is the pattern underneath it: relationships, practices, places, and some real share of power, repeating often enough that people start counting on them.

My grandmother would have put it more plainly. “A community is people who know your name, need your hands, and expect you back next week.”

AI-generated “hand-crocheted folk wisdom.” Irony intended.

Notice that all of the research has identified physical attributes of a place that lead to better or worse social outcomes for the people who live there.

That’s the premise of this next series. The social outcome we say we want has a physical form.

In the work of building community, that’s the core idea to hold onto. People want to feel that they belong. They want to contribute something that matters. They want their presence to be noticed by the people around them. How do we build places that do not force interactions, but where interactions are strongly supported by the details of the buildings, the streets, and places that people of all ages, abilities, and incomes can easily access?

Over the next several posts we’ll get concrete about it. What a third place actually needs to survive financially. Why the small stuff - benches, pocket parks, a corner store, a front porch - tends to do more work than the big stuff. How a place stays welcoming to the people who haven’t arrived yet without giving up what made it worth protecting. And how a community builds a vocabulary for what it’s gaining instead of only what it’s losing.

Subscribe now

A few of the originals:

• Leon Festinger, Stanley Schachter, and Kurt Back, Social Pressures in Informal Groups (1950) - the Westgate study and the idea of functional distance.

• Ray Oldenburg, The Great Good Place (1989) - third places.

• Robert Sampson, Stephen Raudenbush, and Felton Earls, “Neighborhoods and Violent Crime: A Multilevel Study of Collective Efficacy,” Science (1997).

• Eric Klinenberg, Palaces for the People (2018), and his earlier Heat Wave: A Social Autopsy of Disaster in Chicago (2002).

• Daniel Kahneman and Amos Tversky on loss aversion - the accessible version is Kahneman’s Thinking, Fast and Slow (2011).

A developer proposes new apartments or townhomes in a neighborhood. Someone stands up at the microphone and says: this development will raise our rents and push people out. Several people in the room nod in agreement. Some even exclaim their agreement out loud. The result is that the Planning Commission or the Town Council begins to question whether this development is the right thing. They delay. Or they ask for more studies. They might say that they would support the development if only the housing were more affordable. But the Council does not offer financial support to help achieve that desired affordability. And members of the community go home feeling like they protected the neighborhood.

It’s a powerful story. It feels good. But the evidence suggests this pattern is making housing more expensive and its harming local neighborhoods.

We now have abundant and rigorous research to demonstrate the impact of new housing supply on affordability in lower income and middle income neighborhoods.

Share

Small scale infill on an empty corner lot creates housing without displacement.

The Research

The clearest recent summary comes from Vicki Been, Ingrid Gould Ellen, and Katherine O’Regan of NYU’s Furman Center, in a 2024 paper with the very on-the-nose title “Supply Skepticism Revisited.” They set out to test the skeptic’s core claim (that building market-rate housing won’t slow rent growth) against the best available causal studies. Their review points to four findings:

1. More supply reduces rents, or slows rent growth, across a region. This is the well-established one.

2. In many cases, new construction slows rent growth in the immediate surrounding neighborhood, too, not just the metro at large. This is the exact opposite of the fear many people have that a new building in their neighborhood will raise rents in nearby buildings.

3. New supply has not been shown to increase the displacement of lower-income households. It gets associated with markers of gentrification, but association and causation are not the same thing, and the displacement effect people fear simply doesn’t show up in the data.

4. New housing sets off a chain of moves. A household moves into the new building, vacating an older unit, which someone else moves into, and so on down the price ladder. Those “moving chains” open up homes for people across the income spectrum, including renters far below the price point of the new construction.

None of this is fringe. It lines up with a growing set of place-based studies. Kate Pennington’s work on San Francisco and the Urban Displacement Project’s analysis of new market-rate construction in Los Angeles and San Francisco all point to new supply easing displacement pressure rather than driving it.

If you want a simplified summary of the research, read Jerusalem Demsas. Across her housing writing for The Atlantic, collected in On the Housing Crisis, she has spent years dismantling the idea that new construction is the villain. Her essay “The Real Villain in the Gentrification Story” makes the point that has stuck with me most: the villain isn’t the new building in a changing neighborhood. It’s the wealthy, exclusive neighborhood that built nothing at all. When affluent areas use their political muscle to block housing outright, the households who would have lived there don’t disappear. They go compete for homes in the neighborhoods that couldn’t mount the same defense. What arrives in those neighborhoods is demand, and it arrives whether or not anyone builds anything. The new apartments are a response to that pressure, not the cause of it.

Which points at the actual problem: we have been asking a handful of neighborhoods to absorb a region’s entire growth, and then blaming the buildings and their developers for the results. We want housing to be more affordable. We can achieve that affordability over time by building enough new homes to serve the entire community.

Austin is the case study everyone now cites. According to a March 2026 analysis from the Pew Charitable Trusts, the city added 120,000 homes between 2015 and 2024, a roughly 30% increase in its housing stock. Over that same stretch the citywide median rent fell about 16%, from $1,546 in December 2021 to $1,296 by January 2026. Austin went from renting 15% above the national median to 4% below it, and it did that while the city added population. That is what supply looks like when a city lets it happen.

An ongoing housing boom in Austin, Tx has proven to reduce rents across the City.

Demsas’ deeper point is that blocking market-rate housing to “protect” a neighborhood is one of the most reliable ways to make that neighborhood less affordable, not more. When we block new housing in existing neighborhoods, we guarantee that more households will compete for the scarce options already available. That pushes prices up.

On Rent Control

Many of the same advocates who fight new development will, in the next breath, champion rent control or rent stabilization. And I understand the instinct. It comes from a real place of wanting to shield renters from brutal, sudden increases.

But look closely at what rent control actually delivers. Rent control does not reduce the underlying cost of housing in a city. What it does, for the units it covers, is slow the rate at which rents rise and give existing tenants stability. That’s the mechanism people are really asking for: protection from runaway rent growth. (The trade-offs are well documented too: rent control tends to push rents up in the uncontrolled part of the market and discourages new construction, which is why economists are so wary of it.)

Now compare that to the supply research. Slowing the growth of rents is exactly what building more housing does, except it does so market-wide, for renters who will never set foot in a rent-controlled unit, and it does so by adding homes to the stock instead of shrinking it.

Rent control and new supply are aiming at the same target: minimizing rent growth. One does it by rationing a fixed and shrinking pool of housing for only a handful of people. The other does it by growing the pool. If you accept the goal behind rent control, you should also accept the goal behind building more housing supply. The problem is that so many people are afraid of the change that comes with building.

Asterisk*

New market-rate housing is not a substitute for dedicated affordable housing, vouchers, or public investment. We need all of those as well.

Austin Texas is proving the both/and scenario. Pew Charitable Trusts has broken the 2023 to 2024 rent declines out by building class, and the pattern ran opposite to what the skeptics predicted. Class A luxury units fell 2.6%. Class B fell 5.9%. Class C, the older non-luxury buildings that house lower-income renters, fell 11.4%, the largest drop of any large metro in the country. The relief was biggest at the bottom of the market, which is where the filtering theory says it should show up and where critics said it never would.

“Supply won’t fix everything” is a very different claim from “supply makes things worse.” The first is true. The second is the myth that we have to keep pushing back against because it keeps killing or diminishing projects in places that desperately need more housing and more investment.

What this means for our neighborhoods

Our firm is based in West Michigan, where the housing math is not subtle: we are tens of thousands of units short, and the shortage is what’s driving rents and home values beyond the average household’s ability to afford them. When we block housing in the name of affordability, we get neither the housing nor the affordability. We get scarcity. It shows up as families priced out of good school districts, young workers forced to leave the region, and seniors who are trapped in homes that no longer suit their abilities.

Research alone won’t make the next public hearing any easier. The story of the greedy developer raising your rent is emotionally satisfying in a way that “moving chains and regional filtering effects” will never be. But we need to get much better at explaining how the housing system actually works, and at talking with the broader public and with housing advocates about what is genuinely possible when we work in alignment with the data.

Sources: Been, Ellen & O’Regan, “Supply Skepticism Revisited,” Housing Policy Debate (2025); Jerusalem Demsas, housing writing for The Atlantic, collected in On the Housing Crisis: Land, Development, Democracy (2024);

The Pew Charitable Trusts, “Austin’s Surge of New Housing Construction Drove Down Rents” (March 2026).

Pennington, Kate, “Does New Housing Supply Cause Displacement”, 2020

Mast, Evan, “New Construction Makes Homes More Affordable - Even for Those Who Can’t Afford The New Units”, W.E. UpJohn Institute

Diamond, Rebecca, “What Does Economic Evidence Tells Us About the Effects of Rent Control?”, Brookings

A handful of tired, single story buildings and small parking lots standout in one of Grand Rapids most popular neighborhoods.

The answer is almost always some combination of three things: local zoning, the state building code, and the high cost of construction. Two of these we can change with a little effort and political will.

At Flywheel we’ve spent a lot of time on the zoning side, especially the way excessive parking minimums and green-space requirements quietly make infill impossible in places where buildings are supposed to sit close together and close to the street. On a constrained lot, there just isn’t room to provide two parking spaces for every housing unit. In many commercial districts, local communities have over-indexed to require retail on the ground floor. It was a great goal, but there just isn’t enough demand for brand new retail space in these environments to justify the cost of new construction.

But there’s another culprit we haven’t given nearly enough attention: the building code. Specifically, the requirement for two separate stairways, along with the corridor and elevator core that come with them, in almost any residential building over three stories. That single requirement does more to kill small-lot infill than most people realize.

Small-scale infill has been made practically (and often legally) impossible. Image credit: Lanefab, recently published by sightline.org https://www.sightline.org/2026/07/10/in-pictures-the-possibilities-of-vancouvers-new-villages-plan/

Share

Why two stairs is a problem on a small lot

Michigan’s building code, like most in the country, is based on the International Building Code, which requires two separate stairways in any residential building over three stories. The rule dates back to a time before sprinklers and fire-rated construction, when a second way out really was a matter of life and death.

The trouble is what that second stairway does to a small building on a small lot. Two stairs at opposite ends of the building, plus the corridor to connect them and often an elevator to serve them, add up to a big horizontal core, and a big core needs a big floor plate. A big floor plate usually means buying up and combining several adjacent lots. On the narrow, oddly shaped, already-built parcels that make up most of our existing commercial districts, that kind of assembly is slow, expensive, and frequently just not possible. You need a willing seller on every parcel, clean title on each, and prices that still pencil once you’ve stitched them together. So the four-story apartment building that would fit fine on a single Main Street lot never gets built, and the space above the shops stay empty.

A single-stair provision cuts that knot. When one code-compliant stair can serve the building, you no longer need the oversized floor plate, or the multi-parcel assembly it requires. A single, existing lot becomes buildable on its own. The project that used to require an acre and three cooperating landowners can now happen on the single small parcel that’s just begging for new life.

Small lots still have to carry big fixed costs

Every infill project carries a stack of fixed costs before anything is built and sold or rented—design, engineering, environmental review, permitting, financing. And on the kind of older commercial parcels we’re talking about, there’s frequently a brownfield condition to deal with: contaminated soils, an old gas station or dry cleaner, a foundation that has to come out. Cleaning that up is often the right thing to do for the block, but it isn’t cheap.

Those costs don’t shrink because the building is small. They get spread across however many homes you can put on the lot. If the site can hold twelve units, then the predevelopment and remediation costs per home might be manageable. If it only holds six units, then the same costs can sink the deal. That’s the math that often stops potentially good infill.

And when the building code and the zoning code cap development at two or three stories, getting enough units on a small lot is genuinely hard. You simply run out of vertical room to spread the fixed costs over. And that’s the bind: the two-stair requirement pushes you toward assembling more land precisely when the economics are begging you to build a few more floors on the land you already have.

The single story building on the left corner has been on too small of a lot to justify replacing it with a two or three-story building. But four stories and a single stair might make the difference.

What Michigan’s single-stair bills actually do

The Legislature has now passed a small fix. House Bills 5570 and 5571 create a limited exception to the two-stair rule, allowing single-exit-stairway residential buildings up to four stories, and they do it with the modern fire protection written right in. The provisions are careful and specific: sprinklers throughout, no more than four dwelling units per floor, floor plates capped in size, a hard limit on how far any unit can sit from the exit, smoke detection and alarms in the common areas, and requirements about the stair enclosure itself, including no elevator opening into it. This isn’t the old walk-up so many people picture. It’s a small, sprinklered building where every unit sits close to a protected stair.

Michigan isn’t experimenting here. Seattle, New York, and Honolulu have built this way for decades, and Montana, Texas, and Colorado have adopted versions of single-stair reform in just the last couple of years. It changes the math: on a single Main Street lot that today can’t hold more than a triplex, four stories with a few units per floor can pencil, and that’s finally enough homes to carry those fixed predevelopment and cleanup costs.

Signed into law—and then the real opportunity

This is actually happening. Both bills cleared the Legislature with wide bipartisan margins, 97–9 in the House and 33–3 in the Senate, and they’re expected to be signed into law by Governor Whitmer next week. That’s worth celebrating. It’s about as practical and non-partisan as housing reform gets, and it passed with support from both sides of the aisle.

But the law is only the start. What excites me most is who this opens the door for. So much of our development conversation assumes the only way anything gets built is for a large-scale developer to buy up an acre of land and put up a massive four-over-one apartment building that looks just like the other buildings down the street. Single-stair changes that. A buildable single lot is something a local, emerging developer can actually take on: a contractor ready to try their first ground-up project, a business owner who wants housing above their own storefront, a small partnership that knows the neighborhood because they live in it. These are the people who should be participating in the growth of their own downtowns, and for years the code has effectively told them to wait for someone bigger. This lets them build something for themselves.

Now it’s the municipalities’ turn

A better building code only matters if local zoning lets you use it. A four-story single-stair building is legal to construct under the new state code and still impossible to build if the local ordinance caps height at two stories, demands a sea of parking, or forces a special-approval process that a small developer can’t afford to wait out. The code and the zoning have to point the same direction.

So this is the ask for every community that says it wants walkable neighborhoods and more housing choice: update your zoning to match the new building code. In the places where the community is ready for growth—your Main Streets, your traditional business districts, your transit corridors—allow four stories by right, so a good project doesn’t hinge on a discretionary hearing. And bring parking requirements down to only the minimum genuinely necessary to keep the neighborhood functioning, rather than the maximum that fills a small lot before a single home can go there.

The space above our storefronts is some of the most walkable, most under-used real estate in Michigan. The state is about to make it legal to build there again on the lots we already have. Let’s make sure our local codes do the same.

For the safety and cost research behind single-stair buildings, see The Pew Charitable Trusts and the Center for Building in North America, “Small Single-Stairway Apartment Buildings Have Strong Safety Record” (February 2025).

Ryan Kilpatrick, AICP, EDFP, is Principal of Flywheel Community Development Services, a Michigan-based community development consulting practice.

Share

Last week Congress did something it hasn’t done at this scale since 1990: it passed a comprehensive, bipartisan housing bill. The Senate cleared the 21st Century ROAD to Housing Act 85–5 on Monday; the House followed 358–32 on Tuesday. Those aren’t typical margins for anything in Washington right now, let alone housing.

I want to walk through what’s actually in House and Senate passed bills and how this may affect the mechanics of getting housing built in Michigan. The national coverage has fixated almost entirely on the one provision that matters least to most of us, and skipped the ones that could change how we work to solve the housing shortage across the Midwest.

What it actually is

This is a supply-side, deregulatory, structural-reform bill. Roughly fifty provisions, most of them stitched together from the Senate’s ROAD bill and the House’s 21st Century Housing Act, plus a handful of new sections. The diagnosis is correct, and Congress deserves credit for understanding the primary issue: we are short four million homes across the country, and the biggest problem is that we don’t build enough of the kinds of housing people can actually afford where most people actually want to live. Most of the bill is an attempt to remove federal friction from building. It does not authorize or appropriate new subsidies.

The case for optimism

ROAD to Housing treats conversion and infill as real strategies, not novelties. The RESIDE provision creates a pilot to help local governments turn vacant commercial and industrial buildings into housing, explicitly prioritizing distressed areas and Opportunity Zones. For those of us who’ve been making the case for adaptive reuse on tired commercial corridors — motel conversions, dead strip retail, and half-empty office complexes — the federal government has signaled that they see these opportunities as viable as well.

Opportunity Zones. The bill encourages HUD to prioritize OZ-based or OZ-serving projects in its competitive housing grants. With OZ 2.0 nominations moving through the OBBBA framework right now, this could be important. The census tracts we designate aren’t just a tax-incentive map anymore, they become a preference in the grant world too.

For anyone currently in the process of prioritizing census tracts for nomination, we have developed a scoring tool to help local and state officials understand which tracts are most in need of investments, and which tracts are most likely to actually see new investments as a result of Opportunity Zone status.

