D.C., Chicago are top YIMBY cities for housing development

San Francisco-based Pacaso, a tech-centric real estate marketplace, released a report Monday unveiling the top U.S. metro areas that are embracing new development and “creating a more diverse and plentiful supply of homes.“

The report delves into the “Yes in My Backyard“ (YIMBY) movement, which involves numerous strategies to improve housing supply and lower the cost of living for homeowners and renters alike.

As Pacaso explained, these tactics can include partnerships between local governments and residents to rezone neighborhoods and allow for greater density. Many cities across the country are accomplishing this through co-ownership models and the creation of more accessory dwelling units (ADUs).

“When it comes to solving the housing crisis, we need a dual approach: more construction and more efficient use of existing housing stock,“ Pacaso co-founder and CEO Austin Allison, a 2022 HousingWire Tech Trendsetter, said in the report.

“Communities across the country increasingly are open to innovative solutions, including higher density and co-ownership models that maximize the functionality of available homes. Embracing these strategies will lead to more options for homebuyers and better use of our limited resources.“

According to recent research from Realtor.com, the nationwide housing deficit currently stands at 2.5 million homes. Other estimates are much higher.

Pacaso said that these shortages have been exacerbated by various types of “municipal zoning and building ordinances [that] have historically restricted new housing construction.“ But certain areas of the country are “proactively addressing the housing shortage,“ which “underscores the importance of housing solutions and the positive momentum of the YIMBY movement.“

In tandem with data research firm MetroSight, Pacaso analyzed ZIP codes across the country during two five-year time periods: 2008 to 2012, and 2018 to 2022. A ZIP code was classified as YIMBY-friendly if it “experienced sharp growth in the number of residential units with relatively little growth in housing prices.“

The metro areas with the highest shares of ZIP codes that qualified as YIMBY-friendly were led by Washington, D.C. (71.2%) and Chicago (54.3%).

In and around the nation’s capital, municipalities are adopting land-use policies that allow for more types of housing, the report noted. In Northern Virginia, for example, Arlington County passed a “missing middle” ordinance last year that allows for homes with up with to six units to be built in areas formerly zoned only for single-family detached homes.

In Chicago, only 7% of the ZIP codes met the report’s requirements for high housing demand, but these areas “strongly correlated“ with other YIMBY criteria. The report noted that the city revised an ordinance in 2021 to encourage the development of affordable housing.

Washington, D.C., and Chicago were the only major metro areas in the country where more than half of ZIP codes met the YIMBY criteria. But others in the top 10 had at least one-quarter of ZIP codes qualify. These include Austin; Minneapolis; Columbus, Ohio; San Antonio; Philadelphia; New York City; Kansas City; and Salt Lake City.

“It’s great to see examples of localities that are advancing pro-housing policies so activists, elected officials, and agencies can mirror their success in more places,“ Jessamyn Garner, communications director at affordable housing advocacy group YIMBY Action, said in the Pacaso report.

“In the coming years, it’s crucial that these policies are implemented to the fullest extent possible in order to reduce housing prices in these communities and beyond.“