July 3, 2025
A perfect storm has fueled the housing crunch over the last decade in Hood River, Oregon.
Home to around 8,500 residents, the city along the Columbia River is known as the windsurfing capital of the world. High demand from homebuyers drawn to the area's beauty and recreation caused housing prices to skyrocket, while the surging popularity of short-term rentals squeezed an already tight housing supply, says Dustin Nilsen, AICP, the city's planning director.
A lack of buildable land compounded the problem. Hood River sits between the protected Columbia River Gorge National Scenic Area and farmland beyond the city's urban growth boundary, so land for more housing is scarce. "We really saw the need for the city to become increasingly active, and that meant broadening our efforts beyond just the zoning code and subdivision code," Nilsen says.
As rising demand and sparse inventory sends home prices soaring, communities across the country are finding creative ways to chip away at the problem. In Rhode Island, one town is rewriting its zoning codes to simplify the creation of affordable housing, while counties in southeastern Wisconsin are using a collaborative approach to take advantage of federal funding.
A multipronged approach
Planners in Hood River have used several strategies to increase housing affordability. After placing limits on short-term rentals, city officials turned their attention to the high cost of land by introducing a 1 percent construction excise tax (CET) for affordable housing in 2017. Three years later, the income from the CET and state funding allowed the city to finance a loan to buy and rezone 7.25 acres for multifamily housing for $1.2 million, Nilsen says.
Mariposa Village provides 130 units — a mix of studios and one-, two-, and three-bedroom townhomes designed to foster multigenerational lifestyles. Rendering courtesy of Holst Architecture.
Hood River donated the land to Community Development Partners, an affordable housing developer, and the nonprofit Columbia Cascade Housing Corporation. Construction began this spring on the $75.8 million Mariposa Village, which will bring 130 affordable units to the city.
Hood River also created the Westside Urban Renewal District in 2023, with hopes of collaborating on two more projects in the future. The district authorized a borrowing limit of $146.7 million to fund projects identified in the city's affordable housing strategy, parks master plan, and transportation plan.
Increasing affordable housing is a long game, Nilsen says, "and the first step is acknowledging there is an issue to be faced, and that the community has a role in resolving it."
Funding access
Areas like Waukesha County, Wisconsin, have teamed up with their neighbors to take advantage of federal funding. Located near Milwaukee, the third-most populated county in the state faces similar housing challenges as that of larger communities but fails to qualify on its own for the federal HOME Investment Partnerships Program because of its size, says Kristin Silva, the county's community development manager.
Domenica Park, the former site of the century-old Aeroshade factory, will accommodate 20 future homes. Images courtesy of Habitat for Humanity of Waukesha & Jefferson Counties.
This duplex is one of two townhomes built in Domenica Park's subdivision, in addition to 16 single-family houses, ranging from ranch-style to multi-story homes.
A HOME consortium with adjacent Jefferson, Washington, and Ozaukee counties gives member counties direct access to funding. Governed by a 12-person board with three representatives from each county, the consortium provides downpayment, home rehabilitation, and rental assistance to homeowners and renters, as well as low-interest loans and grants to affordable housing developers. Waukesha County is the administrative entity for the consortium, and funds are awarded to each community on a first-come, first-served basis.
The partnership has provided partial funding totaling $10.6 million for 52 projects since 2000, boosting the affordable housing stock by more than 1,300 units, Silva says. Of those, 279 were funded solely through the HOME consortium, including 11 in Habitat for Humanity's Domenica Park subdivision that is now under construction.
Directly tapping HOME funds gives communities more control over how money is spent than going through state-administered programs, Silva says. For example, the consortium typically asks developers to set aside HOME-funded units for the most vulnerable residents, such as people with disabilities or the lowest incomes.
Silva finds HOME to be a great tool for boosting housing supply, and she hopes planners in small communities consider the option more often. "Like any federal funding, it has a lot of regulations attached to it," she says, "but it can fit with a variety of other funding sources pretty easily to make a project more affordable."
To learn how communities across the U.S. are speeding up housing development, read the Housing Supply Accelerator Playbook.
Zoning reform
Out-of-state buyers in Portsmouth, Rhode Island, have increasingly plunked down cash for million-dollar homes since the 2020 pandemic. Now, officials are rewriting zoning codes to increase availability and bring regulations in line with a set of sweeping affordable housing laws the state passed in 2023 and 2024.
The town relaxed setback requirements, reduced nonconforming lot setbacks, and increased maximum lot coverage standards. It also allowed accessory dwelling units (ADUs) "by right."
The changes have streamlined the zoning application process, making it easier for residents who are "stuck in a 1,200-square-foot home with two kids, two dogs, and don't really have the financial means to get a bigger house" to stay in Portsmouth, says Town Planner Lea Hitchen.
Portsmouth also increased flexibility for developers to convert commercial and institutional buildings to residences. Hitchen hopes the reforms will encourage more adaptive reuse, such as the ongoing conversion of a former schoolhouse into a community center with 54 affordable units for older adults.
The new zoning changes and increased flexibility for adaptive reuse developers are already showing promise. Hitchen says nearby Roger Williams University is looking to repurpose a shuttered hotel previously used as an off-campus dormitory. "And obviously I'm going to raise my hand and say, 'Hey, it would be great for affordable housing,'" she says.
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