ROAD to Housing rewards many of the local reforms we spend most of our days advocating. The new Innovation Fund — a competitive grant for jurisdictions that can show measurable supply gains — is designed to reward streamlined permitting, density bonuses, and zoning changes. When paired with the Build Now provision tying a slice of CDBG to housing production, there’s now a federal incentive structure behind the missing-middle and zoning-reform conversations. When a planning commissioner asks “why should we upzone?” there’s a new federal incentive to answer that question. If $50,000 in federal funding is all it takes to get local communities to take action, so be it. But don’t forget the same arguments for right sizing local regulations that we’ve been making for over a decade - its a more financially sustainable way to fund community infrastructure, it allows more choice and variety in the marketplace, it offers more opportunities for people to connect with one another socially, and supports greater economic opportunity.

ROAD reauthorizes and loosens restrictions on HOME funds. The HOME reauthorization with added flexibility — including using funds for housing-related infrastructure — is the kind of unglamorous fix that will likely support more investments in places with limited infrastructure. At Flywheel, we strongly encourage clients to use existing infrastructure fully before considering any extensions or expansions. However, we do work with rural clients that are heavily limited by a lack of sewer and water service. This provision could help to resolve some of those service strains.

It cuts genuine federal friction. Streamlined NEPA categorical exclusions, delegation of environmental review to local governments, automatic acceptance of recent LIHTC/HOME/USDA inspections for voucher units, higher FHA multifamily loan limits, the end of the permanent-chassis rule for manufactured homes. All of these will shave incremental time and cost off the deals we’re trying to close.

None of these provisions is anything close to a silver bullet. However, taken together, all of these provisions create a chance to make a meaningful difference. And equally important is the seemingly durable political support for ROAD. A bill that passes 85–5 and 358–32 isn’t likely to be unwound by the next Congress. When so much of the federal government appears to swing wildly from one extreme to the other every four years, this could be a welcome sign of future stability (at least in this narrow field of vision).

Tempered expectations

No new money has been authorized. The bill explicitly authorizes no additional appropriations to carry out its own programs. The Innovation Fund, the planning grants, RESIDE — these are authorizations that have to go win funding in the FY27 appropriations fight against everything else.

The marquee provision is the least useful one. The restriction on institutional investors owning 350-plus single-family homes is the political centerpiece and got most of the coverage. It addresses something like three percent of the single-family rental market. I understand the politics — nobody wants private equity outbidding a family with a cash offer — but as housing policy it’s close to a rounding error in the vast majority of communities, and there’s a credible argument it chills much of the existing capital that rehabs marginal stock and puts it back in service. The attention it’s absorbed is out of all proportion to what it does.

Washington can’t make a local government upzone. If you have concerns about local control being preempted by big government, this bill does not impact a local community’s ability to self-regulate. It simply incentivizes different choices.

There’s a capacity trap baked into the bill. Competitive grants reward jurisdictions that already have the staff and sophistication to chase them. Small cities and townships that need the help most are often the least equipped to win these dollars. Without deliberate technical-assistance support, there is a risk that the gap widens between places that already have momentum and places that don’t.

It’s thin where the need is deepest. This is a supply-and-homeownership bill. It does comparatively little for the lowest-income renters, where the shortage is most severe and where the federal government actually has the most leverage. Supply matters enormously over the long run, but it doesn’t directly provide new affordable housing to a family that is cost-burdened today.

Share

Next Steps

If you run a city or a county, don’t hold your breath waiting for big government funding. Do start getting ready for the types of reform that make sense for your community so that you can compete when the appropriations are available. This means you should assess your zoning ordinance for opportunities to implement best practices for a community of your size. Start documenting the permitting timeline from application to certificate of occupancy. Understand how many more homes could be built in your community if you are able to leverage future federal funding to support reform and process improvement. The Innovation Fund and Build Now both reward places that can show improvement over time. Establishing a measurable baseline and a dashboard for ongoing metrics can take some time to build.

If you’re a developer or a funder, the conversion and OZ provisions are the ones to watch. They line up with where some of the biggest opportunities are going to be - especially on underdeveloped corridors. OZs will reward patient capital.

If you’re tempted to read the coverage and conclude Washington just solved housing: it didn’t, and the people who wrote the bill would tell you the same. Prices haven’t come down, rates are still near six and a half percent. This package will make building easier at the margins and signals that housing is a federal priority again. Both of those are important. Neither of them is a solution.

The most useful thing about this bill might simply be the precedent: Congress proved housing can still move on a bipartisan basis. That’s not nothing. But the work that actually determines whether housing gets built still happens at the local City Council and Township Board, in the statewide QAP, and along local corridors. This bill helps. It doesn’t do the work for us.

More soon. As always, if you want to talk through what might be possible in a specific place, my inbox is open.

hello@flywheelmomentum.com

For you, maybe this is Washington Ave to the pier in Grand Haven. Or maybe it’s Ada Drive. Monroe Center. Cherry Street or Wealthy Street? Or maybe the last time you had that experience you were in Washington DC or Savannah. No matter. It’s a fair question. “Why can’t we have more places like this?”

The answer we tend to give ourselves is a quiet kind of surrender. That’s just how it is over there. We don’t build like that here. People here want their yards and their parking and their privacy. And anyway, even if we wanted something different, the rules and the money and the politics would never allow it. So we take a few photos, enjoy the trip, and drive home to the world we’ve decided we’re stuck with.

That surrender is exactly what Coby Lefkowitz has spent years trying to dismantle. And on August 6, he’s coming to Grand Rapids to make the case in person, closing out the West Michigan Housing Summit with a challenge to everyone in the room: that the places we love most aren’t accidents of history or luxuries reserved for somewhere else. They’re choices. And they’re choices we can still make.

Coby is a developer and writer, co-founder of a firm called Backyard that builds beautiful, walkable, human-scaled neighborhoods in New York and California. He’s also the author of Building Optimism, a book that has reached a remarkably wide audience for something ostensibly about zoning codes and development finance. The reason it resonates, we think, is that it refuses the two postures most housing conversations get stuck in. It isn’t naïve cheerleading, and it isn’t the familiar doom loop where every problem is intractable and every villain is someone else. Instead, it starts from a deceptively simple premise: that the modern built environment so often feels dispiriting not because of some law of nature, but because of a long accumulation of beliefs and decisions—and that beliefs and decisions can change.

His core argument is one we find genuinely clarifying. The most walkable, well-connected, beautiful places in North America have become so scarce and so desirable that they’ve priced out almost everyone. Scarcity didn’t just make them expensive; it stripped them of the diversity and affordability that made them worth loving in the first place.

Coby’s response isn’t to shrug at that, and it isn’t to treat beauty as a frill we’ll get to once the “serious” affordability work is done. It’s to insist on what he calls an abundance of beauty—the idea that living in a fundamentally good place shouldn’t depend on your race or your income, and that the only way to decentralize access to great places is to build a lot more of them.

If you’ve followed this series, you’ll recognize why that lands for us. We keep returning to supply as the throughline running underneath nearly every housing problem—affordability, rents, the slow erosion of the path to homeownership. Coby is making a parallel argument. The scarcity that drives up prices is the same scarcity that makes truly walkable, lovable neighborhoods feel like a vacation indulgence rather than an everyday option. The fix in both cases is more: more homes, yes, but also more of the kind of places people actually want to live in. It’s a both/and, not an either/or. He argues for a marriage of market, aesthetic, and urbanist solutions—not a contest between them.

He’s also unusually honest about how easy it is to get this wrong. He’s written sharply about projects that check every box on the urbanist scorecard—walkable, mixed-use, near downtown, hundreds of units, even a grocery store—and still manage to feel sterile and soulless, because the language of good city-building got misunderstood and then laundered into mediocrity. That distinction matters for a region like ours. As West Michigan grows, we’re going to be tempted by the shortcut version of placemaking, the one that uses the right words on a rendering without delivering the actual experience of a place people love. Coby’s eye for that gap is part of what makes him worth listening to.

There’s a deeper thread in his work that we suspect will resonate with the leaders, neighbors, and skeptics in the room. He treats how a place feels as real data, not sentiment. He points to research—from cognitive neuroscientists studying pedestrians as they move through different streetscapes—showing that blank, lifeless environments produce measurable stress and loneliness, while lively, textured, human-scaled ones do the opposite. We’ve spent a lot of time in this series arguing that community opposition to new housing is usually rational, rooted in real memories of disinvestment and places that got worse rather than better. Coby’s framing offers something hopeful in response: people aren’t wrong to care deeply about beauty and feel. The answer to their fear isn’t to dismiss it. It’s to actually build the good version, and let it speak for itself.

That’s the spirit we want carried into the close of this year’s Summit. The day is built around momentum—moving past the same circular conversation toward coordinated action.

The West Michigan Housing Summit takes place Thursday, August 6, from 12:30 to 6:00 p.m. at GVSU’s Richard M. DeVos Center on the Pew Campus, 401 Fulton Street West in Grand Rapids. Registration is $100, and you can find details and sign up through the Grand Rapids Chamber’s event page.

If you’ve ever stood on a great street somewhere far away and wondered why we can’t have that here—this is the afternoon to stop wondering and start building. We hope you’ll join us.

Subscribe now

We also hear from the developers who didn’t make the list. Some of them have been on the margin of receiving an award for two or three years running. One project we’ve been watching has a half-acre site on a strong corridor, a community-based nonprofit ready to develop it, and a seventy-unit design that could become home to childcare workers, teacher’s aides, nursing assistants, and service workers. Last fall, three years into the project planning, on their second attempt at receiving LIHTC funding, they were three points shy of receiving an award. They’ll try again this year.

Image credit: Jonathan Rose Companies

Subscribe now

That seventy-unit project is what we mean when we talk about affordable housing in this U.S.. Most new housing construction that is referred to as “affordable housing” — housing with capped rents for households earning well below the median income, and a thirty-year compliance agreement filed against the deed — runs through the Low Income Housing Tax Credit program, or LIHTC. It is, by a wide margin, the largest federal program supporting affordable housing. It has financed roughly 3.7 million units since 1987 and currently costs the federal government somewhere between $13 and $15 billion a year in forgone tax revenue. If you’ve ever walked into a newer apartment building anywhere in the country with rents that seemed shockingly reasonable, there’s a strong chance you walked into a LIHTC deal.

A short primer for the people who haven’t sat through a closing. The federal government allocates a fixed amount of tax credits to each state every year on a per-capita basis. State housing finance agencies — MSHDA, in Michigan’s case — then award those credits to developers through an annual competition. The winning developer doesn’t really want the credits in their own hands; they want the money. So they sell the credits to a corporate investor (almost always a bank) in exchange for upfront equity. That equity, layered with a long-term mortgage and a stack of other public sources, is what eventually pays for the building. In return, the developer signs a regulatory agreement that caps rents and limits tenant incomes for at least thirty years.

In practice, the program has become the workhorse for households earning roughly 40% to 60% of area median income. In Kent County that’s a single person earning between $28,000 and $45,000, or a family of three earning between $38,000 and $58,000. These are families with steady paychecks who are nowhere close to what the unsubsidized market is asking — and for whom a well-built LIHTC unit at $850 a month, utilities included, is genuinely life-changing.

But the program does not, on its own, reach the family earning $26,000. That household also needs a voucher or a project-based rental subsidy layered on top of the tax credits, or the math simply doesn’t work. And it doesn’t reach the nurse earning $65,000 from the first post in this series — she’s over the income cap and won’t qualify but may still have a hard time finding something that feels affordable.

Now look at the scale. New construction LIHTC completions average somewhere between 50,000 and 60,000 units per year nationwide. Including preservation and substantial rehab of existing affordable units, the program supports roughly 85,000 to 110,000 units a year. Compare this to the National Low Income Housing Coalition’s most recent Gap report — 7.1 million missing rental homes for households at or below 30% AMI alone. Even if Congress doubled the annual LIHTC allocation tomorrow, and that is not a vote anyone in either party is currently lining up, it would take decades to close the gap at just the deepest end of the market — and that’s before we count workforce, missing-middle, or starter-home need.

Image credit: Homestretch of Northern Michigan

This is what we mean when we say LIHTC is one arrow in the quiver. It is an important arrow. The buildings the program produces are, on the whole, beautiful, well-managed, and durable. The families they house are stable. We need many more of them. But LIHTC has, by accident more than design, become the default answer when an American policymaker says the words “affordable housing.” And the consequences of that default deserve honest attention.

The first consequence is that even the projects that should happen often don’t. State allocations are capped by federal statute. In Michigan, a typical 9% round will receive applications totaling two to three times the available credit. Some states are oversubscribed by four or five times. The Qualified Allocation Plan — the QAP — is the state’s annual rulebook for scoring those applications. Points are awarded for proximity to transit, schools, and jobs; for certain construction standards; for set-asides for specific populations; for deeper income targeting; for the leverage of local resources; and for a long list of other things that get adjusted each cycle. Strong applications usually score within a point or two of one another. A single point can mean the difference between a deal that closes and a deal that doesn’t.

The second consequence is cost. A LIHTC deal almost always costs more per unit to deliver than a comparable market-rate building of similar size and quality. Reasonable estimates put the gap somewhere between 10% and 40%, depending on the market and the structure of the deal. That isn’t a number we use to indict the program — it’s a number we use to plan around it.

Some of the cost gap is structural and, frankly, intentional. To score competitively under the QAP, developers often need to acquire land in higher-cost neighborhoods near transit, schools, and amenities. That’s the right outcome — those are exactly the neighborhoods where the families who win these units most need access — but well-located dirt isn’t cheap, and we are essentially paying a premium for location.

Some of it is paperwork. The legal, accounting, market study, environmental, architectural, and consulting work required to assemble a LIHTC deal is substantial. A typical 9% deal runs through three or four sets of attorneys and a half-dozen specialized consultants before it closes. Those professional fees are a real line on the development budget, and these costs rarely burden market-rate housing developments.

Some of it is the cost of the equity itself. Syndicators — the middlemen who match developers with corporate investors — take a fee. The investors expect a return commensurate with what they could earn elsewhere. Each layer shaves cents off every credit dollar before it actually reaches the building.

And some of it is simply time. A LIHTC deal that takes eighteen months longer than a market-rate deal carries eighteen months of additional carrying costs, predevelopment interest, and inflation on materials and labor.

Stack those together and a building that might be delivered for $250,000 per unit in a clean, market-rate financing structure can easily run $300,000 to $350,000 per unit (sometimes more) when it has to be assembled inside the LIHTC framework. None of that is waste in the moral sense — it’s the price of running affordable housing through the federal tax code instead of, say, an annual appropriation or a direct production subsidy. But it is the price, and it is one of the reasons the program doesn’t scale to meet the need.

We need LIHTC. We need it to keep going. We need it to grow. We also need to be clear-eyed about what it can and cannot do at its current size, its current cost, and through its current process. It cannot, on its own, serve the family earning $25,000 a year. It cannot serve the nurse earning $65,000. It cannot deliver fast enough or cheap enough to be the only tool in the box. And it gets harder, not easier, every year, as construction costs rise faster than the federal credit ceiling.

The next post will focus on workforce households earning 60% to 120% AMI, where the biggest gains can be made via a combination of zoning reform, well-designed gap financing, and a local development community willing to build small. That’s the tier where employers have the most directly at stake, and where the levers are nearly all local.

Leave a comment

But is it actually true in Michigan? I pulled twenty years of data to find out, and the answer is more interesting than the conventional narrative suggests.

Subscribe now

The setup

I looked at four things from 2005 to 2024:

1. Median household income for Michigan (U.S. Census)

2. Median household income for Kent County, the heart of the Grand Rapids metro (U.S. Census, SAIPE)

3. The Consumer Price Index for the Midwest region — the basket of “all the stuff households buy” (BLS)

4. That same CPI broken into two pieces: housing costs (shelter) on one hand, and everything else on the other

The point of splitting the CPI was to test a specific hypothesis. If wages have lagged the cost of living, which costs are outpacing wages? Is it broad-based — food, gas, healthcare, clothes, all of it? Or is one category doing the heavy lifting?

The headline numbers

Over twenty years:

• Michigan median household income rose +73.0%, from $45,930 to $79,460.

• Kent County median household income rose +73.2%, from $46,637 to $80,768.

• The Midwest CPI rose +54.1%.

If you stop reading right there, the conventional wisdom is wrong. Wages didn’t lag the cost of living — they outpaced it by roughly 19 percentage points. In real, inflation-adjusted terms, Michigan households gained about 12% in purchasing power over those twenty years.

That’s not a runaway success story. Twelve percent over twenty years is meager — about 0.6% per year. But it is growth, not loss. And it’s the same answer for the state as for the Grand Rapids metro.

A simple home constructed on a narrow infill lot.

So why does it feel like wages haven’t kept up?

This is where splitting the CPI matters. When you separate housing costs from everything else, the picture sharpens dramatically:

• The shelter component of the CPI grew +78.5% over twenty years.

• Everything else in the CPI — food, transportation, healthcare, apparel, and energy combined — grew just +52.2%.

Housing inflated about 1.5 times faster than everything else households buy. And shelter is a big share of the basket — roughly a third of household spending — so it pulls the headline CPI up substantially even though most other categories grew slowly.

