How Zoning Overlays Protect Communities and Housing Affordability

Rezoning is one of the biggest conversations we are having as developers, non profits, and advocates for affordable and attainable housing. As cities around the country struggle to keep neighborhoods intact and provide housing in the face of skyrocketing property values, insurance premiums, and homeownership costs related to inflation, we are looking for regulatory solutions to ease affordability. One way that developers and law makers are seeking to solve the issue is through rezoning areas. 

Functional Zoning  

Most think of rezoning as adding more density, but that is a narrow view. Another far more impactful and sustainable way of protecting neighborhoods and cities is through redistribution or protection of communities. These can be designations or overlays that place regulations over development. These sound like opposing views of solving affordability, but when working in concert, they have the impact of protecting communities and keeping housing affordable. Methods of protection of communities can be historic designations or historic overlays. 

Historic Designations and Historic Overlays 

A historic designation is a special status and is much more than just a spot on the map; it can bring real benefits that can stabilize property values, and ensure that history is preserved for future generations, which it is accompanied by a historic overlay. The historic designation protects a specific area, but does not protect the larger swath around it. An overlay is a zoning tool that increases the regulations of a neighborhood. An overlay is less of a burden to apply for than obtaining a historic designation.

An overlay district can address specific and complicated local conditions or issues, including special waterways, airports, and transportation areas. Overlay districts ease the implementation of regulations in applicable areas without changing codes for multiple districts and can help maintain consistency in regulation across natural, historic, or infrastructural features. So where we have an overlay, there are more regulations, but they are specific to certain property features. 

Here’s a closer look at how overlays stabilize affordability and promote equitable and sustainable development. 

Stability in Property Values: Designations with overlays can stabilize property values from market fluctuations. Historic district protections shield them from gentrification because for a home or business to be built, restored, or replaced, it must meet certain criteria and be built with respect for the protections in the area.

Incentives and Grants: Homeowners in historic districts often have access to financial incentives, such as tax credits and grants for restoration and preservation efforts. These incentives can help offset the costs of maintenance and restoration. 

Preventing Overdevelopment: One key benefit of a historic designation and overlay is the regulation preventing overdevelopment and new construction. This helps maintain the neighborhood's character and scale. 

Controlled Appreciation: By preserving the integrity and limiting the types of modifications and new constructions, designations, and overlays help ensure that property values appreciate at a steady, manageable rate, thereby preserving a degree of affordability for existing residents.

Supporting Historic Overlays and Designations 

Our communities deserve protection from over-development, whether they need protection from environmental harm or historic communities. Cities like Dallas are in a critical period of time where housing affordability AND availability are overstretched. These methods help preserve communities as developers and advocates are working to find new solutions to housing in 2024. If you have thoughts or ideas, please send them to DCH, and share our vision with your community!