INCLUSIONARY ZONING part 8

INCLUSIONARY ZONING

Ted Koebel, professor of Urban Planning at Virginia Tech, is not opposed to Inclusionary Zoning, but believes the affordable housing gap would be better closed by citywide or regional zoning that allows for all ranges of housing price points and needs in several neighborhoods.
“Very few cities allow mixed density, mixed use development and if you want to do something creative, you slam into a wall of discouraging regulations,” he said. “We don’t do enough comprehensive planning to create applications of zoning that would allow you to do more complex development. Developers can do master planned developments and have them be very well representative of all housing needs.”

Koebel said American planning comes from a history of segregation of uses. Mixed use and mixed density development requires so many variances and zoning changes that developers throw in the towel before trying to serve a diverse market here.

“European zoning allows for mixed use by right. What they review are issues around massing of buildings, the relationships of building to its surroundings, how growth fits the transportation system,” said Koebel, noting that European cities maintained a mix of affordable housing for centuries.

Koebel said the idea that housing has to be segregated by income “is flat out wrong.”

“This is not social experimenting. Developers can create a well-planned mixed product, but most zoning regulations demonize mixed income, mixed use development. Our local regulations speak to one market – middle income and above. True Inclusionary Housing starts with regulations that allow developers to build more diverse products.”

Wright frequently writes about smart growth and sustainable communities. He and his wife live in a restored historic home in the heart of Miami’s Little Havana. Contact him at: stevewright64@yahoo.com

INCLUSIONARY ZONING part 7

INCLUSIONARY ZONING

In San Diego, a voter-approved initiative made affordable housing a big part of the development plan for the urban growth area to the north of the core city. In that low-rise growth area, which started being developed in 2003, 20 percent of the housing must be affordable.

Todd Philips, director of the San Diego Housing Commission’s Policy and Public Affairs Department, said the Inclusionary Zoning program for the north growth area has created nearly 1,000 affordable units and has a goal of creating another 1,000 before build out is completed.

He said affordable is mixed with market rate in the new developments. Typically, single family homes are market-rate and a pair of developers team up to make garden-style apartment condominiums to fulfill the affordable requirement.

“We look at comparability with the market rate and the affordable. Not that if the market rate has granite, the affordable has to too. But we do want the housing to be comparable in quality and appearance,” he said.

In 2003, San Diego created a requirement of 10 percent affordable units in the infill redevelopment areas in the old city, but that phase endured a brutal legal battle before developers settled on a formula to calculate payments in lieu of building affordable units.

Despite the challenges, Philips counsels politicians, planners, Realtors and others interested in creating Inclusionary Zoning in their hometowns to “shoot for the moon.”

“Even a 10 percent fee probably isn’t enough. We need to truly address what it costs to house a working class person.”

INCLUSIONARY ZONING part 6

INCLUSIONARY ZONING
John McIlwain, a senior fellow at the Urban Land Institute, said Inclusionary Zoning is a piece of the puzzle.

“It won’t produce the amount of affordable housing that’s needed by a long shot, but it’s still a very valuable tool if it’s done right.”

McIlwain said cities start with the premise that Inclusionary Zoning will provide affordable housing without hurting the market. He said that is true under two circumstances:

1) A market so strong, that Inclusionary Housing can be imposed on developers and they will still make a lot of money.
2) The more likely scenario that the city gives developers something in return to offset the loss of profits associated with selling units below market price.

“In most cases, bonus density is the key. That’s one way a city can do it without spending money,” he said.

McIlwain said because high rise condominiums are so expensive to build, it is often difficult to create affordable units within them. He also cautioned that a low income family will not be able to keep up with the high monthly fees levied by high rise condos

“The biggest pitfall is pushing income limits down too low,” McIlwain said. “The advice I can give is (to use Inlcusionary Zoning) for working people, the workforce earning 80 to 100 percent of area median income. Some other program can then be created to address affordable housing needs of people below 80 percent of median income.”