But what about the bottom third?

The median tells you what happened to the household in the middle of the income distribution. It doesn’t tell you what happened to the household struggling near the bottom. So I ran the same analysis for the bottom 20% of households — using national data, since state-level quintile time series at this level of detail isn’t reliably available year-by-year. The national patterns track Michigan closely on this measure.

The result is a kind of paradox.

In nominal terms, the income limit defining the bottom 20% of households in terms of income grew about +74% from 2005 to 2024. Going up from roughly $19,200 to roughly $33,400. That’s almost identical to the median household. After deflating by the same Midwest CPI, the bottom 20% saw real income gains of about +13% — basically the same +13% the Michigan median household saw. Strip housing out of the inflation measure and that real gain rises to about +14%, again mirroring the median.

If income were the whole story, we’d say the bottom 20% has held its own about as well as the middle. Modest, slow, but positive growth.

But income isn’t the whole story. Spending patterns are also part of how cost of living is felt. And here’s where the bottom 20% diverges sharply from the middle: they spend a substantially larger share of their budget on housing.

According to the BLS Consumer Expenditure Survey, the lowest income quintile spends roughly 40% of their household expenditures on housing. The middle quintile spends about 33%. The top quintile spends about 31%.

That difference matters enormously when housing prices grow 1.5 times faster than everything else. The headline CPI weights housing at about a third of the basket, which approximates the typical household. But for low-income households, housing is closer to two-fifths. The inflation they actually experience — what economists call their “personal” inflation rate — is meaningfully higher than the headline number.

So the picture for the bottom 20% in Michigan is this: their income kept pace with the headline numbers, but the cost of living they actually faced rose faster than the headline measure suggests, because housing — which they’re more exposed to — outpaced everything else. The squeeze is the same squeeze that hits the median household, only sharper.

Allowing more homes on the same amount of land is the simplest measure local government can take to address the high cost of housing - not the only measure.

What this all means

The “everything is more expensive” feeling that pervades public conversation is, statistically speaking, not about everything. It’s about housing. Most other categories of household spending have grown roughly in line with — or slower than — wages.

This matters for how we talk about affordability and how we set policy. If the diagnosis is “the whole economy is broken and wages can’t keep up,” the prescriptions tend toward broad income supports, minimum wage debates, and tax policy. Those have their place. But if the diagnosis is “housing costs are the one big category outpacing earnings,” the prescriptions look very different — and they look a lot like the work many of us are already trying to do: zoning reform, infill development, missing middle housing, brownfield redevelopment, financing tools to bring more units online, and protecting affordability where it already exists.

The bottom-quintile data sharpens this conclusion rather than complicating it. If housing-led inflation hits low-income households harder because they spend more on housing, then housing reform isn’t just a quality-of-life issue or a middle-class concern — it’s the most direct anti-poverty intervention available to local government. Every unit of attainable housing produced does double duty: it eases the squeeze on the median household, and it eases that squeeze disproportionately on the households that need it most.

Share

A caveat that makes the story worse, not better

The CPI’s shelter measure almost certainly understates what households actually experience when buying or renting a home. It’s built primarily on Owners’ Equivalent Rent — a survey-based estimate of what owners would charge to rent their homes — rather than home purchase prices or mortgage payments. Michigan home prices, measured by the FHFA House Price Index, have grown substantially faster than CPI Shelter over this period. Rents in Grand Rapids have grown faster too.

So when I say housing accounts for the disparity between wage growth and the cost of living, that’s the conservative version. If we used home prices and mortgage payments — which is what households actually face when they try to buy in — housing’s contribution to the squeeze would look considerably larger, and would look larger still for the renters and prospective first-time buyers concentrated in the bottom of the income distribution.

The bottom line

Michigan wages — at the median and near the bottom — have, modestly, kept up with the headline cost of living over the past two decades. They’ve outpaced inflation in food, transportation, healthcare, and most other categories. The one place where the cost of living has clearly outrun earnings is housing. That single category is where almost all of the lived sense of “we’re falling behind” comes from, and it falls hardest on the households that can least absorb it.

It’s a more focused problem than the headlines suggest. That should be encouraging. Focused problems have focused solutions, and we know what most of them are. The question is whether we’ll do them at the scale and pace the data demands.

Allowing for adequate and diverse housing options to meet the market needs in each community is the way forward.

Data sources: U.S. Census Bureau (median household income, ACS and SAIPE; bottom-quintile income, Current Population Survey), U.S. Bureau of Labor Statistics (Consumer Price Index, Midwest urban and U.S. city average series; Consumer Expenditure Survey for household spending shares; “United States Inflation Experience across the Income Distribution,” 2023). Income data retrieved via FRED. Analysis covers 2005 through 2024.

Leave a comment

Then came the question we get from every reporter. For whom?

That’s the question this series is built around.

We’ve mostly gotten past the argument about whether building more housing helps. It absolutely does. The harder question — the one I get asked every time a housing study comes out — is who it actually reaches.

The 2025 Pew analysis is the cleanest statement of the supply case: “Building more housing—both throughout a metropolitan area and in a particular neighborhood—keeps rent growth lower overall, but it takes the most pressure off of older, less-expensive housing, essentially mitigating the competitive process”.

Evan Mast’s migration-chain research, which we’ve cited often, shows that a hundred new market-rate units at the top of the market free up roughly seventy units in below-median neighborhoods within five years.

In Austin, where developers actually built what the demand curves asked for, Class C rents — the rents most often paid by lower-income households — fell by more than eleven percent. Where supply shows up, rents soften. The evidence is really hard to argue with.

The evidence doesn’t say anything about whether that rent drop reached your neighbors. “Rents softened” and “my people can now afford a place” are two very different statements. If you’re sitting on a city council or running a nonprofit, that gap is where your actions and statements are most important.

Enough diversity and abundance of supply can work for everyone over time. But more supply isn’t enough on its own for the households that need the most help today.

To be abundantly clear on this point - If we are not creating enough supply for every household to have a decent option, then prices are going to continue to rise further and further out of reach. AND - creating more supply without paired subsidies does not meet the needs of our lowest income households.

If you fail to acknowledge that both of these things are true, your community will continue to serve only a fraction of the population with adequate housing.

The National Low Income Housing Coalition’s 2025 Gap report counted 7.1 million rental homes missing from the market for households at or below 30% AMI — in Kent County, that would be a family of four earning $26,500 or less. For every 100 of those households, there are only 35 homes they can actually afford and get into. Most are spending more than half their income on rent. Which means a car repair can quickly escalate to an eviction.

Compare this to Mast’s numbers. A hundred new market-rate units that seem very expensive today will quickly free up around seventy units below the median rent. That’s real — it’s why we keep pushing for more permits and broader zoning. But “quickly” means three to five years. And “below the median” doesn’t mean it’s affordable to the lowest income households.

Again - more housing supply is the simplest, most cost effective way to address the widespread pain of housing unaffordability. It’s just not a silver bullet for low income families who need help today. If your community is struggling to figure out what to do with limited resources, the simplest answer is to make building more options more quickly as easy as possible. Just know that this will only directly benefit middle-income households, and it will indirectly benefit low and moderate income households over the following years. Then, if the community does have some resources to support subsidies, those subsidies can be targeted primarily for very low income households.

There are a lot of folks in our communities who are earning enough money every month that it should be easy for them to find a house or apartment they can afford. Ten years ago, they could have. A registered nurse a couple of years out of school. An electrician. A young project manager at one of the medical device firms on the Medical Mile. They’re all earning $60,000 to $75,000 a year. They’re not poor. HUD calls them “workforce.” But they probably can’t afford to buy a starter home.

These households don’t need a housing voucher or a tax credit. They need a housing option the market hasn’t been allowed to build for forty years. They need a small home on a small lot. A townhouse. A two-bedroom condo or flat within walking distance of work or local amenities.

So, let’s just make sure we’re all on the same page…

We have one group of households that will accept just about any option as long as it costs them less than 40% of their monthly earnings. These families are not served by new supply alone. They need subsidies.

But these families are competing with higher income households for the scarce housing options that are available. Those higher income households would generally prefer something a little nicer, a little newer, and a little closer to the things they care about.

And if those newer options are few and far between, they’ll buy or rent the older and less expensive options — removing them from the grasp of those who need them most.

Different families, different constraints, different fixes. Yet all of it is interrelated.

The Low Income Housing Tax Credit program is another great example. A 9% tax credit deal can produce a sixty-unit apartment building where every unit is capped at rents that are affordable to households earning 60% of the median income or below (serving mostly households earning $35,000 to $55,000 per year). It’s a beautiful outcome. But it doesn’t house the nurse who earns $65,000 per year, and on its own it doesn’t house a single mom earning minimum wage either — that family needs a voucher or a project-based subsidy layered on top of the tax credits.

Image credit: 9% LIHTC development designed by Integrated Architecture

Most communities could still use a whole lot more housing like this. It’s just not enough. It’s a single arrow in the quiver.

Share

Now let’s use zoning reform as another example. Allowing duplexes and cottage courts on lots that used to permit only large single-family homes will, over time, put a lot of workforce units on the ground and, through filtering, ease pressure a few rungs down the market. What it won’t do this year is place a family of four in a home they can afford on $20 an hour.

Each tool fits some households. None of them fits every household. A local official’s job — and their staff — is to know the landscape of resources well enough to use the right tool at the right time and for the right household type. Defending a favorite isn’t a housing policy.

That’s what the rest of this series is for.

The next post digs into workforce housing — the 80–120% AMI tier where zoning reform and modest gap financing do most of the heavy lifting, and where local employers have the most at stake.

After that, we’ll explore the missing middle and the starter-home gap, which is where the long-run supply story actually plays out (mostly by removing prohibitions, not by layering subsidy).

The last post will take the hardest tier seriously: extremely low-income households, where no amount of private production balances the math without public investment. The honest question we have to ask is not whether to subsidize. It’s how deep to go, and where the funding will come from.

The Kent County study narrowed its projected gap by 2.3 percent. Real progress, earned by a lot of quiet permitting and zoning and bridge-financing work on real projects. But the 2.3 percent didn’t fall evenly. Some households felt their rents ease. Some didn’t. The ones who didn’t are still our neighbors.

We can’t afford to continue having arguments about whether to build more housing supply or to provide more financial subsidy to those who need it most. The answer is yes to both. But we have to get better at talking about which households we’re trying to prioritize with which tools, and learn how to use all of the tools effectively at-scale. That’s the work.

The MI Housing Readiness Package would accelerate construction and rehabilitation, require updates to local zoning, and catalyze investments in housing as a talent-retention tool. The bills have bipartisan co-sponsors and real momentum. There will likely still be some changes to the final bills, but more Michiganders are finally understanding just how hard our codes have made it to build anything other than large, single-family homes.

The Michigan Housing Readiness Package requires local zoning to accommodate smaller homes on smaller lots, if local homeowners want homes like this.

But state legislation doesn’t come with much local support when it’s time to actually implement the new mandates. I’ve watched enough state housing legislation land at the local level to know what happens next:

State policy creates obligations. It rarely creates capacity to execute.

Share

The fiscal case most communities aren’t making

Before we get to the design conversation, there’s a fiscal conversation that most municipalities aren’t having — and they should.

Every stretch of road, water main, and sidewalk your community maintains costs the same whether there’s one house on it or three. The pipes don’t know. The pavement doesn’t care. What changes is the taxable value carried by that infrastructure, and therefore the long-term financial sustainability of serving those neighborhoods at all.

More homes on the same stretch of infrastructure produce more taxable value and greater financial sustainability. That isn’t a talking point — it’s arithmetic. Michigan cities built on century-old grids already have the streets, the sewers, and the sidewalks in place. What many of them don’t have is enough rooftops to pay for the upkeep. Adding housing in existing neighborhoods is one of the few tools a community has to strengthen its tax base without raising rates, cutting services, or annexing new land.

The MI Housing Readiness Package isn’t just a permission structure for more housing. It’s a permission structure for a more financially durable municipal model — if communities know what to ask for.

The real fear behind the debate

The fear that comes up in every zoning conversation I’ve been in is the same: Will adding housing destroy the character of our neighborhood?

It’s a legitimate question. It’s also, in most cases, a false choice.

The Michigan places we love most — the walkable downtowns, the tree-lined streets, the mixed-era neighborhoods where a bungalow sits comfortably next to a duplex next to a small apartment building — were almost all built at densities current zoning no longer allows. We didn’t lose neighborhood character by building more housing. In many places, we lost it by making it illegal to build housing the way we used to.

Design requirements can be incorporated into local zoning to ensure unique neighborhood attributes are respected, while maintaining the freedom of the private market to respond to community needs and local household budgets. Massing rules, setbacks that preserve street rhythm, form and material standards, porch and entrance requirements, window-to-wall ratios — these tools let a community define what new housing should look like without dictating who gets to build it or what rent it has to hit.

That distinction matters. Design standards protect neighborhood character. Unit-count caps, bedroom limits, and use prohibitions don’t — they just suppress supply and hand the market over to whoever can afford the delay. Done well, design-focused zoning answers the question “Will this fit here?” with a predictable yes, and does it faster than any discretionary review process ever could.

Four Michigan communities already doing the work

This isn’t theoretical. Several Michigan communities have already updated local zoning to allow more housing diversity and incorporated minimum design guidelines that protect the character of their neighborhoods. Three are worth looking at closely.

Kalamazoo

Kalamazoo began reforming its zoning in 2018, neighborhood by neighborhood, after the city discovered that most of its lots didn’t even conform to the zoning that governed them. The reform has opened the door to missing middle housing — front-to-back duplexes, stacked duplexes, side-by-side duplexes, and fourplexes — across residential neighborhoods that had effectively been locked in to single-family detached homes.

What makes Kalamazoo distinctive is the pre-approved plan catalog it paired with the zoning changes. The city commissioned professionally designed missing middle plans that match the scale, setback, and form of the surrounding neighborhood fabric — so a duplex reads as a house on the street, not as a project. A builder can walk in with a plan the city has already approved and a permit bundle already prepared, cutting months out of the approval process. Up to two accessory dwellings per lot are allowed, and on larger lots, multiple buildings per lot are possible.

The result has been real missing middle housing getting built on real Kalamazoo lots, at a scale neighbors recognize as part of their neighborhood rather than a disruption to it.

Grand Rapids

In 2024, Grand Rapids adopted a package of zoning amendments explicitly aimed at increasing housing supply, diversifying housing types, and improving affordability. The amendments reduced lot area and width requirements for two-family and small multi-family (six units or fewer) developments, expanded where small multi-family is permitted by right on designated residential streets, liberalized ADU regulations, and eliminated parking minimums for small-scale developments near transit.

Crucially, all of this sits inside an existing design and development framework — form standards, traditional neighborhood design standards in the TN districts, setback and massing rules — that keeps the new capacity compatible with the historic fabric of Grand Rapids neighborhoods. More units. Same neighborhood feel. The reform didn’t create a loophole for bad design; it cleared a path for good design that had been blocked by lot-size and use restrictions.

Fennville

Fennville is the smallest of these four communities — a city of roughly 1,400 in Allegan County — and in some ways the most instructive, because it shows what preparation looks like when a community decides to go all the way. In early 2024, Fennville overhauled its zoning ordinance to allow a wider mix of housing types, responding to a 2022 Master Plan that had identified a clear gap in missing middle housing for households earning between 80% and 120% of area median income. The city paired that zoning work with Redevelopment Ready Communities certification from the Michigan Economic Development Corporation and reactivated its Brownfield Redevelopment Authority to make real financial tools available for the projects the new zoning now permits.

Then Fennville did something most communities don’t: it put its own land on the table. In August 2025, the City of Fennville and its Downtown Development Authority issued two RFPs to sell publicly-owned parcels adjacent to the new City Square Park downtown, both of which had been held publicly for more than two decades.

The ~0.8-acre DDA-owned parcel at West Main and West Fennville Streets comes with a vision plan from Opticos Design — the firm that coined the term “missing middle housing” — calling for roughly 20 residential units across a mixed-use building fronting Main Street and a cottage court of duplexes and triplexes on the south half of the site, along with 3,000 square feet of ground-floor retail. The adjacent city-owned lot at 113 W. Fennville Street envisions eight townhomes with garages. Fennville’s approach models the full arc of what preparation actually looks like: not just legal permission, but land, financial tools, design vision, and a public commitment to turn new zoning into actual housing and economic growth.

Ferndale

In December 2024, Ferndale adopted a full rewrite of its zoning code. The new ordinance ended single-family-only zoning as the exclusive residential pattern, opening the door to triplexes, quadplexes, and ADUs across the city — but it did so inside a form-based framework, with height limits, compatibility standards, and design expectations that prevent the caricature of “a tower next to a bungalow” that opponents always warn about.

Ferndale’s code is explicitly rooted in its 2022 Master Plan and is built to advance design, sustainability, and equity values alongside housing diversity. It’s one of the cleanest recent examples in Michigan of a community using a zoning rewrite to deliver housing capacity and reinforce the physical qualities that make Ferndale, Ferndale.

