Mihai Andritoiu

With the pressure for affordable housing mounting in many markets across the country, local policy makers need to take action.

Soaring home prices in Silicon Valley have taken the region's housing stock beyond the financial reach of most local residents, fueling homelessness and generating resentment toward tech industry workers. In Palo Alto, California, for example, one modest 2-bedroom cottage recently sold for a whopping $2.6 million.

Now San Jose officials are moving to alleviate the problem by scrapping rules that bar homeowners from building rental units on their properties. The goal: Help people draw more income from their homes -- by far the largest investment for most Americans -- while increasing the supply of available housing.

Specifically, the city council is easing restrictions on where additional housing units, such as "in law" apartments, may be built, including allowing living areas on smaller lots where they were once banned. Two bedrooms will also be permitted on some larger lots where previously only one-bedroom units were allowed.

"Instead of handing out more fines and giving tickets, we want to look for opportunities to legalize those units," San Jose Mayor Sam Liccardo told KPIX.

San Jose isn't alone in looking for solutions to the shortage of affordable housing in many cities, especially high-cost metros such as Boston, New York and Washington. Cities around the U.S. are looking for ways to eliminate prohibitive regulations that often result in a decrease in the availability of housing, with zoning a major contributor.

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