Three Governors Issue Executive Orders on Housing to Increase Supply

In response to a growing national housing crisis, governors of some states are taking housing supply initiatives into their own hands.

Governors Enact Bold Housing Initiatives

In Colorado and New York, both governors issued executive orders after key pro-housing initiatives failed in their states. Hawaii Gov. Josh Green has issued a state of emergency as the state grapples with the most expensive housing prices in the country.

Through these executive orders, these governors are using their powers to respond with urgency to a worsening housing shortage while sending a clear message to state legislators and constituents.

Colorado

As Colorado faces a housing shortage of 101,000 homes as of 2021 according to a newly released APA-sponsored Up For Growth report, increasing housing supply and affordability is among Gov. Jared Polis' top priorities. He reiterated his dedication to introducing housing legislation to a cohort of APA legislative appointees at the annual APA state legislative summit in late 2022.

More recently, the governor set the tone after issuing an executive order directing his administration to promote and streamline affordable, environmentally sound housing development in Colorado that's focused on transit. The executive order comes after his key housing bill, SB 213, failed in the legislature earlier this year. The governor hopes this action will spur a response from local governments to further streamline their permitting processes.

What's In the Executive Order

The order was crafted to speed up the construction process by ordering the state's Division of Housing to expedite contracts for affordable housing developers. It also calls on the Department of Local Affairs to reduce the approval time for affordable housing projects by nearly a third, to 90 days by July 2024. The process currently takes 240 days.

Key tenets of SB 213 are embedded in the governor's order but on a smaller scale by setting strategic growth goals. Among the ten strategic goals, two of them are important to note as they highlight the context of different regions and communities as well as supporting economic development in downtowns, commercial, and mixed-use areas.

Critics of SB 213 came from municipal officials of resort communities and localities who claimed the bill was too prescriptive and did not represent realistic goals that considered the uniqueness of their communities. Because of this pushback, there is a clear shift in the governor's order to increase density in areas that are equipped for growth, like downtown areas instead of rural resort communities.

Other strategic growth goals include incentivizing housing development, production, and preservation for every budget. One strategic goal aims to promote and expand reliable transit service that aligns with housing goals, while another goal focuses on reducing development pressures in agricultural areas.

The order also calls on all relevant state agencies to create an inventory of all policies that support housing development for local governments. These programs and policies will now be required to promote efficient development that aligns with the governor's climate goals. The agencies have until December 15 to report back to the governor on their findings.

The governor's order uses expenditures from funding that passed in 2022 with Proposition 123, which grants up to $290 million of tax revenue for affordable housing projects. Any more funding would have to be approved by the legislature.

Gov. Polis' actions are seen by many in the state as a precursor to legislative action that will be introduced in the 2024 legislative session. In comparison to the executive orders issued in other states, Gov. Polis is subtly flexing his executive powers to proactively solve the housing crisis in Colorado.

New York

Gov. Kathy Hochul is on a mission to increase the supply and affordability of housing in New York. New York has faced a severe housing crisis for decades with some of the highest rents in the country. One of her first actions as governor was to introduce the "Housing Compact" to resolve the housing shortage in the state by building 800,000 new homes over the next decade while removing barriers to housing production. The ambitious plan was included in the state's executive budget but was ultimately dropped from budget negotiations with lawmakers in April.

The Executive Order

The governor rebounded in July with several executive actions addressing the housing crisis to increase supply, create affordable housing, and promote broader housing growth. One executive order establishes preference in certain discretionary funding programs with up to $650 million available for localities that comply with a new "Pro-Housing Community" certification process. Localities that submit documentation that their housing stock has increased by one percent in the last three years will qualify for the certification. Localities that have not seen that level of growth can still qualify by passing a resolution stating their commitment to Pro-Housing principles. The certification process requires localities to resubmit their housing permit data annually to remain certified and qualify for prioritization.

Another executive order includes a program to advance residential projects that were suspended because of the expiration of a tax-incentive law for developers of housing projects in Gowanus, Brooklyn. Under the previous 421-a program, developments were to be finished by June 2026 but more than 8,000 apartments in Gowanus would not meet the deadline. The new executive action allows the state economic development agency to buy properties in Gowanus and lease them back to developers for the same amount they would have paid under 421-a.

The governor also introduced a requirement that all New York state entities identify the potential for their state-owned lands to support housing development or to support nearby housing developments. Additional executive orders initiate forthcoming administrative action to address regulatory hurdles to identify opportunities for greater efficiencies to promote housing growth, as well as the launch of a new portal to track housing and zoning data and information regularly.