What preparation actually looks like

The communities that will benefit most from the MI Home Program — or any future state housing legislation — are the ones doing preparation work now. Before the bill passes.

In our experience, that preparation has four components:

An honest local assessment — what the community’s housing gap actually looks like, who’s being priced out, and what infill capacity exists on the ground. A zoning audit paired with a local market analysis and neighborhood specific design standards work — identifying where current rules block the housing the community needs, and what design guardrails should accompany any new capacity. A fiscal analysis — understanding how additional housing on existing infrastructure changes the long-term financial picture for municipal budgets. And a community engagement strategy that starts early — building the local trust, and the political coalition, that lets a good project get approved without a lot of hard feelings and political turmoil.

That last one is usually the difference between a zoning reform that looks good on paper and one that actually produces housing.

The window is open now

This is the work we do at Flywheel: helping municipalities translate broad mandates into locally-grounded strategies, build the coalitions they’ll need before they need them, and design policy frameworks that welcome new housing while protecting what’s irreplaceable.

If your community is starting to think through what the MI Housing Readiness Package could mean for you — or if you’re already feeling the pressure of the housing conversation locally and want a sharper way to approach it — I’d welcome the conversation. The communities that prepare early will have more options, and better outcomes, than the ones that react late.

Share

Leave a comment

There’s a question that comes up in every community conversation about housing, and it almost always lands the same way.

“Where would we put it?”

When the discussion turns to building more homes — more affordable homes, more workforce homes, more of the missing middle housing that young families and aging seniors both desperately need — that question tends to stop the room. People look at each other. Someone mentions a parcel on the edge of town. Someone else says that land is too expensive. A third person suggests the old factory site, and a fourth reminds the room it’s contaminated.

The conversation circles. And eventually, most groups arrive at the same conclusion: we want more housing, but we’re not sure there’s anywhere to put it.

When our team is in the room, we do a pretty good job of challenges underlying assumptions and supporting groups through the process of identifying far more opportunities than they ever thought could be realistic. But we’re only able to take on a small handful of clients at a time, and this same issue repeats itself everywhere we go. So, we made a map.

What the Map Shows

This is a basic mapping tool for West Michigan. The goal was simple: identify tax-exempt properties — particularly those owned by faith communities — and understand their distribution, size, and relationship to existing infrastructure.

What we found was striking.

Across the region, there are more than 1,000 properties owned by churches, synagogues, mosques, and other faith-based organizations. Together, they encompass more than 5,000 acres of land — much of it well-located, well-served by existing water and sewer, and sitting at the edges of established neighborhoods where new housing could integrate naturally rather than disrupt.

This is a tighter view that illustrates only properties with direct access to municipal sewer and water service in part of the region (1,850 acres in this image).

Share

This is not unusual. Religious institutions have always been anchors of community life, and historically, that meant owning land — lots of it. What has changed is the math. Attendance at congregations across every tradition has declined. Buildings that once served overflowing Sunday schools now sit empty through the week. Parking lots sized for a congregation of five hundred host a congregation of a hundred and fifty.

The land remains. The mission remains. What’s shifting — slowly, but genuinely — is the question those institutions are asking about the relationship between the two.

This is the neighborhood where I grew up. 64 acres of church-owned land in less than a square mile.

The 10% Question

Here’s the thought experiment I keep returning to:

What if just 10% of those faith communities chose to use a portion of their land to support housing?

Not all of it. Not even most of it. A corner of an oversized parking lot. A vacant lot adjacent to the sanctuary. A wing of an underutilized building converted to transitional housing or affordable apartments.

Ten percent of 1,000 properties is 100 sites. A hundred sites, thoughtfully developed, could house thousands of families. And because these sites are scattered across the region — anchored in neighborhoods, connected to community, already carrying the goodwill of institutions that have served those places for decades — the housing they generate would be exactly the kind communities say they want: distributed, human-scaled, rooted.

The land isn’t the obstacle. It’s already there.

From Vision to Discernment

Of course, a map is not a development plan. And identifying 5,000 acres of potential is very different from unlocking even a fraction of it.

What actually moves faith communities toward action isn’t data — it’s discernment. It’s the slow, sometimes difficult institutional work of asking whether a congregation’s relationship to its property is aligned with its stated values. It’s the conversation between a board of trustees and a pastor about whether stewardship of land means preserving it exactly as-is, or whether it means putting it to work for the community you’ve pledged to serve.

Those conversations are hard. They involve real estate realities, denominational governance structures, financing complexity, and neighborhood relationships. They also involve something more tender: a congregation’s sense of its own identity, its history, and its future.

That’s why we’ve developed a Faith-Based Discernment Guide (Sacred Ground, Shared Purpose) specifically for church leaders navigating this process. The guide walks leadership teams through the key questions: What is your community’s mission, and how does this property serve it? What are the realistic development options given your site’s size, zoning, and location? Who are the right partners — developers, nonprofits, housing authorities — and how do you evaluate them? What does a faithful “yes” look like, and what does a wise “not yet” look like?

The goal isn’t to pressure congregations toward a particular outcome. It’s to give leaders the framework to make a genuinely informed decision — one they can stand behind, explain to their congregation, and implement with confidence.

The Larger Pattern

We’ve written before about corridor strategy as a politically durable path to housing growth — concentrating development along underutilized commercial corridors where infrastructure already exists and neighborhood opposition is lower. Faith-based land is a natural complement to that approach.

Many of the region’s largest church campuses sit precisely at the intersections of those corridors: on arterial roads, at the edges of residential neighborhoods, in locations where modest density feels contextual rather than jarring. They already have the setbacks, the parking, and in many cases the organizational relationships to be good partners in community-scale development.

What they often lack is a roadmap. That’s what we’re trying to provide.

This is an excerpt from a recent report we completed for the City and County of Kalamazoo. Their local team’s identified several properties that were well served by infrastructure where new neighborhoods could be created, or existing neighborhoods could be enhanced. As you can see from the table below the images, these opportunities not only generate abundant housing, but also create much more local revenue to fund services and infrastructure.

Illustration by Sam Weisler.

What’s Actually Required

Here’s the thing about the housing shortage that doesn’t get said often enough: it is not, primarily, a land problem.

Most communities — including ours — have abundant opportunity to build the housing they need. The land exists. The infrastructure exists. The demand certainly exists.

What’s harder to come by is the combination of three things: a vision for what’s possible, a plan specific enough to act on, and someone dedicated to seeing both through.

Faith communities have always understood this dynamic. They know that building something lasting — a congregation, a school, a community institution — requires sustained commitment over time, through seasons of enthusiasm and seasons of doubt. The work of housing development isn’t so different.

The map shows us the opportunity. The discernment guide helps communities decide whether to step into it. The harder work — and the more rewarding work — is what comes next: the partnerships built, the plans drawn, the ground broken, the families housed.

It starts with believing the land is already there and that land could be serving a higher purpose.

Want to explore the mapping tool or request a copy of the Faith-Based Discernment Guide for your community or congregation? [Reach out to the Flywheel Momentum team - hello@flywheelmomentum.com] We’d love to talk.

Subscribe now

I’m pretty sure this scene repeats itself in nearly every community across North America. And I think it represents one of the most significant—and least discussed—opportunities to address our housing crisis.

Rough Numbers

There are somewhere around 380,000 religious congregations in the United States alone. Add Canada, and its closer to half a million. These organizations collectively own more than 2.6 million acres of land.

Much of this property sits in established neighborhoods with existing infrastructure: water, sewer, roads, transit, schools. The land is already zoned (or could be rezoned) for community use. And unlike most developable land, it’s controlled by mission-driven organizations with deep roots in their communities.

As many congregations are undergoing a demographic transformation, a significant and growing portion of this property is vastly underutilized.

Share

A Confluence of Trends

Three forces are converging to create this moment:

1. Declining and Aging Congregations

Mainline Protestant denominations have seen membership decline by 30-50% over the past several decades. Many congregations that once filled sanctuaries now gather a few dozen faithful in spaces built for hundreds. The buildings remain—beautiful, historic, expensive to maintain—while the communities that built them have transformed.

Catholic dioceses are consolidating parishes at an unprecedented rate. Synagogues in suburban areas are merging or closing. Even growing evangelical congregations often find themselves with legacy properties from merged or acquired churches that no longer fit their ministry model.

This means that there are thousands of congregations maintaining buildings and grounds far larger than their current needs require, often at the expense of their core mission.

2. The Housing Affordability Crisis

I don’t need to rehearse the statistics. You know them. You’ve lived them, or watched your children, your parents, or your neighbors live them. And you can always go back to any of my previous posts for more data on this subject.

What’s worth noting is where the crisis is most acute: in established neighborhoods with good schools, transit access, and community amenities. Exactly the places where faith communities have been rooted for generations. Exactly the places where their properties sit.

3. The Search for Meaning and Mission

What gets lost in the hand-wringing about declining religious affiliation is that many congregations are experiencing a profound renewal of mission focus. As attendance-based metrics lose their grip, faith communities are asking deeper questions: What are we here for? How do we serve our neighbors? What does faithful stewardship look like?

For many, the answer is staring at them from across the parking lot.

What’s Already Happening

This isn’t theoretical. Across North America, faith communities are already transforming their properties into housing:

• Trinity Church Wall Street in Manhattan developed hundreds of units of affordable housing on church-owned land, maintaining their historic sanctuary while creating homes for families who could never otherwise afford to live in Lower Manhattan.

• The Episcopal Diocese of Los Angeles has committed to developing 5,000 units of affordable housing on diocesan property over the coming decade.

• Catholic Charities organizations nationwide operate thousands of units of affordable and supportive housing, often on properties originally built for other purposes.

• The United Methodist Church has made church-land housing a denominational priority, with conferences across the country exploring development opportunities.

In my own work in Michigan, I’ve seen congregations transform aging education wings into permanent supportive housing, partner with developers to build affordable apartments on unused parking lots, and reimagine entire campuses as mixed-use communities that blend housing, worship space, and community services.

The Inner City Christian Federation in West Michigan has a close partnership with dozens of faith-based communities ready to explore housing on their properties. Most recently, they completed the Seymour Condominium project which created 27 new affordable owner-occupied units on property formerly owned by Tabernacle church. And now, their Building With Faith campaign will help them to expand this work to another 200+ housing units in the region.

ICCF Seymour Condominiums. Photo credit to Crains Grand Rapids.

Why This Matters Beyond Housing

When done well, faith-based housing development creates value far beyond the units themselves:

For congregations: It transforms a liability (expensive, underutilized buildings and land) into an asset that generates mission impact and often revenue. It creates natural connections with new neighbors. It gives concrete expression to values that might otherwise remain abstract.

For communities: It adds housing without displacing existing residents or requiring greenfield development. It preserves community anchors that might otherwise close. It often includes community space, services, or programming that benefit the broader neighborhood.

For housing systems: It unlocks land that’s often available below market rates (or donated entirely). It brings values-aligned partners to the table—organizations that care about who lives in the housing, not just whether the rent gets paid. It often comes with built-in community support and volunteer networks.

For the people who live there: Faith-based housing developments frequently offer more than shelter. They offer community. Connection. A sense of belonging that’s harder to find in a conventional apartment complex.

The Catch: It’s Complicated

If this opportunity is so obvious, why isn’t every church building affordable housing?

Because it’s hard. Really hard.

Affordable housing development is among the most complex undertakings in real estate. It requires navigating Byzantine financing structures (tax credits, subsidies, loans from multiple sources), extended timelines (3-5 years from concept to occupancy is common), and regulatory requirements that would make a tax attorney weep.

Most congregations have no experience with any of this. They don’t know what they don’t know. And the affordable housing industry, while well-intentioned, often struggles to communicate with faith communities in ways that build trust and understanding.

The result is a pattern I’ve seen repeated dozens of times:

1. A congregation gets excited about housing.

2. They approach it the way they’d approach a building campaign or a new ministry program.

3. They define what they want without understanding what’s possible.

4. They encounter the realities of development finance and zoning.

5. They get frustrated, disillusioned, or make commitments they can’t keep.

6. The project either dies or damages relationships that took years to build.

The problem isn’t the vision. It’s the process.

A Different Approach

The congregations that succeed—the ones that actually get housing built and feel good about it afterward—tend to share a few characteristics:

They take their time. They recognize that discerning whether and how to pursue housing development is different from actually doing the development. They separate the question of “should we?” from the question of “how do we?”

They engage expertise early. They don’t try to figure out affordable housing finance on their own. They bring in consultants and development partners early—not to sell them on a project, but to educate them about what’s possible.

They listen broadly. They don’t let the loudest voices in the congregation drive the conversation. They create structured processes for hearing from longtime members and newcomers, neighbors and community stakeholders, skeptics and enthusiasts.

They distinguish between non-negotiables and preferences. They get clear about what they absolutely require (the sanctuary must be preserved; we must continue to operate our food pantry) versus what they’d prefer but could flex on (we’d like 50 parking spaces, but maybe 25 would work with on-street parking).

They define success carefully. They know what they’re trying to accomplish—and what they’re not. They can articulate their vision in a way that a development partner can actually work with.

Excerpt from our Faith-based Housing Discernment Guide.

A Resource for the Journey

Over the past year, I’ve been working on something to help congregations navigate this discernment process. It’s called the Faith-Based Housing Discernment Toolkit—a comprehensive set of resources designed specifically for faith communities considering housing development on their property.

The toolkit walks congregations through a structured discernment process: forming a team, engaging professional expertise at the right time, facilitating congregational conversations, engaging neighbors, and ultimately defining the parameters that will guide any future development partnership.

It’s not about convincing congregations to do housing. It’s about helping them figure out whether housing is right for them—and if so, what kind of housing, under what terms, with what partners. And, this guide helps the faith community understand how valuable an experienced partner can be in this process.

I’ve learned that the congregations that rush into housing development often regret it. The congregations that take the time to discern well—to really understand what they want and what’s possible—build projects that serve their communities for generations.

If your congregation is sitting on underutilized property and wondering what’s possible, I’d encourage you to explore the toolkit. And if you know faith leaders who are wrestling with these questions, I’d be grateful if you’d pass this along.

The housing crisis won’t be solved by faith communities alone. But it won’t be solved without them either. The land is there. The mission is there. What’s needed now is the wisdom to bring them together well.

Share

The Faith-Based Housing Discernment Toolkit is available here. For information about workshops and consulting services, contact Flywheel Community Development Services.

Ryan Kilpatrick is a community development consultant specializing in housing policy, faith-based development, and neighborhood investment strategy. He is principal at Flywheel Community Development Services in Grand Rapids, Michigan.

Leave a comment

The council members look exhausted. They know the numbers. They know the city needs housing — the waiting list for affordable units is eighteen months long, teachers are commuting from two towns over, and the elementary school lost forty students last year because young families can’t afford to stay. But they also know what happens when they vote yes on a project like this. The emails. The yard signs. The challenger in the next election who promises to “protect our neighborhoods.”

So they table it. Again. And the planning director drives home wondering why she even bothers updating the comprehensive plan.

Share

This scene plays out in communities across the country. And most communities are having the wrong conversations in the wrong places at the wrong times.

When a community only addresses housing on a project-by-project approval basis, every proposal becomes a referendum on change itself. And for most people, when the question is framed as significant change without tangible benefits, the answer is no, regardless of what the long term cost to the community might be.

But what if the questions (and answers) were framed differently?

Instead of asking residents to accept awkward and seemingly haphazard density on a project-by-project basis, communities can work collaboratively with existing and future neighbors to illustrate how investments in the right places are able to bring the things they’ve been asking for — a neighborhood coffee shop and bakery, a shorter commute for their kids’ teacher, an apartment where their aging parent could live close by, or a place where their adult children can finally establish a foothold and start to make progress toward financial independence.

Image credit: Flywheel Community Development Services rendering of a pocket neighborhood on two platted lots, illustrated by Sam Weisler.

Most communities have an abundance of opportunities but not enough time or capacity to demonstrate what’s possible. It’s the aging strip mall with a half-empty parking lot. The community church that owns 20 acres of land but only uses three. The four-lane road lined with auto shops and storage units, served by water and sewer (and bus) lines that could accommodate ten times the current demand. The corridor that everyone drives through but almost no one goes to — not because it couldn’t be a place worth being, but because no one ever planned for it to be.

These aren’t the neighborhoods people are trying to protect. They’re the leftover spaces — economically underperforming, physically disconnected, often blighted by decades of auto-oriented development that never quite delivered on its promise. And yet they sit on some of the most valuable infrastructure a community owns.

The opportunity is enormous. But it requires a shift in strategy — from parcel-by-parcel defense to district-scale vision and proactive execution.

We’ve worked with communities that have made this shift, and the process is capable of producing astounding results that a majority of the community supports.

It starts with mapping. Not just zoning maps, but a layered picture of what actually exists: where the water and sewer capacity is; where transit already runs (or could with the right development pattern); where vacancies cluster; and where the market has already started to show interest but no one can quite make sense of what to do next. We overlay that with constraints — floodplains, slopes, wetlands, conservation easements, historic districts, and current zoning standards.

