High Barriers for Low-Rise Affordable Housing

I've sometimes wondered why towns often lack mixed-use, low-rise development.  San Anselmo, in its draft housing element update (PDF, p. 47), found that adding a second story of housing on top of its downtown retail district would add 45 units.  Other cities in Marin could do the same.  Such plans would bolster tottering downtown economies, place low-income residents near transit and amenities, and help defuse some of the painful debates over affordable housing we've seen lately, all while maintaining the "village character" of our towns.  It should be a win-win, but the federal agencies charged with enforcing affordable housing policy are making it harder.  From Streetsblog:

[Department of Housing and Urban Development] lending standards dictate that the total value of mixed-use development projects can’t be more than 15 to 20 percent retail. Fannie [Mae] caps retail share at 20; Freddie [Mac] at 25 percent. And these standards set the tone for the private market — a tone that is consequently skewed toward single-family housing, and away from the pent-up demand for urban development with walkable amenities.

In other words, the loans that go to support affordable housing cannot go towards the kind of mixed-use development that would most help the poor and the cities they live in.  Second-story units in downtown San Anselmo would be ineligible for these loans under current law, rendering any plans for such units moot.

Congress for the New Urbanism is leading a campaign to change these rules.  San Anselmo and the Marin County Council of Mayors and Councilmembers should lend their full support and join CNU.