The budget analysis proved DC spends 15:1 on rental over homeownership. The HPAP analysis showed the funding model is structurally broken. This piece answers the next question: what do you actually do about it?
Not theory. Not think-tank abstractions. Real policies from real cities with measurable outcomes. Some worked. Some didn't. All of them offer something DC can learn from.
DC's housing conversation is stuck in two lanes: build more multifamily rental, and give renters vouchers. Almost nobody is talking about how to redirect the development machine toward homeownership housing -- rowhomes, townhomes, condos, duplexes, small-lot single-family. The tools exist. Other cities have used them. DC hasn't.
Houston: 34,000 townhomes from one zoning change.
Houston reformed its minimum lot-size requirements. That's it. No massive zoning overhaul. No new government spending program. Just let developers build on smaller parcels.
The result was 34,000+ townhomes in 13 years. The typical redevelopment was affordable for moderate-income families. Houston's median home price stayed below the national median despite decades of explosive job and population growth. And less than 20% of new townhomes replaced existing single-family homes -- the majority went on formerly commercial, industrial, or vacant lots.
Why this matters for DC: DC's minimum lot sizes in R-1 through R-3 zones effectively prohibit the kind of infill rowhome and townhome development Houston enabled. DC has vacant and underutilized commercial parcels, especially in Wards 7 and 8, that could absorb exactly this type of development. Houston didn't need a housing trust fund to build 34,000 ownership units. It needed a smaller minimum lot size.
The condo liability wall.
This is the barrier nobody in DC's housing conversation talks about. Across the US, condo construction has collapsed. Not because of demand. Because of liability law.
Construction defect liability (CDL) makes condo development dramatically more expensive and risky than building apartments. The numbers are staggering:
Insurance companies assume all HOAs will eventually sue. So they price accordingly. The condos that do get built are luxury units where the purchase price can absorb the liability cost. Affordable condos? Not worth the risk.
How DC, Virginia, and Maryland compare.
Why Virginia builds condos and DC doesn't: Virginia's framework puts more responsibility on unit owners and less on developers. That directly lowers the insurance premium. DC's broad defect definition + association cost recovery + attorney's fees recovery creates the exact litigation environment that makes insurers charge 3-5x more. Reform recommendations: "right to cure" (let builders fix defects before litigation), shortened liability windows, and arbitration incentives.
Tax abatements that drove construction.
In 2000, Philadelphia enacted a 10-year property tax abatement on improvements for new construction and substantial rehabilitation. The market capitalized the abatement into roughly 10% higher home values for newly built units. An estimated 3,000+ units entered the pipeline.
In 2025, Mayor Parker expanded with a 20-year abatement for converting deteriorated commercial/industrial properties to residential. Boston adopted a similar model in 2023: 75% property tax reduction for 29 years for conversion projects.
DC application: A targeted tax abatement for developers who build for-sale (not rental) housing below a price threshold could shift the developer math. If you get a 10-15 year abatement for building condos or rowhomes priced under $500K, the cost disadvantage versus apartments narrows significantly. The abatement costs the city less than subsidizing the same families through rental vouchers for decades.
Montgomery County is moving.
In July 2025, Montgomery County passed ZTA 25-02 (More Housing N.O.W.) allowing duplexes, triplexes, townhouses, and small apartment buildings in formerly single-family-only zones. Effective November 1, 2025. The vote was 8-3.
The critical detail: Montgomery County explicitly framed this as creating homeownership opportunities, not just more rental. Missing middle types -- duplexes, triplexes, townhouses -- are more likely to create ownership pathways than the large multifamily buildings dominating new supply.
The competitive threat: If MoCo successfully creates missing middle homeownership housing while DC doesn't, the "export homeowners to the suburbs" pipeline accelerates. DC residents will have more affordable ownership options right across the border, with the same Metro access but lower prices and more housing types. Every family that buys in Silver Spring instead of staying in DC is tax revenue DC loses for decades.
Minneapolis: the honest lesson.
Minneapolis 2040 legalized duplexes and triplexes in all residential districts, removed parking minimums, and set building height standards. It was the most high-profile missing middle zoning reform in the country.
The results were modest. From 2020-2024: 87 new duplex/triplex/fourplex buildings creating 225 units. Of the nearly 21,000 new housing units permitted from 2017-2022, 87% were in buildings with 20+ units. Only 1% were in 2-4 unit buildings.
Home prices fell 16-34% versus the counterfactual. But researchers found no evidence of an actual increase in housing construction. The price moderation came from changed market expectations -- buyers bid less aggressively knowing supply could expand.