What emerges is a picture of opportunity that most residents have never seen. The corridor that everyone assumed was “just commercial” turns out to have enough infrastructure capacity and land availability to support hundreds (or thousands) of new housing options without a single pipe upgrade. The intersection that feels like nowhere is actually a ten-minute walk from the high school, the library, and the regional employment center. The parcels everyone ignores are the ones with the fewest barriers to redevelopment.

We worked with the City and County of Kalamazoo to identify more than 17,000 acres of vacant and underutilized properties with significant development potential and ready-access to utility infrastructure. If local neighborhoods can select just 6% of these places as priorities for infill development, they will be able to accommodate the next 20 years of county-wide demand while creating more sustainable and vibrant neighborhoods in the process.

Then comes the market assessment — and this is where communities often get tripped up. The question isn’t just what could be built. It’s what will be built, by whom, and under what conditions.

Some sites will pencil for private developers without any public intervention. Others will need tax increment financing, land assembly assistance, or density bonuses to attract investment. Still others — particularly sites intended for housing at lower income levels — will require direct subsidy or public-private partnerships that the market alone will never deliver. A corridor strategy distinguishes between these categories clearly, so that public resources aren’t wasted on projects that would have happened anyway, and aren’t withheld from the ones that genuinely need help.

Finally, the community sees what transformation could look like — not in abstract renderings, but in human terms. This is where a hundred and twenty new condos or apartments could go, with ground-floor retail sized for the bakery that’s been looking for a modest space at an affordable rate. This is where sixteen townhomes could offer young families their first chance at ownership in a neighborhood with good schools. This is where senior housing could allow long-time residents to age in place, walking distance from the pharmacy, the local breakfast joint, and the coffee shop where they’ve been regulars for decades.

The shift is subtle but profound. Instead of asking people to accept housing somewhere, you’re showing them the housing their community actually needs — and where it fits.

This 48-acre site is currently only 18% utilized. Where there is now a sea of parking that is rarely used, we illustrate a full-service neighborhood that generates 6 times the tax revenue and 1,600 new homes for young families, seniors, and local workers. The neighborhood investment is planned in phases to support established businesses while creating a new and dynamic sense of place over time. The above rendering likely requires a 15+ year development timeline, but it becomes a multi-generational asset well into the future.

There’s another piece of this story that communities rarely hear, but often becomes the most salient part of the conversation.

Most local governments are facing a slow-motion infrastructure crisis. The roads, water mains, and sewer systems built in the postwar expansion are reaching the end of their useful lives, and the development patterns that created them don’t generate enough tax revenue to pay for their replacement. A mile of residential street serving forty single-family homes costs the same to repave as a mile serving four hundred mixed-income residential units — but the tax base from the single family homes is just a fraction of what will be needed to adequately repair or replace the existing infrastructure.

This is the math that no one talks about at city council meetings, but it shapes everything. Communities defer maintenance. They apply for grants. They raise fees. And still the gap grows.

Corridor-focused development changes that equation. When you add housing and commercial activity to land that’s already served by infrastructure — land that’s currently generating minimal tax revenue — you’re not just solving a housing problem. You’re building the fiscal foundation that lets a community maintain the services its residents already depend on.

A small community church and a functionally obsolete strip-mall can be transformed into homes for almost 100 families (both owner occupied and rental options). We leave the worship space in tact and move the retail closer to the street while widening the sidewalk and planting more trees. The result is an estimated 24-fold increase in taxable value and a strong sense of place.

We’ve seen corridors where redevelopment increased the taxable value per acre by ten-fold within five years. Not because of luxury development or displacement, but because underutilized land finally started pulling its weight. The revenue didn’t go to new programs or expanded government. It went to fixing the roads, upgrading the water treatment plant, and keeping property taxes stable for everyone — including the neighbors in the single-family homes just a few blocks away.

This is a sustainability argument. Communities that focus growth in the right places can afford to remain strong communities. The ones that don’t will slowly hollow out — losing young families to more affordable regions, losing services to declining revenue, losing the very character they were trying to protect.

There’s a version of this story that ends well.

It’s a community where the arterial road that used to feel like a barrier now feels like a seam — a walkable, tree-lined corridor with apartments above shops, small offices in renovated buildings, and a farmers market on Saturday mornings. It’s a place where the teacher lives four blocks from the school, where the retiree can walk to the pharmacy, where the young couple who grew up here can finally afford to stay.

It’s also a community that protected the things worth protecting. The farms and open spaces at the edge of town remained open and rural — not because of regulation alone, but because the development pressure was absorbed in places that could leverage that pressure to make a place that is truly valued by the community.

This isn’t utopia. It’s just good planning — the kind that starts with a clear-eyed look at what a community has, what it needs, and where the two can meet.

More communities should be asking for it. The tools exist. The need is urgent. And the places that figure this out first will be the ones that remain places worth living for generations to come.

Share

If your community is in need of a new, proactive approach to address local or regional housing needs and financial sustainability, reach out to our team.

email: hello@flywheelmomentum.com

web: www.flywheelmomentum.com/corridor-strategy

The data tells a different story. And for policymakers with the ability to influence housing supply in their communities, understanding that story is essential.

The Core Problem: Too Many Renters, Not Enough Rental Housing

Rents are rising faster than wages in most American communities for a straightforward reason: demand for rental housing outpaces supply. When more households are looking for apartments than there are apartments available, landlords can charge more. This isn’t complicated economics—it’s the same dynamic that drives prices in any market where buyers outnumber sellers.

The National Low Income Housing Coalition’s 2025 Gap report quantifies the scale of the problem. For every 100 extremely low-income renter households in the United States, only 35 affordable and available rental homes exist. That’s a shortage of 7.1 million units nationally. The result is that three-quarters of renters with extremely low incomes spend more than half their income on rent.

This shortage exists in every state, from Nevada (with just 17 affordable and available homes per 100 extremely low-income renters) to North Dakota (with 62). Major metropolitan areas like Las Vegas, Dallas, Austin, San Diego, and Houston all have fewer than 20 affordable and available homes for every 100 of their lowest-income renters.

How New Supply Helps Everyone—Including Lower-Income Renters

Here’s where the research gets interesting, and where conventional wisdom often gets it wrong.

A 2025 analysis by The Pew Charitable Trusts examined rent changes across more than 1,600 ZIP codes in U.S. metropolitan areas from 2017 to 2024. The findings were clear: every 10% increase in a metropolitan area’s housing supply correlated with rents growing 5% less over that period. At the neighborhood level, a 10% increase in a ZIP code’s housing supply meant average rents grew 1.4% less than in ZIP codes with no new supply.

But here’s the part that should command policymakers’ attention: rent growth slowed most for Class C units—the older, less expensive apartments that lower-income households most often live in.

Subscribe now

The research from the National Multifamily Housing Council confirms this pattern. Their analysis of markets across the country found that metros with higher levels of new apartment construction—even though most new buildings are classified as 4- or 5-star luxury units—experienced lower rent growth among 1- and 2-star apartments. The filtering effect is real: when higher-end units are available, households who can afford them move into them, reducing pressure on the more affordable housing stock.

To be clear - building more market-rate housing supply is not enough in the short term. There will still be far too many families who cannot afford the rent. AND - failure to build enough housing supply to match regional demand will only make the problem worse.

The “Moving Chain” Mechanism

Economist Evan Mast has done pioneering work documenting exactly how this works. When a new market-rate apartment building opens, its residents typically move in from other neighborhoods. The units they leave behind then become available to other renters, who vacate their own units, and so on down the chain.

Mast’s research found that building 100 new market-rate units in higher-income neighborhoods leads to approximately 70 housing units becoming available in below-median-income neighborhoods within about five years. A follow-up study from Helsinki using comprehensive population data found similar results: new market-rate construction “loosens the housing market in middle- and low-income areas even in the short run.”

Research from Brian Asquith, Mast, and Davin Reed examined new apartment construction in 11 cities and found that large market-rate buildings in lower-income neighborhoods reduced nearby rents by 5 to 7 percent relative to what rents would have been without the new construction. Their conclusion is direct: “There is not a tradeoff between regional and local housing affordability. New construction benefits both.”

Austin: A Case Study in Supply Economics

For policymakers who want to see these dynamics playing out in real time, Austin offers a compelling example.

After years of explosive growth and skyrocketing rents, Austin permitted more housing units per capita than any other major Texas city. The results have been dramatic. According to CoStar data, Austin saw the lowest rent growth among the 150 largest U.S. metros in Q1 2025, with rents declining 4.2% year-over-year.

The Pew analysis found that from 2023 to 2024, rents in Austin declined across all building classes—but the steepest drops were in the most affordable buildings. Class A luxury apartments saw rents decline 2.6%. Class B buildings saw a 5.9% decline. And Class C apartments—the units most often occupied by lower-income households—saw rents fall 11.4%.

While the Austin metro region still has a lot of work to do to reach true housing affordability for the majority of families, the impact of abundant new housing supply is real and encouraging.

As the National Multifamily Housing Council noted in their research, “Austin is not an exception to the rule; Austin is the rule.” The relationship between supply and rent growth applies everywhere. Austin simply built enough to make the effect visible.

Similar patterns are emerging in other high-supply markets. Florida cities like Fort Myers, Sarasota, and Daytona Beach are seeing Class C rent declines of 10-12%. Orlando, Jacksonville, and Tampa have experienced rent decreases of 4-5% in their most affordable housing segments.

Why Subsidized Affordable Housing Alone Cannot Solve the Problem

None of this means we should abandon efforts to build subsidized affordable housing. We absolutely need more of it. But policymakers need to understand the scale mismatch between subsidized production and actual need.

The Low-Income Housing Tax Credit program—by far the largest federal subsidy for affordable rental housing—produces between 50,000 and 60,000 new units annually. That’s 3 to 5 percent of all new housing completed in the United States. Since its creation in 1986, LIHTC has supported approximately 3.5 million units total.

Meanwhile, the national shortage of affordable housing for extremely low-income renters alone is 7.1 million units. Even if we doubled LIHTC production, it would take generations to close that gap through subsidized construction alone. I would love to see a doubling (or tripling) of LIHTC allocations, and it would still not be enough on its own to solve for housing affordability across the country.

A recently completed LIHTC development in the Belknap Neighborhood of Grand Rapids MI. Photo courtesy of Integrated Architects.

And the economics of subsidized construction are challenging. The amount that extremely low-income renters can afford to pay doesn’t cover the development and operating costs of new housing. LIHTC projects frequently require multiple additional funding sources—HOME funds, project-based Section 8 subsidies, state programs, local gap financing—to pencil out. Many of these complementary programs have shrunk in recent years, making it harder to complete affordable projects even when tax credits are available.

What Policymakers Can Actually Do

Understanding the research leads to a clear conclusion: communities need both subsidized affordable housing and market-rate housing at scale. Supporting one at the expense of the other undermines housing affordability for everyone.

For policymakers looking to support affordable housing production, several tools are available. Advocating for increased funding for LIHTC and complementary programs like HOME and the National Housing Trust Fund. Providing local gap financing to help proposed affordable projects become financially viable. Streamlining permitting and approval processes to reduce development costs and timelines for all new housing. Attaching project-based vouchers to affordable developments to serve households with extremely low incomes.

But these efforts won’t be sufficient without parallel support for market-rate housing. The research is unambiguous: building more housing—even expensive housing—reduces rent growth in older, more affordable buildings by reducing the competition for them.

That means examining local zoning and land use regulations that constrain housing production. It means reconsidering parking minimums, lot size requirements, and height restrictions that add cost and complexity to housing development. It means reducing permitting timelines that can add years and significant expense to projects. It means saying yes to housing proposals that meet code requirements, even when neighbors object.

The Both/And Approach

The housing affordability crisis facing American communities is too severe for ideological purity. We need every tool available: subsidized production for households who cannot afford market rents under any circumstance, and market-rate production to relieve pressure on the existing affordable housing stock.

The evidence shows that building market-rate housing does help lower-income renters—not through some abstract trickle-down theory, but through the concrete mechanism of migration chains that free up housing throughout the market. Every household that moves into a new apartment is a household that is no longer competing with lower-income families for older, more affordable units.

Policymakers who genuinely want to improve housing affordability in their communities should support housing construction at all price points. The research supports it. The math demands it. And the families struggling with rent increases every year deserve nothing less.

An elementary school teacher commutes forty-five minutes each way because she can’t afford to live anywhere near her school. And the school principal is having a hard time hiring for two more open classrooms because the district can’t afford to pay enough that young teachers can live close by.

A retired couple, ready to downsize after the kids have moved out, discovers there’s nothing smaller available in the neighborhood they’ve called home for thirty years—just more large single-family houses like the one they’re trying to leave. They have plenty of equity but they still feel trapped in a house that no longer suits their needs.

A young family stretches to pay the rent on a one-bedroom apartment, their toddler’s crib wedged into the corner of their bedroom, waiting for something bigger to open up that doesn’t blow their budget.

These stories are true in most communities across North America today. There is very little question about whether or not some households are struggling. However, these anecdotes do not explain the depth or breadth of the issue. They are snapshots that are relevant, but not the whole story.

If your community is ready to gain a better understanding of how many households are stretched thin, how many households are trying to move in, and what the variety of housing needs looks like - at every price point - a housing needs assessment is your next step.

Share

What Is a Housing Needs Assessment?

A housing needs assessment is essentially a comprehensive inventory and forecast of a community’s housing situation. It examines who lives in your community today, who works in your community, what kinds of homes exist, what’s missing, and what will be needed in the years ahead.

Think of it as a community checkup that answers fundamental questions:

Do we have enough starter homes for young families?

Are seniors aging in place because they want to, or because there’s nowhere else to go?

Are essential workers—teachers, nurses, firefighters—able to live in the communities they serve?

A thorough assessment typically examines several dimensions. It looks at demographic trends, including population growth, household size changes, and age distribution shifts. It analyzes the existing housing stock by type, age, condition, and price point. It evaluates affordability by comparing local incomes to housing costs across rental and ownership markets. And it projects future demand based on employment trends, migration patterns, and household formation rates.

How Assessments Reveal Market Dynamics

The real value of a housing needs assessment lies in what it reveals about the gap between supply and demand.

In Ottawa County, Michigan we hired Bowen National Research to conduct our first housing needs assessment in 2018 and discovered that the community had a significant shortage of rental options priced affordably for middle-income households. At the time, we needed a whole lot more studio and one-bedroom apartments for all the young professionals who were taking jobs in manufacturing, engineering, education, and the medical fields.

What we learned was that because the region had not built enough rental housing over the previous two decades, these new young professionals who were entering the market were now outcompeting families who had been renting in the community for years.

While there was extraordinary demand for small-scale apartment options like this studio unit, there was almost nowhere in the County where it was permitted to be built.

Until that point, most of our rental product was two-bedroom apartments and median rent had been steady at around $700 or $800 per month with average increases of roughly 2% per year. That older rental housing was working out okay for young families who were saving up to buy their first home. Some of it was getting a little tired, but property owners were generally keeping up maintenance and care for the properties.

However, from 2012 - 2018, there was fairly significant job growth in the region with a large share of those jobs going to young, single adults. These were often college grads with technical degrees or four-year degrees who were making $50k - $60k per year AND they were perfectly happy to share a two-bedroom apartment with a friend.

Think about this for a minute. A single mom earning $30,000 per year could just barely afford that two-bedroom apartment at $800 per month. And now she has to compete with a couple of 25-year olds who are earning $50k per year - EACH!

As you can imagine, local rental property owners quickly understood this dynamic and their rates began to rise. The same apartment that was $800/mo in 2015, rented for $1,100 in 2018.

These young college grads could technically have afforded $2,500 per month in rent with their combined incomes, but there weren’t any nice new apartments available. Just the same old stuff from the 80s and 90s. What other choice did they have?

We Get the Housing We Zone For

At the time, I was leading an organization called Housing Next - a non-profit initiative of the local United Way that was dedicated to solving housing challenges for the workforce and ALICE population.

As soon as we had the data from our housing needs assessment, we were able to begin unpacking why there was such a shortage of rental options available. If we had thousands of young people earning $50k per year who wanted to rent something in the region, why wasn’t the market responding to that demand and building it? Why were these young college grads competing for older, family-oriented apartments?

These questions were truly perplexing to a lot of local leaders at the time. But as we then dug into the local ordinances across the county, we began to understand. We created the following two slides to illustrate what was actually going on back in 2018.

Looking back at these numbers, prices in 2018 seem astoundingly affordable. But at the time, we could all see that a crisis was brewing. Locally, 40% of renters were cost-burdened and that number was growing. In a region where we had long taken great pride in being one of the most family-friendly places in North America, many local families were being priced out.

The worst part was, this was a crisis of our own making. Local employers were paying good wages. But our standards of development were boxing out many of the households we needed most to keep our community running. Grocery store managers, day care workers, and most of the service industry could no longer afford to live here.

