Inclusionary zoning for affordable housing: Are you asking the right questions?

Mon, 2017-05-22 12:46 -- Compassionate C...

Policies that force developers to incorporate affordable housing into new projects in exchange for incentives aren't new. But as the affordable housing crisis heats up, more cities are looking at inclusionary zoning as a partial solution.  Katy Miller, a regional coordinator with the U.S. Interagency Council on Homelessness (USICH), offers some insights, including questions city officials should be asking. – Philip Bane


Earlier this month, as city leaders in New Orleans were looking at inclusionary zoning to get more workforce housing into neighborhoods with access to public transportation and other services, the Louisiana Senate passed legislation that essentially bans local governments from implementing developer mandates like those under consideration in New Orleans. And last month a free market think-tank filed a lawsuit against Metro Nashville over its new policy to spur more affordable housing.

These scenarios illustrate the challenge inclusionary zoning advocates face as cities across the country struggle to fill increasingly large gaps in the demand for affordable housing.

In a post on the USICH website, Katy Miller points out what can be seen in many cities today. There's lots of housing development occurring, but the number of units being built that are truly affordable to low-income families and those exiting homelessness does not meet the demand.

She also highlights a number of questions to consider if inclusionary zoning is on your city's radar and reports how several cities are handling some of the issues she raises. Here's one example:

Do you want inclusionary units to be set aside in all new market rate developments or just those of a particular size?

"It is important," Miller writes, "to give developers clear guidance on the size and type of project that would be included in this policy, the percentage or exact number of units to be set aside in a building, and whether the policy is mandatory or voluntary." She points to several approaches cities are taking:

  • Portland, Oregon, just adopted inclusionary zoning policy that requires any new multi-family buildings of 20 units or more to set aside 20% of the units for households making 80% Area Median Income (AMI). The policy also includes an option for developers to pay a fee instead of including units in the building, which is another possibility cities should consider.
  • Washington, D.C.’s Inclusionary Zoning Program requires new condominium or rental properties over 10 units or existing properties expanding by 50% or more or adding 10 units or more to devote 8 -10% of the units to low-to-moderate income people who are District residents or who work in the District. “Low-to moderate” is defined as 50% to 80% of the Washington, D.C .Metropolitan AMI.
  • New York City’s Inclusionary Housing Program includes two options, one for voluntary participation, where a development will receive a density bonus for participating, and the other mandatory inclusion of a share of new housing that will be permanently affordable in medium and high density areas that are rezoned to increase new housing production. The city has also published an inclusionary housing map (pictured above) to provide the public with information on sites.

More considerations
Among other questions Miller recommends cities consider:

  • Have you done an assessment of the housing need across income levels in your community to know how many new units are needed and at what level of affordability?
  • For developers who opt to include affordable units within the building, is there clear guidance in the policy on the quality and location of the units?
  • Have you considered other affordable housing incentives such as bonus density or waivers?

Read Miller's post here.

More from around the web:

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This article is from the Council's Compassionate Cities initiative which highlights how city leaders and other stakeholders can leverage smart technologies to end suffering in their communities and give all citizens a route out of poverty. Click the Compassionate Cities box on our registration page to receive our weekly newsletter.

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Comments

Submitted by Matthew Webster on
Portland, Washington and New York City all have poor housing affordability when comparing median income with median house prices. The original contributor to this is their land use policies. As land use is restricted through public policy, the value of the land goes up when demand is not met thus leading to the buyer to pay more for the land. Density is often cited as the ability to make housing cheaper but unfortunately the land owner will be well aware of this and will calculate the value their land is capable of supporting with respect to housing units. Making a plot of density (i.e. average number of people per city as its defined urban extent) versus the median house price divided by the median income (known as the housing median multiple) shows that as density increases, housing become less affordable across the developed and developing world. This empirical evidence is backed up by published urban economics research by, for example, Dimitris Emmanuel's 1985 paper 'Urban Land Prices and Housing Distribution: Monopolistic Competition and the Myth of the 'Law' of Differential Rent' in the Urban Studies Journal. Inclusionary zoning is a policy response that obscures the cause of the problem and also requires some people pay more for their housing so as to subsidize the land costs imposed on lower income people when both groups of people may end up with the same product. It fails to recognize the fundamental economic literature by Mills, Cheshire, Emmanuel, Evans and others that concludes land use policies affect the middle, and especially, low income people. It is more equitable and fairer to allow land supply to transparently meet demand for all parts of the community and avoid inclusionary zoning which has in any case not solved the housing affordability problem in the cities cited in this article.