As in many large cities across the United States, rents in the Puget Sound region have increased dramatically over the past decade, leaving 45 percent of renters cost burdened—meaning they allocate more than 30 percent of their incomes to rent. Seattle also has a relatively small share of housing units—about 8 percent—that provide stability through “project-based” federal support, such as the public housing program, the Section 8 program, and Low-Income Housing Tax Credits (LIHTC). In addition, about 3 percent of the city’s households receive housing choice vouchers to help them afford rent in private-market units.

These programs are meant to provide affordable housing by guaranteeing stable rents for households with low and moderate incomes, but there aren’t enough federally subsidized units to meet the growing need. And the subsidized units that do exist aren’t fairly distributed across the region, instead segregating families with low and moderate incomes.

To help understand what causes this concentration of subsidized units across the Puget Sound region, I analyzed the location of the roughly 80,000 federally supported, project-based affordable units, as well as the location of the almost 40,000 units in which voucher-supported households live. These units are disproportionately located in communities whose residents are more likely to be people of color and have lower incomes. In part, this outcome arises from the exclusionary zoning policies many local governments use, making it all but impossible to add housing units that aren’t single-family homes.

By concentrating affordable housing in specific communities—often with fewer resources—through land-use regulations, local governments are preventing people of modest means from freely choosing where they want to live and from accessing amenities such as high-quality schools, transportation, and parks.

Subsidized housing units in the Puget Sound are concentrated in the small area that allows multifamily housing

To identify the relationship between land-use regulations and the location of subsidized housing, I examined a database of zoning data and local characteristics we developed at the Urban Institute as part of a major examination of land-use policy in the Puget Sound. This database includes zoning characteristics of all municipalities within a half mile of existing and planned rail and bus rapid transit routes. I then compared zoning characteristics with data on currently available federally subsidized affordable housing units.

Almost 90 percent of the project-based subsidized housing units—most supported by LIHTC—are concentrated in zoning districts that allow four or more residential units per parcel. That proportion reflects the fact that most subsidized units are in large buildings, with the average LIHTC-funded project having 62 units in 2016.

But concentrating subsidized units in neighborhoods zoned for multifamily housing does not reflect how people in the region live overall. Only 3 percent of the region’s land allows for subsidized units, and 75 percent of the region’s population lives in neighborhoods that have few, if any, project-based subsidized housing.

I identified similar outcomes in the city of Seattle itself. There, zoning on less than 25 percent of land allows for residential buildings with four or more units. About 40 percent of the city’s population and its housing units are in those neighborhoods that allow for four or more units—but a remarkable 91 percent of project-based subsidized housing is located there as well.

In other words, subsidized housing is concentrated in just a small set of neighborhoods at both the regional and local levels—in part because of zoning.

The concentration of subsidized units in certain areas is reinforcing exclusion

The concentration of subsidized housing in neighborhoods with multifamily zoning is the consequence of localities intentionally excluding apartments—and thus subsidized, affordable housing. By comparing census tracts with and without federally subsidized affordable housing, I found several significant differences. Tracts with subsidized units have residents who were much more likely to be Asian, Black, or Hispanic. Households in those tracts were more likely to have lower median incomes and less likely to own their homes.

Tracts without subsidized units, however, are disproportionately more likely to have residents who are white and members of high-income households. These neighborhoods have zoned almost no land for four-or-more-unit buildings. Even after controlling for local racial demographics, housing construction density, and the share of households who own, a tract having project-based subsidized housing is strongly associated with that neighborhood being zoned for multifamily housing.

These results aren’t confined to project-based units. One-third of the region’s population lives in tracts with no voucher-subsidized households at all, meaning families with housing vouchers are essentially locked out of renting in those neighborhoods, even though vouchers are designed to allow residents with low incomes to live anywhere.

These neighborhoods without voucher-subsidized households are predominantly white and have an average median household income of $108,000 compared with just $71,000 in neighborhoods where households holding vouchers inhabit more than 2.5 percent of all units. These outcomes are likely produced by a mix of restrictive zoning policies and a lack of rental housing units.

This phenomenon is hardly constrained to localities in the Puget Sound. In the New York region, municipalities whose residents have disproportionately higher incomes and a higher share of white residents are much less likely to host subsidized affordable housing units than other communities.

Recent zoning changes show progress, but more work is needed

In 2023, the Washington state legislature passed—and the governor signed—House Bill 1110, which is designed to encourage small-scale apartments in municipalities statewide. This bill is similar to the “Plexify” zoning reform we developed as part of our Puget Sound study. The law generally requires the following by July 2024:

• localities with fewer than 25,000 residents in urban areas allow at least two units per parcel on all residentially zoned land
• localities with 25,000 to 75,000 residents allow at least two units per parcel on all residentially zoned land, or four units per parcel if at least one unit is affordable or the parcel is within a quarter mile of a major transit stop
• localities with 75,000 or more residents allow at least four units per parcel on all residentially zoned land, or six units per parcel if at least two units are affordable or the parcel is within a quarter mile of a major transit stop
• localities shall not require off-street parking for housing with two to six units within a half mile of a major transit stop

The law will effectively eliminate single-family zoning in the Puget Sound and encourage small-scale projects with subsidized housing, both important changes that build on recent legislation in California and Oregon. Yet without further reforms, it will remain illegal to build multifamily housing with seven or more units on 75 percent of the land area in the city of Seattle, and an even greater share in other parts of the region.

State policymakers interested in promoting a more even distribution of affordable housing, in Washington and elsewhere, can consider regulations requiring localities to allow larger buildings. They can also consider providing incentives to convert single-family homes in low-affordability neighborhoods to rentals and encouraging families with vouchers to live in them. Both strategies could help ensure that people—no matter their income—have the opportunity to live in the communities they desire.