So, because we had a housing needs assessment in hand that told us where we were falling short, we began a multi-year campaign to encourage local units of government to amend their zoning ordinances and allow more rental options. And, we knew enough about local land use infrastructure to understand that we didn’t need massive rezonings of entire neighborhoods - we needed about another 1% of the land area to be available for more housing options. We also knew that it would make the most sense if we focused on places that were already close to existing community amenities, infrastructure, and jobs centers.

Skipping ahead a few years, we expanded to a multi-county regional focus and we were able to catalyze more than 6,500 new housing units that would not have been legal to build prior to our efforts. We also leveraged the ARPA funds in two counties to establish an $82M revolving fund focusing on workforce housing and child care.

Hooray for us!

But not so fast. Because we care about the data, we renewed our housing needs assessment twice in the intervening years. The most recent housing needs assessment revealed that we had indeed done the work necessary to solve for adequate rental options for the workforce. That if we kept pace with what we had started, our local market would be able to fully catch up and we would find some equilibrium in the market.

However, while we were focused on creating more rental options for our workforce, the homeownership market skyrocketed. Our post-COVID housing needs assessment revealed that we had essentially lost ALL of our starter home stock. There was no longer anything priced below $250,000 and most new homes being built were priced closer to $500,000.

So, once again, we dove into the data and discovered that the vast majority of homes being built were 2,400 square feet or larger and most of the land zoned for new homes required large lots of an acre or more - even when served by public infrastructure.

This is a problem that our local communities are still in the process of tackling, but Ottawa County recently released its Small Footprint Homes Initiative - an effort to demonstrate the power of small.

Leadership in Ottawa County has acknowledged that there are tens of thousands of households comprised of single adults, couples without children, or families with just one child at home. Some of these households will choose big homes, but many would love a smaller option if it were both available and affordable. The Small Footprint Homes Initiative strives to encourage local communities and builders to focus some of their energy on enabling these options in the community.

Note that these are NOT tiny homes. While there is a place in the market for tiny homes, its generally a very small segment of the market that is satisfied with something tiny. Small homes, however, had been roughly 30% of our housing stock throughout much of the 20th century. In the post-war building environment of the 1950s, more than half of all new homes built were 1,200 square feet or less.

From Assessment to Action: Adjusting Local Policies

Understanding your housing landscape is only valuable if it leads to meaningful response. Here’s how communities can translate assessment findings into policy action.

Aligning Zoning with Identified Needs

If an assessment reveals a shortage of smaller, more affordable housing types, communities can examine whether their zoning actually permits such housing to be built. Many communities discover that their codes effectively prohibit the “missing middle” housing—duplexes, townhomes, small apartment buildings—that would address their most pressing gaps. Adjusting use permissions and dimensional standards to allow these housing types in appropriate locations is often a logical first step.

Calibrating Incentive Programs

Communities often offer incentives like density bonuses, tax abatements, or expedited permitting to encourage desired development. Assessment findings can help target these incentives more precisely. If the data shows a particular need for workforce housing or senior-accessible units, incentive programs can be designed or adjusted to specifically encourage those types.

Informing Infrastructure Investments

Housing needs assessments often highlight geographic patterns—areas where housing could grow if infrastructure supported it, or neighborhoods where aging systems constrain development. These findings can guide capital improvement planning, ensuring that water, sewer, and transportation investments align with housing goals.

Shaping Preservation Strategies

Not all housing needs are met through new construction. Assessments frequently reveal that existing affordable housing is at risk—older apartment buildings that might convert to higher-cost uses, or manufactured home communities facing redevelopment pressure. Armed with this knowledge, communities can develop preservation strategies before these units are lost.

Setting Realistic Goals and Measuring Progress

Perhaps most importantly, a housing needs assessment gives communities a baseline against which to measure progress. Rather than vague aspirations to “improve affordability,” communities can set specific targets—adding a certain number of units in a particular price range over a defined timeframe—and track whether policies are producing intended results.

Making It Work

The most effective housing needs assessments share a few characteristics. They engage community members in defining what “need” means locally, rather than relying solely on technical definitions. They’re updated regularly—housing markets shift, and a five-year-old assessment may no longer reflect current conditions. And they’re treated as living documents that inform ongoing decision-making, not reports that sit on shelves.

When done well, a housing needs assessment transforms abstract debates about development into grounded conversations about community priorities. It helps residents see that their individual housing challenges connect to broader patterns—and that thoughtful policy responses can make a real difference.

The teacher, the retired couple, the growing family—their stories don’t have to end with frustration. A community that understands its housing needs is a community equipped to address them.

Share

If your community is looking for a partner to conduct a housing needs assessment, or you have a recent assessment but the community is struggling to identify how to take action on the data, Flywheel is designed to help local cities and counties take concrete action and build momentum toward healthier communities. Reach out at hello@flywheelmomentum.com

Leave a comment

Share

Many conversations about housing quickly become polarized. Some people resist any change and blame greedy developers. Others push for rapid transformation that feels overwhelming to longtime residents. Meanwhile, everyone struggles to understand why housing has become so expensive, why their kids can’t afford to live nearby, or why promising development projects seem to stall or create conflict.

Our goal is different. We want to create shared understanding about how housing markets actually work, what drives affordability, and how communities can manage change at a scale and pace that works for local residents now and into the future.

Over the coming months, we’ll explore how housing supply, affordability, community development, and economic vitality are interconnected. We’ll look at what’s broken, what’s working, and most importantly, what realistic solutions look like in practice. No silver bullets. No wishful thinking. Just honest conversation about tradeoffs and achievable pathways forward.

Rose Villa Garden Grove Senior Housing - Scott Edwards Architecture

Something Has Shifted

You’ve probably noticed something doesn’t quite add up anymore:

Maybe your kids moved out but can’t afford to live anywhere near where they grew up. The apartments that exist are too expensive, and there simply aren’t enough of them anyway.

Or, maybe your business is struggling to find workers because people can’t afford to live close enough to commute reasonably. You’re paying competitive wages, but housing and transportation costs leave little left for a decent quality of life.

Maybe you’re thinking about downsizing now that the house feels too big. But when you look at what’s available—and what it costs, and what your new property taxes would be—you’ve decided to just stay put, even though it doesn’t really fit your needs anymore.

Your neighborhood feels stuck. Properties that should turn over stay in the same hands for decades. Young families can’t move in. The elementary school is half-empty. Local businesses close because there aren’t enough customers within walking distance.

If any of this resonates, you’re observing symptoms of a fundamental mismatch between how many homes we have and how many people are looking for an affordable place to live. And here’s what makes it complicated: the solutions require change, but change managed thoughtfully at a scale and pace the community can absorb productively.

The Uncomfortable Math

Let’s be direct about the core economic reality, because understanding this is essential to any productive conversation about solutions:

When a lot of people want something and there isn’t enough to go around, prices rise. Period. Full stop.

This is the fundamental driver of our housing affordability challenge. Yes, there are other factors—rising construction costs, labor shortages, interest rates, inflation. But these all operate within the basic dynamic of supply and demand. When housing is scarce, property owners have more economic power to raise prices. When housing is more abundant, renters and buyers have more power to demand better value.

This has been a truism of economics for centuries, but it wasn’t until recently that we had robust peer-reviewed research demonstrating this specific to local and regional housing markets. Study after study shows the same pattern: cities that add housing at a pace roughly matching or exceeding household growth quickly see more stable, affordable prices. Cities that restrict housing supply see prices spiral beyond what many middle income residents can afford.

Here’s the part that makes people uncomfortable: we can’t improve housing affordability without adding more housing. And adding housing means change.

The question isn’t whether neighborhoods should change—neighborhoods that don’t change stagnate, schools close, businesses leave, opportunities disappear. The real question is: Can we manage change at a scale and pace that strengthens communities rather than overwhelming them?

What Gets in the Way

The biggest obstacle isn’t usually bad intentions. It’s that we’ve built systems—regulatory codes, zoning laws, approval processes—that make it extraordinarily difficult to add housing, especially at the small scale that fits naturally into existing neighborhoods.

Local zoning often prohibits anything other than single-family homes on lots that are bigger than necessary. This means we can’t build smaller cottages on smaller lots, or attached townhomes on corner parcels, or god forbid a couple of duplexes mixed into the neighborhood. These options could add homes more affordably than the standard options without overwhelming neighborhood character and without impact local property values - if they were only allowed.

State building codes sometimes add costs that make smaller projects financially infeasible, even when there’s clear community need and support. In a few meaningful instances, building code provisions were designed to make certain types of housing more expensive and less feasible.

Infrastructure capacity and planning can limit where housing is feasible, even on sites that would otherwise work well.

Approval processes are often unpredictable, lengthy, and expensive—which favors large developers doing big projects over smaller, community-scaled investments.

The result: we get either no new housing (and prices keep rising) or occasional large projects that feel imposed rather than integrated (creating community opposition to any future development).

There’s a better path forward, but it requires honest conversation about tradeoffs.

A neighborhood of mixed housing types. Source unknown.

The Role of Government—and Each of Us

Government has powerful tools to influence housing supply, primarily through regulatory codes, infrastructure investment, and local tax incentives. The question is whether we use those tools to enable appropriate housing growth or to prevent it.

But here’s what’s critical: government can’t solve this alone, and top-down mandates without community partnership rarely work well.

This is complex work. It requires:

• Making complicated housing economics accessible to everyone, not just experts

• Creating genuine shared understanding across people with different backgrounds and perspectives

• Managing expectations about what individual projects can deliver versus what requires broader strategy

• Building trust through transparent conversation about financial feasibility and tradeoffs

• Recognizing that dozens of small, thoughtful investments create transformation that single large projects cannot

What’s Coming in This Series

Over the next several weeks, we’ll dig deeper into the questions that matter:

• How much housing does your community actually need? (And how do we figure that out?)

• What types of housing fit where? (And why place matters)

• How do we add housing without overwhelming neighborhood character? (Scale, pace, and design)

• What makes housing financially feasible? (Understanding development economics)

• How do we structure partnerships that work? (Beyond adversarial development)

• What does cumulative impact look like? (How small investments compound into transformation)

• Which policy changes can actually help? (Moving beyond symbolic gestures)

Each piece will blend economic fundamentals with practical examples, real numbers, and honest conversation about what’s hard. We’ll highlight what’s working in communities similar to yours and what we’re learning from projects that didn’t go as planned.

An Invitation

Whether you’re a longtime homeowner concerned about your neighborhood changing too fast, a young person frustrated that you can’t afford to live where you grew up, a renter worried about rising costs, a business owner struggling to find workers, or a community leader trying to navigate these challenges—this series is for you.

We’re not here to tell you what to think. We’re here to help everyone understand the same fundamental realities, so we can have productive conversations about realistic solutions.

Because here’s the truth: we can either manage change thoughtfully together, or we can let market forces and regulatory inertia make these decisions for us. The former creates stronger communities. The latter often doesn’t.

Let’s do the math together and figure out what’s actually possible.

Flywheel partners with communities to manage neighborhood investment at the right scale and pace. Learn more at www.flywheelmomentum.com or reach out at hello@flywheelmomentum.com .

The assumption that every family should live on a half acre with a two-car garage is undermining the financial sustainability of our cities and townships, and the environmental sustainability of our ecosystems.

We’ve spent decades chasing this dream, spreading our communities outward across meadows and forests, believing we were bringing ourselves closer to the natural world.

The result has been the opposite. In our pursuit of personal green space, we’ve consumed the very landscapes we sought to be near. Subdivisions have replaced working farms. Cul-de-sacs have fragmented forests into isolated patches too small to support the wildlife that once thrived there. The irony is painful: we destroyed nature in our attempt to live within it.

But there’s another way. One that seems counterintuitive at first, until you look closely at the places where it’s already working.

Source credit: Robert Orr & Associates, Madison CT. Compact neighborhood development allows for the preservation of a majority of the surrounding landscape.

The Mathematics of Land Preservation

Consider two scenarios for housing the same number of families.

In the first, we build conventional suburban subdivisions: single-family homes on quarter-to one-acre lots, connected by wide roads, supported by new water and sewer infrastructure extending miles from existing systems. A development of 400 homes consumes 200+ acres of former farmland, plus additional acreage for the commercial strips, parking lots, and road widenings that almost always follow.

In the second scenario, we build compact neighborhoods near existing town centers: townhouses, small apartment buildings, and modest single-family homes on smaller lots. The same 400 households occupy 30 acres, connected to infrastructure that’s already paid for, walking distance from shops and services that already exist.

The arithmetic is straightforward. Dense development doesn’t just reduce land consumption incrementally—it reduces it by factors of five, ten, or more. Every compact neighborhood we build is a farm, forest, or full ecosystem that remains unbroken.

When Cities Meet Wilderness

Some of the world’s most beloved places exist precisely at the boundary between dense human settlement and protected nature. Far from being incompatible, the adjacency creates something greater than either could offer alone.

Vancouver, British Columbia demonstrates the principle at metropolitan scale. Hemmed in by mountains, ocean, and an agricultural land reserve that protects the Fraser Valley’s farms, the region has grown dense rather than sprawling.

These aren’t accidents. They’re the result of deliberate choices to concentrate development where it makes sense and preserve everything else.

Vancouver’s Stanley Park. 1,000 acres of forest remains largely in tact because the dense urban edge was permitted to grow right up to the boundary. Most North American cities would have required a precipitous decline in density that ultimately would have put increasing pressure for more low density homes to encroach on the park.

Boulder, Colorado tells a similar story. The city is bounded by a greenbelt of protected open space, purchased and preserved over decades through dedicated sales tax revenue. Development pressure has pushed building upward rather than outward, creating a downtown where residents live in multi-story buildings minutes from trails leading into the foothills of the Rocky Mountains. Home values near this open space premium reflect what people actually want: not isolation, but access.

However, in places like Boulder, excessive land use regulations make it very difficult to build new housing in high demand places that have infrastructure. This creates artificial scarcity which drives home prices up dramatically. Boulder is a beautiful community nestled in a beautiful landscape. So, it makes sense that property is valued more there than in badlands to the east. However, allowing and encouraging more compact development with a variety of housing sizes and choices would create more abundant housing options and reduce prices.

The Value of Edges

The fundamentals of real estate economics are often referred to as location, location, location. At Flywheel, we prefer to say Proximity, Proximity, Proximity. In other words, the closer a parcel of land is to something that is considered valuable to a potential renter or buyer, the more value that land holds. The suite of amenities that add value to land typically include proximity to shops, restaurants, good schools, good jobs, and nature.

In fact, proximity to protected open space increases property values significantly. Homes adjacent to parks, greenbelts, and natural areas consistently sell for premiums of 10 to 20 percent or more, depending on the quality and accessibility of the preserved land.

This creates an interesting alignment of interests. Developers who have historically favored large, premium sized lots for estates and mansions are now beginning to appreciate that smaller lots adjacent to protected nature can serve middle income households and command equal or higher returns per acre than larger lots in conventional subdivisions. Municipalities discover that the infrastructure savings from concentrated development can fund land preservation. Residents get both the neighborhood life that comes from density and the natural amenities that come from proximity to open space.

Image credit: “Treeconomics: How to put a fair price tag on urban forests.”

The key insight is that private green space and public green space aren’t interchangeable. A quarter-acre lawn requires maintenance, isolates families from neighbors, provides minimal ecological value, and often contributes to more stormwater runoff and contaminants in local waterways than would an intact forest or wetland. A twenty-acre community woodland requires no individual effort to maintain, brings neighbors together on shared trails, and supports actual wildlife habitat.

We’ve been making the wrong trade for decades: giving every family their own little patch of turf while allowing the genuine natural landscapes to be subdivided and sold.

Health That Money Can’t Buy

The research on nature and human health has matured dramatically in recent years, moving from intuition to quantified evidence.

A landmark study published in The Lancet followed over 300,000 people and found that living within 300 meters of green space was associated with lower rates of cardiovascular disease, reduced stress hormones, and decreased mortality from multiple causes. The effects were strongest for people in lower-income brackets—suggesting that access to nature isn’t a luxury amenity but a basic component of a healthy environment.

For children, the evidence is particularly compelling. Research published in the Proceedings of the National Academy of Sciences has documented that childhood exposure to natural environments is associated with better cognitive development, reduced symptoms of ADHD, lower rates of anxiety and depression, and stronger immune system function. The effects persist into adulthood—time in nature during childhood predicts better mental health outcomes decades later.

Japanese researchers have pioneered the study of “forest bathing” (shinrin-yoku), demonstrating that even brief immersion in natural settings reduces cortisol levels, lowers blood pressure, and enhances immune function by increasing the activity of natural killer cells. These aren’t small effects detectable only in laboratory conditions; they’re meaningful improvements in physiological markers of health.

Urban heat island effects add another dimension. Dense neighborhoods interspersed with parks, street trees, and nearby natural areas stay cooler. As climate change intensifies summer heat, this difference will become increasingly important for public health—particularly for elderly residents and those without air conditioning.

The prescription isn’t for everyone to move to the countryside. That would simply destroy the countryside. The prescription is for compact communities with genuine access to preserved natural spaces—exactly what thoughtful development can provide.

