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 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.”

INCLUSIONARY ZONING part 1

INCLUSIONARY ZONING

By Steve Wright

Working as a firefighter, school teacher, retail salesperson or entry-level professional has never been considered dishonorable in America.

Wanting to live in a healthy community with access to the best jobs, schools, cultural activities, transit and more has always been viewed as a worthy pursuit in this nation.

But with a vast number of jobs offering middle to low wages and a great amount of new housing being built in price ranges reachable by only the middle and upper class, the gap between working class wages and desirable neighborhood affordability is widening each day.

From large urban centers to new growth areas, the police officer and the other backbones of the workforce cannot begin to dream of buying even a one bedroom condo or a small cottage.

To try to level the playing field, hundreds of cities have created Inclusionary Zoning (also known as Inclusionary Housing) as a way to create a percentage of affordable units intermingled with the market rate units and their skyrocketing price points.

Inclusionary Zoning has dozens of forms, but most typically a development with a certain threshold of units – often 10 or more – is required to offer affordable units – usually 15 percent --- to households earning roughly between 60 to 120 percent of the area median income.

Quite often, such mandatory Inclusionary Housing requirements come along with developer incentives such as increased density, expedited permitting and reduced or waived inspection fees.

To some, Inclusionary Zoning is the means to preserving a healthy mix of diverse incomes, ethnicities and work forces in increasingly pricey municipalities.

To others, Inclusionary Zoning is an impediment to growth, an interference on the free market and an exceedingly expensive cost-per-unit way of integrating lower incomes into high land value areas.