The actions build on investments secured in the FY 2024 budget by the governor to address the state's housing crisis. The next steps for the state will fall on legislators to create policies that can mitigate housing production and funding for those projects. The governor has proven that she is willing to go above and beyond to ensure the goals of the housing compact are fulfilled. These executive orders are a strong response to legislators that the governor is willing to take risks to increase housing development in the state despite their hesitation towards the governor's plan.

Hawaii

In accordance to the executive order, Hawaii has the most unaffordable housing market and the highest cost of living in the country. Gov. Josh Green has released the most aggressive housing-related executive order of any governor this year. The emergency proclamation became active upon the governor's signature and will be in effect for the next 12 months and includes drastic changes to the state's land use authority in hopes that it will create more housing. The proclamation was issued before the wildfires broke out but disaster response may have an impact on the introduction of housing policy.

The governor's order suspends a half dozen state and county laws, primarily focusing on land use, historic preservation, and environmental review. The goal of the order is to produce 500,000 new homes in the next three to five years for residents of all income levels. Gov. Green cites a shortage of first responders, teachers, and healthcare workers as a state crisis as housing prices push essential workers off the island. Of all the executive orders, this one is the most controversial which may be intended as a catalyst to legislative action.

What's in the Executive Order

The proclamation creates an alternative process for state historic preservation review and environmental reviews, and suspends the state procurement code. It also calls on state housing agencies to streamline housing permitting processes, while allowing state and county agencies to hire third-party reviewers.

Under the order, multifamily residential development is allowed in business districts, and counties are permitted to approve district boundary amendments up to 100 acres. State agencies are further directed to prioritize housing reviews, plans, approvals, and permit processing while forging mutual aid agreements to address the housing crisis.

The governor also suspended a series of laws related to historic preservation, administrative supervision of boards and commissions, and county organization and administration. The state's land use commission and community development authority are also suspended under the proclamation. At a minimum, the governor's order preserved existing laws setting minimum requirements necessary for health, safety, and floodplain management.

The most controversial part of the order creates the Build Beyond Barriers (BBB) Working Group with a lead housing officer and a 22-person panel. The BBB Working Group effectively replaces state and county agencies in charge of administering land use and environmental programs. Nani Medeiros, Hawaii's chief housing officer, will serve as lead housing officer. Members of the group range from governmental officials, including those from the state office of planning and sustainable development, land use commissioners, the state historic preservation divisions, island burial councils, and county mayors, as well as non-governmental organizations like the Sierra Club and the Land Use Research Foundation.

The governor has promised the group will work transparently, but there is concern that the group will not be subject to Hawaii's Sunshine Law, which requires decision-making agencies to hold meetings in public. There is a requirement, however, that the working group must include one plan for public input and host at least one public meeting where input is accepted and documented, as well as one public notice that allows the public to review and comment for 30 days. This comment period, however, is limited to written public comment only.

The BBB Working Group will review or approve housing plans and permits while monitoring the progress of projects certified under the proclamation. The BBB may also approve infrastructure projects including roads, wells, sewers, and other utility installations that will serve housing projects. Working group meetings commenced on August 11, but there are worries about how the group should move forward in light of the devastating fires that leaders are calling one of the worst natural disasters in state history.

Another stipulation in the order allows the governor to change the proclamation at any time and requires the governor's signature every 60 days. Projects approved under the order will have up to three years from approval to begin building. However, certain projects will not require the group's approval. Projects developed by the Department of Hawaiian Homelands (DHHL) and the Hawaii Public Housing Authority (HPHA) can be approved by the lead housing officer, and developers would be required to adhere to DHHL and HPHA statutes.

Executive Order Status

The governor's actions have been met with new lawsuits as plaintiffs allege the governor exceeded his power to suspend laws during times of emergency or disaster. A member of the Hawaii Land Use Commission has joined forces with groups including the American Civil Liberties Union of Hawaii, the Sierra Club, Hawaii Advocates for Truly Affordable Housing, and E Ola Kakou Hawaii.

This lawsuit follows a similar complaint filed by Hawaii residents, which challenges the legal authority of the Chief Housing Officer and the BBB Working Group. Other critics question whether Hawaii's housing crisis presents an emergency. Hawaii Attorney General Anne E. Lopez believes that the proclamation is a lawful exercise of the governor's emergency powers and that the emergency rules that brought the BBB Working Group to life are valid. Lopez is basing her comments on Hawaii's "State of Emergency" statute that grants the governor broad power to declare a state of emergency, which allows the governor to suspend laws and adopt emergency rules.

While several states have made legislative changes to preempt zoning reform, Hawaii's course of action is the first time sweeping changes have been made to state laws and processes without approval from the state legislature.

Top image: Row apartments in Brooklyn. iStock/Getty Images Plus - cmart7327