Do Owner Occupancy Requirements Constrain Housing Supply?

Born out of a fear of absentee owners and rapacious investors, owner-occupancy requirements can have the contradictory effects of excluding renters from neighborhoods and limiting the number of rental units available.

1 minute read

November 1, 2022, 7:00 AM PDT

By Diana Ionescu @aworkoffiction


Duplex with twin two-story homes

karamysh / Duplex

A post on Brookings’ The Avenue by Anika Singh Lemar argues that owner-occupancy requirements, particularly on accessory dwelling units (ADUs), stifle housing supply and keep renters out of higher-end neighborhoods. As Lemar explains, “Restrictions on rentals appear in zoning codes, homeowners’ association rules, rules issued by subsidized lenders, and local ordinances.”

“Because renters typically have lower incomes than homeowners and are racially more diverse, owner-occupancy requirements affect the economic and demographic makeup of neighborhoods. Owner-occupancy requirements also prevent property owners from developing repeat expertise in acquiring and renovating existing housing stock to add ADUs; as a result, lenders are less likely to finance ADUs.” Lemar writes that owner-occupancy rules also reduce the housing supply by taking potential rental units off the market.

The article describes several court cases relevant to the debate over owner occupancy. “In the few cases where courts have interrogated the nexus between homeownership and home maintenance, they have refused to enforce owner-occupancy requirements.” Yet many continue  to uphold owner-occupancy requirements thanks to vague notions that owners will be better stewards of the property.

Lemar calls owner-occupancy requirements an example of “zoning creep,” the use of zoning to regulate “well outside the scope of land use and zoning regulations,” which has unintended negative impacts on equity and affordability.

Thursday, October 27, 2022 in Brookings / The Avenue

portrait of professional woman

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching. Mary G., Urban Planner

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching.

Mary G., Urban Planner

Get top-rated, practical training

Wastewater pouring out from a pipe.

Alabama: Trump Terminates Settlements for Black Communities Harmed By Raw Sewage

Trump deemed the landmark civil rights agreement “illegal DEI and environmental justice policy.”

April 13, 2025 - Inside Climate News

Logo for Planetizen Federal Action Tracker with black and white image of U.S. Capitol with water ripple overlay.

Planetizen Federal Action Tracker

A weekly monitor of how Trump’s orders and actions are impacting planners and planning in America.

1 hour ago - Diana Ionescu

Black and white photos of camp made up of small 'earthquake shacks' in Dolores Park in 1906 after the San Francisco earthquake.

The 120 Year Old Tiny Home Villages That Sheltered San Francisco’s Earthquake Refugees

More than a century ago, San Francisco mobilized to house thousands of residents displaced by the 1906 earthquake. Could their strategy offer a model for the present?

April 15, 2025 - Charles F. Bloszies

View of downtown Seattle with Space Needle and mountains in background

Seattle Voters Approve Social Housing Referendum

Voters approved a corporate tax to fund the city’s housing authority despite an opposition campaign funded by Amazon and Microsoft.

45 minutes ago - Next City

Hot air balloons rise over Downtown Boise with the State Capitol building visible amidst the high rises.

The Five Most-Changed American Cities

A ranking of population change, home values, and jobs highlights the nation’s most dynamic and most stagnant regions.

1 hour ago - GoodMigrations

View of cars in traffic from behind with visible tailpipe emissions

USDOT Repeals Emissions Monitoring Rule

A Biden-era regulation required states to report and plan to reduce transportation-related emissions.

3 hours ago - Smart Cities Dive