Inclusionary housing

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Inclusionary zoning (IZ), also known as "inclusionary housing," is an American term which refers to municipal and county laws that encourage or require a given share of new housing to be made affordable by people with low to moderate incomes. The term inclusionary zoning indicates that these ordinances seek to counter exclusionary zoning practices, which aimed or aim to exclude particular demographic groups or low-cost housing from a municipality through the zoning code.

There are variations among different inclusionary zoning programs. Firstly, they can be mandatory (e.g. MIZ, Mandatory Inclusionary Zoning, in Seattle) or voluntary.  There are also variations among the set-aside requirements, affordability levels coupled with the period of control. In order to encourage engagements in these zoning programs, developers are awarded with incentives for engaging in these programs, such as density bonus, expedited approval and fee waivers.

 

San Francisco 

San Francisco Office of the Controller. "Inclusionary Housing Working Group: Preliminary Report." September 2016. 
http://sfcontroller.org/sites/default/files/Preliminary%20Report%20September%202016.pdf. 

Mark Vallianatos‏ notes:  "the SF prop C inclusionary study showed annual benefits of $44 million in BMR units, annual increased housing costs of $1.8 billion."
 

 

Boston

Boston's Inclusionary Development Policy, introduced in 2000, requires any residential development that includes ten or more units and that receives financing from the city, is on city property, or needs an exception to current zoning regulations to designate fifteen percent of its market rate units as affordable housing (Zhorov 2016). Rather than adhering to these base stipulations, developers have the option, in some cases,make a monetary contribution for as much as $380,000 per unit (depending on where the proposed development is located) to a fund for affordable housing or to build affordable housing units off-site at an increased ratio (up to 18 percent of the total) (Zhorov 2016). 

Boston's inclusionary strategy is aimed at providing affordable housing for middle-income earners in attractive areas of the city from which they would otherwise be shut out (Zhorov 2016). The plan reserves housing spots for residents making up to 100 percent of the Area Median Income (AMI) as well as a certain number of units for people making 70 percent or less of the AMI (Zhorov 2016). 

 

New York City

New York City Council approved a mandatory inclusionary housing program in 2016. The approved measures were designed to take into account a situation in which the City's population had grown by one million people since 1990, along with steadily rising housing costs and large numbers of residents on waiting and lottery lists for public housing and private affordable units (New York City Council 2016). Unlike Boston's strategy, New York's inclusionary housing scheme specifically targets lower income residents with a Deep Affordability Option that requires higher percentages of building floor areas to be set aside for residents making an average of 40 percent of the AMI (New York City Department of City Planning 2016) (New York City Council 2016). "The Department of City Planning and the Department of Housing Preservation and Development have stated that the central goals of the proposal are to create more economically diverse communities across New York City and to ensure that a share of new housing in growing communities is affordable" (New York City Council 2016). The policy is applied to areas rezoned to allow the construction of more residences than currently allowed (New York City Council 2016). Areas under consideration at this writing include  "East New York in Brooklyn; Inwood and East Harlem in Manhattan; Flushing West and Long Island City in Queens; the Jerome Avenue corridor in the Bronx; and Bay Street in Staten Island" (New York City Council 2016). In addition to the program being applied to areas of rezoning, it would also apply to private rezoning applications that involve an increase in density (e.g. in a situation where a developer was applying to build a residential structure with more units than currently allowed) (New York City Council 2016).

 

Portland

In its 2016 Legistlative Session the State of Oregon lifted it preemption on inclusionary zoning. In response, the City of Portland has initiated an Inclusionary Housing program for the city, under the direction of the Portland Housing Bureau. Oregon and Texas were the two states in the nation that did not allow for the use of inclusionary zoning.

 

Critiques

That inclusionary zoning alone ...

  • Is an inadequate measure to meet the need (especially for low-income residents) for affordable housing, since it is a mixed model (usually accounting for the creation of many more market rent units than those designated as affordable)
  • Provides a "Bandaid solution" to  deeper systemic problems
  • Fuels gentrification and pushes up land values and housing costs in the areas in which it is implemented 
  • Where it drives up pricing inclusionary zoning may result in restricting housing supply
  • May incentivize the destruction of existing (e.g. rent-controlled) affordable housing

"The bigger concern about inclusionary zoning is that it tends to drive up the cost of building new housing, thereby restricting supply, and actually aggravating market-wide affordability problems.  While the comparative handful of new units set aside for low or moderate income households are visible, there is an invisible cost in the form of units not built, and consequently, higher market rents for everyone. "

- Economist, Joe Cortright

 

 

References

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