From Plaza to Wilderness: A Gradient of Green

Healthy urban regions don’t feature an abrupt line between “city” and “nature.” Instead, they create gradients—a progression of green space types that changes as you move from the urban core toward the periphery.

In the city center, nature appears as street trees, pocket parks, and green roofs. These elements moderate temperatures, filter air, manage stormwater, and provide patches of habitat for urban-adapted species. A red-tailed hawk nesting on a building ledge or a peregrine falcon hunting pigeons represents nature adapted to the urban environment. Pollinators find refuge in planted containers and median strips. These aren’t wilderness, but they’re genuine ecological function woven into the built environment.

In inner neighborhoods, nature takes the form of larger parks, community gardens, and tree-lined streets that create connected canopy. Squirrels, songbirds, and butterflies move through these corridors. Mature trees provide shade, beauty, and habitat. Stormwater detention areas can be designed as wetlands, attracting wading birds and providing outdoor classrooms for nearby schools. The Emerald Necklace in Boston, designed by Frederick Law Olmsted, demonstrates how parks can function as both neighborhood amenity and ecological infrastructure, connecting the city to larger natural systems.

At the urban edge, preserved natural areas begin to support more sensitive species. Deer, fox, coyote, and various raptors need larger territories but can thrive surprisingly close to human settlement when given connected habitat. Greenbelts and preserved farms serve as buffers, allowing wildlife populations to persist adjacent to development. Stream corridors—protected rather than culverted—function as wildlife highways connecting these edge habitats to larger wilderness areas beyond.

Beyond the urban boundary, intact forests, wetlands, and agricultural lands support the full range of native species, including those that can’t tolerate human proximity. These areas recharge aquifers, filter water, sequester carbon, and provide the ecosystem services that sustain human settlements downstream and downwind.

The connections between these zones matter as much as the zones themselves. Wildlife needs to move—to find food, to find mates, to respond to seasonal changes, to adapt to shifting conditions. Corridors of continuous habitat allow that movement. Fragmented patches, no matter how carefully preserved, eventually lose species that can’t maintain viable populations in isolation.

This is why the pattern of development matters so much. Compact growth preserves not just land, but connections. It creates the conditions to allow natural corridors to remain intact rather than slicing them into ever-smaller pieces.

The Choice We’re Making

Every development decision is a choice about the future landscape. Every time we require minimum lot sizes based on an arbitrary or subjective standard, we’re choosing to lose that extra land permanently. Every time we reject infill development in an established neighborhood, we’re pushing growth outward toward places we haven’t yet consumed.

These choices are rarely framed this way. We debate traffic impacts, building heights, shadows, and parking. We worry about neighborhood character and changing views. These concerns are legitimate, but they often crowd out the larger question: Where should the next thousand households in our region live?

If they live in scattered subdivisions carved from working farms and forested hillsides, we lose something irreplaceable. The infrastructure costs are higher, the climate impacts are greater, and the ecological damage is permanent.

If more of us live in compact neighborhoods with tree-lined streets and within existing communities—neighborhoods with access to parks, connected to preserved open spaces, designed for walking and transit—we keep options open. The farms remain farms. The forests remain forests. The natural corridors can remain connected.

The communities that understand this are building differently. They’re zoning for density near transit and services. They’re requiring new developments to cluster buildings and preserve open space rather than spreading houses evenly across every available acre.

They’re discovering that density isn’t the enemy of nature. Sprawl is.

What This Means for Your Community

The principles are simple, even if the politics are complex.

Concentrate new housing where infrastructure already exists. Every dollar spent extending roads, water, and sewer into undeveloped areas is a dollar not available for maintaining the systems we’ve already built—and it enables the conversion of more open land into developed land.

This image illustrates 42 homes on 2 acres with a shared green space at the center. While some families will still choose to buy a more private, large lot, this pattern of development likely saves 20-30 acres of land compared to a traditional subdivision.

Build neighborhoods that face nature rather than turning their backs on it. Allow compact development to occur right up to the edge of these protected places and maximize the infrastructure we’ve already built. Trails and paths should connect residents to preserved lands. Buildings should orient toward views of open space. Access should be democratic—the health benefits of nature shouldn’t be reserved for homeowners whose lots adjoin protected areas.

Accept that protected land will attract development pressure—and plan for it. When you preserve a beautiful forest or meadow, nearby land values rise. That’s a feature, not a bug: it means people value what you’ve protected. The response is to zone adjacent areas for the density that reflects that value, not to panic and prevent any development at all.

Trust that people want to live near nature. The market consistently demonstrates this preference. Communities that offer genuine natural amenities alongside walkable neighborhoods with diverse housing types are thriving. They’re not sacrificing livability for environmentalism—they’re discovering that the two are the same thing.

The choice between development and preservation is a false one. We can have vibrant, growing communities and thriving natural landscapes—but only if we’re willing to build our communities differently. The future belongs to places that understand density and nature as partners, not competitors.

But here’s what we’ve learned from communities that have successfully navigated growth: the backlash isn’t inevitable. When residents feel ownership over the vision, when the process respects their input, and when the results reflect their values, opposition transforms into support.

Here are six implementation steps that work.

Share

1. Craft a Clear Neighborhood Vision with Specific Design Patterns

Vague plans invite opposition. When residents don’t know what’s coming, they imagine the worst. The solution isn’t less community input—it’s more, channeled into something concrete.

A design charrette brings residents, business owners, property owners, and design professionals together for an intensive multi-day workshop. Unlike traditional planning processes with endless meetings and dwindling attendance, a charrette creates momentum. Participants don’t just comment on someone else’s plan—they help create it.

The output should be specific: not “we want walkable neighborhoods” but illustrated building types, street cross-sections, and design standards that show exactly what future development will look like. When residents can see renderings of buildings that fit their community’s character—roof pitches, materials, setbacks, landscaping—abstract fears become concrete conversations.

Critically, the vision must be economically feasible. Beautiful renderings mean nothing if the buildings can’t actually be financed and built in your market. The charrette process should include developers and builders who can reality-check the economics. A vision that sits on a shelf because nobody can make the numbers work is worse than no vision at all.

Source: Robert Orr & Associates, Massengale & Co LLC, and Michael Morrisey

The goal is a strong sense of identity rooted in place. What makes your community distinct? What architectural traditions deserve continuation? What patterns of streets and blocks have worked well historically? The vision should feel like it belongs to your town—not something imported from somewhere else.

2. Amend the Master Plan and Zoning Ordinance to Make Implementation Easy

A vision without regulatory teeth is just a wish. The community’s hard work during the charrette process must be codified into actual policy.

This means updating your master plan to reflect the vision, then aligning your zoning ordinance so that development consistent with the vision can happen by right—without public hearings for every individual project.

This is where many communities stumble. They create a beautiful vision, then leave in place a zoning code that makes that vision illegal to build. Or they require discretionary approval for every project, which means every project becomes a new battle.

By-right development isn’t about removing community voice. It’s about moving that voice upstream—into the visioning process and the code itself—rather than relitigating the same questions project by project. When the community has already decided what they want through the charrette, individual projects that match the vision shouldn’t need to prove themselves all over again.

Form-based codes are particularly effective here. Instead of regulating primarily by use (residential vs. commercial), they regulate by building form—ensuring that new construction fits the physical character the community has defined. A project that meets the code’s standards for setbacks, height, facade treatment, and relationship to the street can proceed without discretionary review.

The result: developers know what’s expected, staff can approve conforming projects administratively, and residents can trust that what gets built will match what they envisioned.

Many communities say they want the development pattern on the lower half of this drawing in their master plans, but their zoning laws require the patterns on the upper half - land uses are all separated and surrounded by massive parking and green space requirements, each one planned in isolation from the neighboring properties.

3. Invest in Shared Infrastructure That Represents Community Priorities

Private development alone doesn’t make a neighborhood. The public realm—streets, sidewalks, parks, plazas, trails—creates the connective tissue that makes places feel like communities rather than collections of buildings.

When a community invests in high-quality shared spaces, it sends a signal: we’re serious about this vision, and we’re putting public resources behind it. A new pocket park, a streetscape improvement, a trail connection—these visible investments build confidence that change is being managed thoughtfully.

More importantly, public investments create shared spaces accessible to everyone. When growth brings new residents, existing residents benefit from amenities they couldn’t have afforded alone. The new trail isn’t just for the people in the new apartments—it’s for everyone. The improved streetscape serves the whole community.

This is also where community priorities become tangible. If the charrette identified walkability as a core value, invest in sidewalks and crosswalks. If green space was emphasized, prioritize parks and tree canopy. If gathering places matter, create plazas or improve the town square.

Public infrastructure investment demonstrates commitment to the vision and creates shared benefit that can help existing residents see growth as an opportunity rather than a threat.

4. Support Small-Scale and Local Developers

Who builds the vision matters as much as what gets built.

Large outside developers often trigger community resistance almost automatically. They’re seen as extractive—taking profits out of the community, indifferent to local character, accountable to distant investors rather than neighbors.

Small-scale local developers are different. They live in the community. They have relationships with neighbors. Their reputation depends on getting it right. They’re building wealth locally rather than extracting it.

The more your community can cultivate homegrown developers to execute the vision, the better. This might mean:

• Technical assistance to help first-time developers navigate permitting and financing

• Pre-approved building plans that reduce design costs for small projects

• Streamlined permitting that doesn’t require expensive consultants and lawyers

• Connections to financing through local banks, CDFIs, or community loan funds

• Education programs that teach the basics of small-scale development

When the person building the new fourplex is someone’s neighbor—someone who goes to the same church, whose kids attend the same schools—the project feels different than when it’s a faceless corporation from out of state.

Local developers also tend to build incrementally, one project at a time, which gives the community time to adjust. A dozen small projects spread across the neighborhood over several years is far less disruptive than one massive development all at once.

5. Celebrate Early Successes and Clearly Articulate the Benefits

The first projects that implement the vision are crucial. They demonstrate that the process works—that what the community envisioned can actually be built, and that it looks and functions as promised.

Don’t let these successes go unnoticed. Celebrate them publicly:

• Host ribbon cuttings and open houses

• Feature projects in local media and municipal communications

• Create before-and-after documentation

• Share stories of the people who now live or work there

And be specific about the benefits:

• “This development added 12 families to our community—that’s 8 more kids in our elementary school.”

• “The new businesses created 15 local jobs and generated $XX in annual sales tax revenue.”

• “Property tax revenue from this project will fund trail maintenance for the next decade.”

• “Three of the new units are occupied by teachers who work in our schools but previously couldn’t afford to live here.”

Abstract benefits don’t persuade skeptics. Concrete benefits do. When residents can connect new development to specific outcomes they care about—school enrollment, local jobs, park funding, workforce housing—the value becomes real.

Early successes also build developer confidence. When local builders see that projects consistent with the vision move through approvals smoothly and lease up quickly, more of them will participate. Success breeds success.

6. Continuously Connect New Development to the Community’s Vision

Memory fades. The excitement of the charrette dims as months and years pass. New residents arrive who weren’t part of the original process. Elected officials turn over.

Successful communities don’t let the vision become a dusty document on a shelf. They continuously remind residents that new development is a direct result of their input and feedback.

When a project comes forward:

• Reference the charrette: “This proposal implements the mixed-use building type that residents identified as a priority during our 2023 community visioning process.”

• Show the connection: Display the original vision drawings alongside the current proposal so people can see the through-line.

• Credit the community: “This is what you asked for” is a powerful message. It reminds residents that they shaped this outcome.

When projects are completed:

• Tell the story: “Two years ago, our community came together to envision this neighborhood’s future. Today, we’re seeing that vision become reality.”

• Invite participation: Hold anniversary events at the charrette site. Update the community on implementation progress. Keep the vision alive as a living document rather than a historical artifact.

This ongoing communication serves multiple purposes. It reinforces that the process was legitimate and resident-driven. It helps newcomers understand the context for what’s being built. It holds officials and developers accountable to the vision. And it builds institutional memory that survives staff and leadership transitions.

The Pattern That Works

These six steps aren’t independent—they reinforce each other:

A clear vision gives residents confidence that change will reflect their values. Aligned regulations make that vision achievable without endless fights. Public investment demonstrates commitment and creates shared benefit. Local developers build trust and keep wealth in the community. Celebrated successes prove the model works. Continuous communication maintains momentum and accountability.

Communities that follow this pattern don’t eliminate all opposition—some resistance to change is inevitable. But they transform the default from “fight every project” to “support projects that match our vision.”

The difference between communities that grow well and communities that struggle isn’t whether they face challenges. It’s whether they’ve built the foundation—the shared vision, the aligned regulations, the trusted process—that lets them navigate those challenges together.

That foundation starts with bringing your community together to answer a simple question: what do we want to become?

The answer, built collectively and implemented consistently, is the antidote to backlash.

This reaction is deeply human. And understanding why we feel it is the first step toward building neighborhoods that actually serve the people who live in them.

The Comfort of the Familiar

Our resistance to neighborhood change isn’t a character flaw. It’s wired into us.

Psychologists have long documented what they call “status quo bias”—our tendency to prefer the current state of affairs simply because it’s current. We overvalue what we have and undervalue what we might gain. The neighborhood we know, with all its imperfections, feels safer than the neighborhood we’re asked to imagine.

This makes evolutionary sense. For most of human history, familiar environments meant predictable environments, and predictability meant survival. The brain learned to code “known” as “safe” and “unknown” as “threat.” When someone proposes change to our physical surroundings—the literal ground beneath our feet—that ancient alarm system activates.

But here’s the thing: our brains are responding to a threat that often doesn’t exist. We’re applying survival instincts to zoning hearings.

What We’re Really Talking About When We Talk About Density

When density enters the conversation at a community meeting, something curious happens. The stated concerns—parking, traffic, shadows, strain on schools—are real enough. But they rarely account for the emotional intensity in the room.

That intensity has deeper roots.

For much of American history, “density” was a coded word. It meant tenements and overcrowding. It meant immigrant neighborhoods that reformers wanted to “clean up.” It meant redlined districts and urban renewal projects that bulldozed thriving Black communities in the name of progress. Density became associated with poverty, disorder, and—let’s be honest—people who were different from those making the decisions.

These associations didn’t disappear when the laws changed. They settled into our collective memory, passed down through real estate practices, lending policies, and the suburban development patterns that promised escape from all that density implied. When we hear “higher density” today, we’re often hearing echoes of a century of messaging that told us certain kinds of neighborhoods were desirable and others were not.

Quality of life concerns compound these anxieties. Will more people mean more noise? Will new buildings block my light? Will “those kinds of developments” attract “those kinds of people”? The questions are rarely asked so bluntly, but they hover in the room.

Acknowledging this history doesn’t mean dismissing every concern as prejudice. It means recognizing that density conversations carry weight we don’t always articulate. And it means being honest that our instinctive resistance may have origins we’d rather not examine.

The Myth of the Frozen Neighborhood

Here’s what we tend to forget when we fight against new buildings: neighborhoods are already changing. They’ve never stopped changing. The only question is whether we’ll participate in shaping that change or let it happen to us.

Consider what shifts in a neighborhood even when not a single structure is added or altered:

People change. The young families who bought starter homes in the 1990s are now empty nesters. Their children, priced out of the market, live two towns over. The demographic composition of a neighborhood can transform entirely within a generation, regardless of what the buildings look like.

Businesses come and go. The hardware store becomes a yoga studio becomes a cell phone shop becomes a vacant storefront. Commercial districts rise and fall based on economic forces that have nothing to do with residential construction.

Trees grow and die. The saplings planted when the subdivision was built are now mature canopies—or they’ve been removed after storm damage, leaving the streetscape unrecognizable.

Infrastructure ages. The roads, pipes, and wires beneath us deteriorate. The school that was brand new when families moved in now needs a roof. The municipal budget that once seemed adequate now strains under the weight of maintaining far-flung development patterns.

Property values shift. The “affordable” neighborhood of one decade becomes the “up-and-coming” neighborhood of the next, and the “exclusive” neighborhood of the decade after that. Pricing dynamics change who can afford to stay and who gets pushed out—often regardless of what gets built.

Cultural character evolves. The restaurants, the gathering spots, the festivals, the unwritten rules about how neighbors interact—all of this transforms as populations shift, generational preferences change, and new residents bring new traditions.

The neighborhood you moved into doesn’t exist anymore. It hasn’t for years. What exists is a place in constant, quiet evolution—a living system responding to countless pressures and inputs, most of which have nothing to do with development applications.

When we fight against new buildings, we’re often fighting to preserve something that’s already gone. We’re mistaking architectural stasis for community stability. And we’re ignoring the very real changes happening around us while fixating on the changes we can see on a site plan.

Living Systems, Not Museum Exhibits

What if we thought about our neighborhoods the way we think about forests?

A healthy forest isn’t one where nothing ever changes. It’s one where change happens in ways that maintain overall vitality. Old trees fall and create space for new growth. Species compete and cooperate. Disturbances—even fires—can be necessary for long-term health.

A forest that never changed would be a dead forest.