Legalizing missing middle housing is necessary but not sufficient. Developers still defaulted to large multifamily because the economics favor it. A 200-unit apartment building generates better returns than 10 duplexes. The missing middle needs both zoning permission AND financial incentives to compete.
DC can't just change the zoning and expect rowhomes to appear. It needs to pair zoning reform with tax incentives, density bonuses, or direct subsidies that make ownership-scale development pencil out.
Austin: supply works for rent, not ownership.
Austin added 120,000 housing units from 2015-2024 -- a 30% increase. It permitted 957 apartments per 100,000 residents from 2021-2023, the highest rate of any major metro. The result: rents in large apartment buildings dropped 7% in a single year (2023-2024), the greatest drop in any US metro. Class C (affordable) building rents dropped 11.4%. Inflation-adjusted rents fell 19% from 2021-2025.
But median home prices still sit above $500K. A buyer needs $140K+ income to afford the median. The boom was rental, not ownership.
Supply works. If you build enough housing, rents fall, and the benefits flow disproportionately to lower-income residents. But a rental construction boom does not create homeownership affordability. Rents and home prices are different markets. DC needs a supply strategy specifically targeted at ownership housing, not just more apartments.
ADUs as starter homes.
California's AB 1033 (effective January 2024) allows homeowners to sell ADUs separately from the main residence -- treating them like condominiums. SB 1211 lets multifamily properties add up to 8 detached ADUs. AB 1332 requires all cities and counties to establish pre-approved ADU plans.
ADUs as separate for-sale units create homeownership inventory at a fraction of new construction costs. A $200K ADU on an existing lot skips land acquisition, major infrastructure, and most entitlement costs. It's the cheapest path to new ownership housing.
DC application: DC allows ADUs but does not allow separate sale. Enabling ADU condo-ization would create a new class of starter homes in established neighborhoods -- especially in Wards 7 and 8 where lot sizes are larger and construction costs are lower. A homeowner builds an ADU, sells it for $200K, and a first-time buyer gets into the market. No HPTF funding needed.
DC's own plan (so far).
DC's Office of Planning is developing "Plan 2050" using a "place types" framework. The relevant housing elements:
- Guidance on increasing housing variety in single-family zones
- Promoting small condos and apartments
- Acknowledging that "creating more opportunities for starter homes is critical"
- New housing should accommodate variety of incomes near transit
But the zoning reality hasn't changed yet:
- Wards 3, 4, 5, 7, and 8 have large contiguous areas zoned exclusively for single-family
- Most residential areas where housing production is lowest are zoned exclusively for single-family homes (DC Policy Center)
- Between 2000-2020, DC added ~15% to its housing stock -- almost entirely by repurposing commercial/industrial land into high-density residential
- Homeownership neighborhoods (Hillcrest, Michigan Park, Riggs Park, Woodridge) trace back to the 1950s-60s and have seen almost no new development since
Plan 2050 acknowledges the problem. It has not yet changed the zoning. And even if it does, Minneapolis shows zoning alone won't be enough.
The playbook.
Based on every city studied, here's what a real homeownership supply strategy looks like -- organized by cost and timeline.
Tier 1: Zoning & land use (low cost, high impact)
Tier 2: Financial incentives (moderate cost, targeted)
Tier 3: Structural reform (high impact, longer timeline)
The million-person city needs people who stay.
Every city that successfully expanded homeownership supply shares one trait: they made a deliberate policy choice to incentivize ownership housing. Houston didn't accidentally build 34,000 townhomes. Philadelphia didn't stumble into a construction boom. These were policy decisions with measurable outcomes.
DC's current model -- build multifamily rental, provide vouchers, run out of HPAP money -- is a demographic revolving door. The city captures the renter years and exports the homeowner years. It keeps the consumption phase and loses the wealth-building phase.
A million-person city needs people who stay past age 35. Families who put down roots. Wealth that accumulates in neighborhoods, not just developer portfolios. Housing types that match how people actually live across their lifetimes. The tools to build that city exist. Other cities have used them. The question is whether DC will.
Have a response? I want to hear it: Book a conversation.
Christian Kosko is a mortgage advisor that founded the Mortgages in the District team of Fairway Home Mortgage, licensed in DC, MD, and VA. He has helped guide over 700 families with more than $420M in mortgage needs since 2016.
Christian Kosko | NMLS# 1415795 | Fairway Home Mortgage
NMLS# 2289 | Equal Housing Lender | Licensed in DC, MD, VA
Sources: Pew Charitable Trusts, Federal Reserve Bank of Minneapolis, Terner Center (UC Berkeley), Up For Growth, DC Policy Center, DC Office of Planning, Brookings Institution, National League of Cities, Urban Institute, Texas Tribune, Colorado Sun, Washington Post. Full source list available on request.