INCLUSIONARY ZONING part 5

INCLUSIONARY ZONING

Inland in Sacramento, where California’s capital city saw the percentage of affordable homes fall from 70 percent to less than 10, Inclusionary Zoning is applauded. Desmond Parrington, a planner with the City of Sacramento, said nearly 2,000 affordable houses and rental units have been created.

The city’s Mixed Income Ordinance, created in 2000, seeks to “prevent segregated communities through economic integration.” It also “aims to provide affordable housing that fits the character of market rate neighborhoods.”

“(The program) has been successful at creating new mixed income communities that might not otherwise be created when new housing is built, due to the high price of land and construction costs in California,” Parrington reported.
“It ensures that there are lower-income units that are part of market rate developments and that those units are built concurrently with the rest of the project.”

INCLUSIONARY ZONING part 4

INCLUSIONARY ZONING

In Housing Supply and Affordability: Do Affordable Housing Mandates Work?,
published by the Reason Public Policy Institute funded by a grant from the Home Builders Association of Northern California, researchers Benjamin Powell and Edward Stringham found data that suggests Inclusionary Zoning is a failure in Northern California because it:

• Produces few units. “The 50 Bay Area cities with Inclusionary Zoning have produced fewer than 7,000 units.”

• Has high costs. “The total cost for all Inclusionary Units in the Bay Area to date (is) $2.2 billion.

• Makes market-priced homes more expensive. “In high market-rate cities…Inclusionary Zoning adds more than $100,000 to the price of each new home.”

• Restricts the supply of new homes. “In the 33 cities with data for seven years prior and seven years following Inclusionary Zoning, 10,662 fewer homes were produced during the seven years after the adoption of Inclusionary Zoning.”

• Costs government revenue. “The total present value of lost government revenue due to Bay Area Inclusionary Zoning Ordinances is upwards of $553 million.”

INCLUSIONARY ZONING part 3

INCLUSIONARY ZONING

Thomas M. Menino, mayor of Boston, has created affordable housing via Inclusionary Zoning since 2000.

“Neighborhoods accept them well and they are well scattered about,” Geoffrey Lewis, a project manager with the Boston Redevelopment Authority, said of market rate buyer’s willingness to have affordable units created next to them.

“Our mayor wanted economic diversity throughout the neighborhoods,” he added. “They (city leaders) realize a strong middle class is going to be important to the continued vitality of Boston. The political leadership has been very strong. It understands that if we don’t get housing costs under control, it will be detrimental to our economy.”

Lewis cautioned that Inclusionary Zoning requires a strong housing market to make it work, noting “if the market isn’t strong, developers will look at Inclusionary as the thing that’s killing the project.”

INCLUSIONARY ZONING part 2

INCLUSIONARY ZONING

Susannah Levine and Adam Gross of Chicago’s Business and Professional People for the Public Interest believe in the power of Inclusionary Housing.

“Inclusionary housing is an extraordinarily effective and efficient way for cities to create affordable housing,” they said. (Author, consultant, former mayor of Albuquerque) David Rusk has calculated that if the 100 largest metropolitan areas in the United States had adopted typical Inclusionary Housing programs (a 15 percent set-aside on ten or more units), between 1980 and 2000 those 100 programs would have produced 2.6 million affordable units. That's almost twice as many units as were built using the most productive federal affordable housing program, the Low Income Housing Tax Credit. Montgomery County, MD, which has the longest-running Inclusionary Housing program in the country, has created more than approximately 11,000 affordable units since its program began in 1974.”

Derek Camunez, a Denver Realtor, sees things differently.

“We believe that mandating affordable housing is not nearly as effective as providing builder incentives such as tax breaks, creative zoning for higher densities and speeding up the permitting process for providing access to affordable housing,” he said.

“Denver's annual report on the Inclusionary Building Ordinance is finding that the affordable housing stock is not significantly increasing. Moreover, the city is discovering that they are not getting the desired cross cultural families taking advantage of this housing stock that they had hoped.”