How to boost housing affordability in Sarasota, Florida

As the Sarasota City Commission once again considers how to address the city’s affordable housing crisis by once again focusing on timid measures that subsidize a handful of units that are barely noticeable compared to rising demand, it’s time for some new thinking. The good news is that this is a problem many cities around the country have had great success with a few simple policies. 

Sarasota’s fundamental problem is that the city simply will not issue permits for affordable housing built by developers. They won’t let the private sector build affordable housing commensurate with demand, so the city feels compelled to subsidize the affordable housing it won’t otherwise allow the market to build. It’s bizarre, to say the least. 

As Ed Pinto, a Sarasota resident and co-director of the American Enterprise Institute’s Housing Center, has documented, only 4% of the housing for which the city issued permits over the last five years was single-family attached—not a single-family home, but duplexes, quadplexes, or apartments. 

Instead, 96% of permits were for single-family detached homes. 

Even worse, the handful of single-family attached homes permitted had median values of $425,000, hardly affordable. 

Unfortunately, many other cities commit similar folly, hence nearly 42 million American households in the U.S., including renters and owners, are “cost-burdened,” spending more than 30% of their income on housing. 

One result of these decisions is sprawl. Workers seeking affordable housing must live where local governments allow housing supply to keep up with demand and, in turn, face long commutes. 

In Sarasota County, the jobs are concentrated in Sarasota, but many reports have documented that almost all affordable housing is in North Port or the Ellenton area of Manatee County. By not allowing affordable housing in Sarasota, the city is massively increasing sprawl, conversion of undeveloped land, and emissions of greenhouse gases from those long commutes. 

Some easy fixes

Sarasota is a clear case of what is often called a “missing middle” housing problem. The “missing” component of the name refers to the severe housing shortage of homes affordable to middle-income earners and the rapid decline of medium-density development. 

“Middle” refers both to the modest density of units added and the middle-income earners who are the target residents of these homes. The answer is missing middle housing policies that incrementally increase residential density in neighborhoods near commercial land uses while accounting for homeowners’ interests. Florida’s Live Local Act of 2023 (LLA) was aimed exactly at addressing missing middle housing, aggressively incentivizing additions to supply via additions to workforce housing. 

Live Local allows developers to override local use restrictions if they are building affordable housing. Specifically, it allows for residential development on plots zoned for commercial, mixed-use, or industrial use as long as 40% of units are rental units that will be affordable for 30 years. One of the primary intentions of this bill is to allow working individuals to live closer to their place of employment.

The city of Sarasota should work with developers to identify parcels that meet these criteria and speed them through the approval process to develop duplexes, quadplexes, and apartment buildings. This would do far more for housing affordability than city funds subsidizing a handful of units. 

At the same time, the most common type of zoning reform to help with missing middle housing is loosening regulations around accessory dwelling units (ADUs). ADUs are smaller residential buildings constructed on the same plot of land as a larger single-family home, typically housing one or two people. The popularity of ADUs is mainly “infill.” This means they do not require denser housing development but rather provide property owners with the opportunity to build another unit on their land. 

Instead of radical changes to the zoning landscape and massive, intrusive construction projects, accessory dwelling unit reform allows additional housing to be added to existing and fully developed neighborhoods. ADUs are also a popular option for non-rental housing for extended family members, so much so that they are often colloquially referred to as “granny flats” or “in-law units.”

Accessory dwelling unit reform is an affordable housing policy tool that promotes mutual gain and voluntary additions to the housing supply. When policy allows ADUs to be rented out, their smaller size and building costs mean lower rents for tenants when compared to traditional single-family homes. 

This feature makes them especially suitable for lower-income individuals, should they be rented out. The income generated from collected rents is also a clear benefit to the primary homeowner — now functioning as a landlord with one property.

Austin, Texas, as an example of increasing supply

Austin has made leaps in multifamily permitting. In doing so, the city has seen an explosion of multifamily housing in response to the recent influx of young adults aged 20-34 who prefer renting over single-family homeownership. This increase in apartment construction and other rental unit construction, driven by relaxed zoning regulations and a pro-housing policy shift, has led to a notable decline in rents across the region. 

Between 2021 and 2023, the Austin metro area permitted approximately 957 apartments per 100,000 residents, far outpacing other major U.S. metropolitan regions. This boom resulted in tens of thousands of new units, with around 32,000 apartments delivered in 2024 alone, boosting the housing stock by about 5%.

As a result, average rents have fallen significantly. Data from Zillow and other real estate firms indicate that Austin rents dropped by approximately 4% to 7% year over year, with some reports noting a decline of up to 15% from their peak in August 2022. 

The increased supply stems from policy changes, including streamlined permitting, reduced parking mandates and upzoning measures such as allowing up to three units on lots previously restricted to one and reducing minimum lot sizes. The accompanying figure from AEI’s Housing Center shows how much better housing affordability fared in Austin compared to many other growing cities.

How multifamily developments effect property values

Despite common perceptions, research has consistently shown that multifamily developments do not necessarily decrease property values and can even increase them, according to a review of all research by the Joint Center for Housing Studies at Harvard. While there are anecdotal cases where property values have declined upon entry of a multifamily residence, “in general, neither multifamily rental housing, nor low-income housing, causes neighboring property values to decline.” 

Also, Sarasota is rich with examples of other ways to offer people an option to choose single-family housing neighborhoods or protect property values: homeowners associations, condo associations, and deed restrictions. These all allow the property owners in a neighborhood to agree to restrictions on density, and anyone buying in those areas must abide by those restrictions on their property rights. 

This is a much better way to offer people that option than broad-based restrictions across broad swaths of the city under zoning and development rules. The latter allows a small group of vocal activists to persuade the City Commission to limit their neighbors’ options, whether they want them or not. This is always and everywhere the cause of housing affordability problems. 

With the simple changes in attitudes and actions discussed above, much more affordable housing could be unleashed without even changing the city code. 

It’s time for the Sarasota City Commission to stop focusing on penny-ante solutions like subsidizing a trivial number of affordable housing units and start allowing the missing middle workforce housing to be built. 

A version of this column first appeared in the Sarasota Observer.

The post How to boost housing affordability in Sarasota, Florida appeared first on Reason Foundation.