Neighborhoods work the same way. They need the ability to evolve, to welcome new residents, to adapt housing stock to changing needs. A neighborhood where no one can afford to move in is a neighborhood in decline, no matter how pristine the lawns look. A neighborhood where young families can’t find housing, where seniors can’t downsize, where workers can’t live near their jobs—that neighborhood is ossifying, even if the architecture remains frozen in time.

The question isn’t whether change will come. It’s whether we’ll have any say in what kind of change it is.

A Different Kind of Preservation

Here’s what I’ve learned after years of working with communities on housing policy: the people who show up to oppose development usually love their neighborhoods. That love is real and valuable. It’s not something to dismiss or overcome. It’s something to redirect.

Because the things we actually love about where we live—the sense of community, the familiar faces, the feeling of belonging—aren’t preserved by preventing buildings. They’re preserved by making sure the neighborhood remains a place where people at different stages of life, different income levels, and different household configurations can put down roots.

The young couple renting an apartment. The retiree downsizing from the family home. The teacher, the nurse, the restaurant worker who keeps the neighborhood cafe running. These people are the neighborhood. And if we don’t build places for them to live, they’ll leave. Not because developers ruined everything, but because we priced them out in the name of preservation.

The deepest irony of anti-development activism is that it often accelerates the very losses it fears. Block new housing, and existing housing prices rise. Prices rise, and longtime residents cash out. New residents with more money move in. The cultural character transforms. The community fragments. And the neighborhood that fought so hard against change discovers it has changed anyway—just in ways no one voted on and no one wanted.

Moving Forward

None of this is to say that all development is good development, or that every proposal deserves approval, or that neighbors should have no voice in what gets built. Design matters. Context matters. Community input matters.

But our starting posture matters too.

We can approach each conversation from a place of fear, focused on what we might lose. Or we can approach it from a place of curiosity, asking what we might gain. We can treat our neighborhoods as fragile artifacts that must be protected from the future. Or we can treat them as resilient systems that have survived a century of change and will survive a century more.

The neighborhoods we love aren’t photographs. They’re living things. And like all living things, they must adapt to survive.

The question isn’t whether they’ll change. It’s whether we’ll be brave enough to help them change well.

Share

What about your neighborhood? What’s changed in the years you’ve lived there—and what hasn’t? I’d love to hear your thoughts.

What makes this scene work isn’t just pleasant aesthetics or good urban design. It’s that all these people—with their different incomes, ages, and occupations—share the same neighborhood. They cross paths daily. Their children attend the same schools. They shop at the same stores, use the same parks, and over time, their lives become interwoven in ways both subtle and profound.

Subscribe now

Mixed-income neighborhoods aren’t just nice to have. They’re essential infrastructure for building healthy communities and creating genuine economic opportunity. But for them to truly function, they need three critical elements working in concert: economic diversity that creates opportunity, a strong sense of place that builds identity, and sufficient density to support the amenities that make daily life work.

The Opportunity Machine

When Raj Chetty and his colleagues at Harvard studied the Moving to Opportunity experiment, they uncovered something remarkable. Children who moved from high-poverty neighborhoods to lower-poverty areas before age 13 saw their adult earnings increase by an average of 31% for each year of childhood spent in the better neighborhood. These weren’t children who received better schools or more services necessarily. They simply lived in places where people with different economic circumstances lived side by side.

The mechanism turns out to be elegantly simple. When a child grows up surrounded only by others facing similar economic constraints, their map of what’s possible contracts. They don’t see adults going to work in professional careers. They don’t have neighbors who can explain how to navigate college applications or job interviews. They don’t observe the daily rhythms of economic stability. It’s not about culture or values—it’s about information access and social networks that operate through proximity.

For adults, mixed-income neighborhoods function as organic job networks and skill-building ecosystems. The small business owner might hire the high school student down the street for weekend work. The accountant might help a neighbor understand their taxes. The nurse might notice a child’s persistent cough and suggest a check-up. These aren’t formal programs or services—they’re the natural exchanges that happen when people with different resources and knowledge share the same streets.

Economic segregation, by contrast, compounds disadvantage in ways we often don’t see. When everyone in a neighborhood faces similar financial constraints, there’s no diversity in the job networks. The informal mentorship that happens through casual contact disappears. The small loans between friends that help someone start a business or weather an emergency dry up. Mixed-income neighborhoods don’t erase economic inequality, but they create more on-ramps to opportunity through the sheer diversity of daily human contact.

The Bonds That Hold

But economic diversity alone doesn’t make a neighborhood thrive. Without a strong sense of place—a shared identity that transcends income differences—mixed-income neighborhoods can feel fractured or transient. The second essential function is creating spaces and institutions that bind people together across economic lines.

This is where local institutions become crucial. A neighborhood elementary school where children from different economic backgrounds learn together creates natural connections between parents. The Friday night football game brings the whole community out, regardless of whether they live in a small cottage or a larger single-family home. The church potluck or community center coding class or volunteer fire department creates occasions for people to interact as neighbors rather than as representatives of income brackets.

Third places—those informal gathering spots that aren’t home or work—serve as the connective tissue of community life. Ray Oldenburg, who coined the term, understood that these spaces are where democracy actually happens. The coffee shop where regulars gather for morning conversation. The park where parents chat while their children (or dogs) play. The community garden where neighbors work side by side. The basketball court (and sometimes pickleball court) where pickup games form organically. These aren’t luxuries—they’re essential infrastructure for building social capital.

Modern research has quantified what we intuitively understand. A 2023 study published in the American Journal of Public Health found that people with strong local social connections had significantly better mental health outcomes and lower rates of depression and anxiety. Another study from the Journal of Urban Health demonstrated that neighborhoods with more third places showed higher levels of social cohesion and lower crime rates, regardless of average income levels.

The mechanism is straightforward: repeated casual contact builds familiarity, familiarity builds trust, and trust enables cooperation. When you see someone regularly at the coffee shop or the playground, they stop being a stranger. When your children (or dogs) play together at the park, you start to chat. Over time, these weak ties create a web of social connection that makes neighborhoods feel safe, cohesive, and meaningful.

Consider what happens when these places disappear. Many suburban subdivisions, despite having relatively high incomes, suffer from isolation and disconnection precisely because they lack third places. Neighbors often drive from their garage to work and back again without ever encountering other neighbors. When there’s no coffee shop to gather in, no park within walking distance, no corner store that carries a few essentials, the likelihood of bumping into a neighbor and having a short conversation is dramatically reduced. This may seem trivial, but when you need someone to feed your cat for a few days, watch your child for an afternoon, or shovel the sidewalk when you’ve thrown out your back, it may be harder to phone a local friend. The result is economic homogeneity paired with social fragmentation—what sociologist Robert Putnam calls “bowling alone.”

The Density Dividend

The third essential function is often the most misunderstood: neighborhoods need sufficient density to support the amenities and services that make mixed-income living practical. This isn’t about cramming more people into less space for its own sake—it’s about reaching the thresholds that make community infrastructure viable.

Consider public transportation. A bus line needs roughly 40 residents per acre to justify running every 15 minutes during peak hours (that’s about 15 homes, apartments or condos per acre). Below that density, service drops to every 30 or 60 minutes or it requires a big subsidy. One of the biggest determining factors of whether a transit service is both a reliable and efficient option for getting to work or school is highly dependent on how we are using the land that is served by transit. That single threshold determines whether a family without a car can access opportunity or they remain trapped by geography.

The same math applies to local retail. A neighborhood grocery store needs about 5,000 households within a mile to remain viable. A coffee shop needs 2,500. A bookstore needs 10,000. When neighborhoods spread out with large lots and single-family homes only, these thresholds become impossible to reach. The result is that every errand requires a car, every trip is a production, and people without reliable transportation face genuine hardship.

For families with children, density unlocks essential services. Daycares need sufficient enrollment to keep costs reasonable—too few children in the neighborhood means higher per-child costs as fixed expenses get spread across fewer families. Schools need enough students to offer diverse programming, from special education services to advanced courses to sports teams. When neighborhoods achieve moderate density with a mix of housing types—some cottages, some townhomes, some small apartments alongside traditional single-family homes—these services become accessible to everyone.

The mobility benefits extend beyond transit. Dense enough neighborhoods justify protected bike lanes and trails, because planners can point to thousands of potential users. They support wider sidewalks and better pedestrian infrastructure. They make walking to school feasible for more children, reducing traffic congestion and giving kids more independence. Research from the Active Living Research program shows that children in walkable neighborhoods get significantly more physical activity and have lower obesity rates than those in car-dependent suburbs. Kids also, on average, show much better signs of mental health and well being when they are able to walk safely through their neighborhood. The combined effects of exercise, fresh air, and a sense of independence can do wonders for child well-being.

For low-income households specifically, this density dividend matters enormously. Transportation typically consumes 15-20% of household budgets in sprawling suburbs where driving is mandatory. In walkable, transit-served neighborhoods, that figure can drop to 5-10%, freeing up resources for other necessities. The ability to walk to work, take transit to school, or bike to the grocery store isn’t just convenient—it’s economically transformative. Most households will save $10,000 or more for every car they are not required to own. That can mean an additional $800 of available income to contribute toward rent or mortgage payments, toward advanced education for either the parents or their children, or the ability to actually save for emergencies.

Building the Infrastructure of Opportunity

These three functions—economic diversity, strong sense of place, and sufficient density—don’t work in isolation. They reinforce each other in ways that create genuine community resilience.

Economic diversity brings different perspectives and resources to neighborhood problems. A strong sense of place gives people reason to stay and invest in their community rather than moving when they get a raise. Adequate density makes the third places and services viable that create a sense of place to begin with. Together, they form a system that’s far more powerful than any single element alone.

The tragedy is that we’ve spent decades building neighborhoods that systematically prevent these functions from working. We’ve zoned vast areas for only single-family homes on large lots, preventing the density needed to support services. We’ve separated residential areas from commercial districts, eliminating the natural gathering places and easy access to employment. We’ve required expensive minimum home sizes that sort people by income. Each regulation made sense in isolation, but together they’ve created a system of neighborhoods that work for very few families any more.

The path forward requires rethinking these barriers. It means legalizing small cottages, townhomes, and modest apartments in established neighborhoods—not in isolated complexes, but woven throughout the urban fabric. It means allowing corner stores and coffee shops in residential areas. It means building parks and third places deliberately, not as amenities for wealthy subdivisions but as essential infrastructure for every neighborhood.

When we get this right, the benefits cascade. Children growing up with neighbors of different backgrounds gain broader horizons. Adults build the social networks that lead to jobs and opportunity. Local businesses thrive on foot traffic. Crime drops as more eyes are on the street. Mental health improves as isolation decreases. Transportation costs fall as walking and transit become viable. Schools improve as they draw from more economically diverse populations.

This isn’t utopian thinking—it’s how neighborhoods functioned before we zoned and regulated away diversity. Walk through any charming pre-war neighborhood and you’ll see exactly this pattern: a variety of housing types at moderate density, corner stores and gathering places, and a mix of people who know each other by name. We’re not inventing something new. We’re rediscovering something we lost.

The work of building these neighborhoods isn’t technical—we know how to design them. It’s about removing the regulatory barriers that prevent them from forming naturally and making deliberate choices to weave economic diversity back into the fabric of our communities. Every zoning reform that allows more housing types, every new park or plaza, every corner coffee shop moves us closer to neighborhoods that work for everyone who lives there.

Share Momentum to Build Community

I’ve been working to address housing affordability and availability for nearly half of my 20 year career. In 2015, my area of focus began to shift away from a traditional approach to economic development and community planning and toward a more equitable approach to regional prosperity and sustainable growth.

Early in this shift, I assumed that more government intervention was the right answer. Inclusionary zoning and rent stabilization measures seemed to be the obvious solutions. But the more I became engaged in the actual production of housing, and worked to influence complicated local and regional market dynamics to the benefit of the broader community, the more I began to understand the true opportunity to make changes at scale within the current confines of the system we have.

The Basic Principle

When we add more housing to a market, price growth slows down in the near term. When we add enough new housing to a market, prices of older homes will become more affordable over time. This follows the simple rules of supply and demand.

For close to a decade, most regions have had much more housing demand than available supply. The competition for scarce supply has resulted in rapidly increasing housing prices. And the result is that more and more low income households have been priced out of the market or forced to double-up with friends and family.

One of the solutions to this problem is enabling more supply to be built where there is demand. When housing supply increases faster than demand, competition among landlords and sellers pushes prices down.

This happens even when the new housing is expensive.

Because there remains so much skepticism about the ability of the market to address any of the urgent needs in the housing market, I am going to include a series of resources as embedded links to citations. If you don’t trust my reasoning, please click through these links and read the studies. This is a rare issue where the Pew Charitable Trust agrees with the American Enterprise Institute. The Mercatus Center, the NYU Furman Center, the Terner Center at UC Berkeley, and the Lewis Center at UCLA are all in general agreement. This post is simply a consolidation of research conducted by dozens of more talented individuals.

For an even better read, go to Jerusalem Demsas’ work at the Atlantic and read, Housing Breaks People’s Brains.

How It Works: Moving Chains

When new apartments get built, they start “moving chains” that quickly reach middle- and low-income areas (Mast, Evan. Journal of Urban Economics. The effect of new market-rate housing on the low-income housing market). Here’s how:

A family moves into a new apartment. This frees up their old apartment. Another family moves into that apartment. This frees up their old apartment. The chain continues.

Research tracking these chains found that by the sixth move, 40% of the newly freed-up units are in below-median income areas. A study from Helsinki showed that by the fourth move in the chain, half the units being vacated are then occupied by tenants from the lower half of the income distribution (Been, Vicki. New York University, Furman Center. Supply Skepticism Revisited).

The new market-rate unit never needs to be “affordable” to help low-income renters. It helps by reducing competition for existing affordable units.

More Research to Confirm This

Analysis by The Pew Charitable Trusts found that every 10% increase in a region’s housing supply from 2017 to 2023 meant rents grew 5% less from 2017 to 2024 (Rodnyanski, Su, & Horowitz. Pew Charitable Trust. New Housing Slows Rent Growth Most for Older, More Affordable Units).

Even more important: The biggest rent relief happened for older, less-expensive apartments—the ones low-income residents can afford.

A study published in the Journal of Political Economy found that a 1% increase in new supply lowers average rents by 0.19% and effectively reduces rents of lower-quality units the most (Mense, Andreas. Journal of Political Economy Macroeconomics. The Impact of New Housing Supply on the Distribution of Rents).

Real Cities Where This Is Happening Now

Austin, Texas: Austin rents have fallen for nearly two years amid a boom in apartment construction. Rents dropped from $1,726 in August 2022 to $1,431 by April 2025. Brand-new apartments and older, cheaper apartments alike have seen rents fall.

Minneapolis, Minnesota: Minneapolis experienced an 11.14% drop in rent, directly tied to pro-housing zoning reforms that unlocked housing supply.

Houston, Texas: Houston added housing at a rapid clip and curbed both rent growth and displacement.

Eleven large metro areas that increased housing supply by at least 10% from 2017 to 2023 saw average rents decline from 2023 to 2024.

Why People Worry (And Why Those Worries Miss the Point)

Some people worry that new market-rate housing will raise nearby prices or cause gentrification.

Research shows that new market-rate housing is built in places where prices are already rising, but the new buildings don’t cause the neighborhood change—they respond to existing demand (Beyer, Scott. Independent Institute. Do Upzoning Increase Home Prices? ). Without the new housing, prices would rise even faster.

What This Means for Your Community

Adding housing supply works. It takes time—usually several years. But it works even when the new housing is market-rate.

This does not mean that market-rate housing alone is the only approach. Many families will still need some form of housing subsidy for the foreseeable future. However, there are currently far more families in need of a subsidy due to a lack of available supply, despite earning a decent middle-income salary.

The analysis conducted by the Pew Charitable Trust showed that increasing the whole region’s housing supply has four times the impact on local rents compared with just adding local supply. Every community in a region needs to do its part. And this is the value of creating a regional housing strategy and identifying key corridors and targeted areas to support growth.

The alternative—restricting new housing—makes prices worse. Communities that severely limit housing growth see costs rise and displacement increase.

The choice is clear: Build more housing now, or watch prices climb higher.

Share

Additional Resources:

Housing Voice Podcast - Shane Philips, UCLA Lewis Center. This is one of the most in depth and ongoing conversations about how to solve housing affordability challenges in North America. If you’re serious about understanding housing, this is a must-listen.

AEI Housing Center - Ed Pinto, Tobias Peter, and their team have produced a mind boggling amount of research and toolkits for communities of every size across the US.

Housing Policy Initiative - Pew Charitable Trusts are looking under every rock for viable and sustainable solutions. They have good research on the value of manufactured housing, co-housing, and other innovative solutions.

Escaping the Housing Trap - The latest publication from Strong Towns founder, Chuck Marohn and Derrick Herriges is absolutely worth the read. It gives a sober analysis of how we climb out of this housing crisis via an anti-fragile approach to both the supply of housing itself and how we finance it.