Inclusionary zoning
Inclusionary zoning (IZ) is
In practice, these policies involve placing
Most inclusionary zoning is enacted at the municipal or county level; when imposed by the state, as in Massachusetts, it has been argued that such laws usurp local control. In such cases, developers can use inclusionary zoning to avoid certain aspects of local zoning laws.
Historical background
During the mid- to late-20th century, new
By denying lower income families access to suburban communities, many feel that exclusionary zoning has contributed to the maintenance of
In many of the communities where inclusionary zoning has been put into practice, income requirements allow households that earn 80–120% of the median income to qualify for the "affordable" housing. This is because in many places high housing prices have prevented even median-income households from buying market-rate properties. This is especially prominent in California, where only 16% of the population could afford the median-priced home during 2005.[6]
Potential benefits and limitations of IZ Policies
Potential benefits
- Poor and working families would have access to a range of opportunities, including good employment opportunities, good schools, comprehensive transportation system and safe streets [7]
- Alleviating the problem of inadequate supply of Affordable Housing
- Avoiding economic and racial segregation, which helps reducing crime rate, failing schools and improving social stability
- Relatively small amount of public subsidies required for adopting IZ as a market-based tool [8]
Potential limitations
- Low production of affordable housings, which produced approximately 150,000 units over several decades nationwide,Housing Choice Vouchers that helps approximately two million households and the LIHTCprogram that has produced over two million affordable homes
- Unstable production of affordable housing that highly affected by local housing-market conditions [10]
- Very little research on outcomes for participants in these programs. Although these affordable housing programs, by definition, offer lower-cost units that municipalities promote as inclusive, the deed restrictions imposed on participants in these programs result in additional economic disparities and other hardships not faced by market-rate homeowners. [11]
Economics
Economists state that IZ functions as a
Differences in ordinances
Inclusionary zoning ordinances vary substantially among municipalities. These variables can include:
- Mandatory or voluntary ordinance. While many cities require inclusionary housing, many more offer zoning bonuses, expedited permits, reduced fees, cash subsidies, or other incentives for developers who voluntarily build affordable housing.
- Percentage of units to be dedicated as inclusionary housing. This varies quite substantially among jurisdictions, but appears to range from 10–30%.
- Minimum size of development that the ordinance applies to. Most jurisdictions exempt smaller developments, but some require that even developments incurring only a fraction of an inclusionary housing unit pay a fee (see below).
- Whether inclusionary housing must be built on site. Some programs allow housing to be built nearby, in cases of hardship.
- Whether fees can be paid in lieu of building inclusionary housing. Fees-in-lieu allow a developer to "buy out" of an inclusionary housing obligation. This may seem to defeat the purpose of inclusionary zoning, but in some cases the cost of building one affordable unit on-site could purchase several affordable units off-site.
- Income level or price defined as "affordable," and buyer qualification methods. Most ordinances seem to target inclusionary units to low- or moderate-income households which earn approximately the regional median income or somewhat below. Inclusionary housing typically does not create housing for those with very low incomes.
- Whether inclusionary housing units are limited by price or by size (the City of Johannesburg for example provides for both options)[12]
- Appearance and integration of inclusionary housing units. Many jurisdictions require that inclusionary housing units be indistinguishable from market-rate units, but this can increase costs.
- Longevity of price restrictions attached to inclusionary housing units, and allowable appreciation. Ordinances that allow the "discount" to expire essentially grant a windfall profit, similar to what market-rate owners would get. Municipalities dislike this because it would mean they would have to create more affordable units. Instead, participants in these programs subsidize themselves, relieving municipalities of the financial burden to keep these programs running. However, placing the brunt of the work and subsidies on the people in these programs raises questions. It can trap individuals in public housing programs, making it nearly impossible for them to move out until they pass away. If they could not afford market-rate housing 15 years ago, staying in a unit that restricts appreciation becomes a significant barrier to leaving public housing.[13] In addition, requiring participants to do maintenance and take on all other homeowner liabilities on a home that is economically similar to a rental (since there is limited appreciation minus HOA fees, interest, taxes, etc) can add further housing related stress.
- Whether housing rehabilitation counts as "construction," either of market-rate or affordable units. Some cities, like New York City, allow developers to count rehabilitation of off-site housing as an inclusionary contribution.
- Which types of housing construction the ordinance applies to. For example, high-rise housing costs more to build per square foot (thus raising compliance costs, perhaps prohibitively), so some ordinances exempt it from compliance.
Alternative solutions
While many
Inclusionary zoning aims to reduce residential economic segregation by mandating that a mix of incomes be represented in a single development.
Controversy
Inclusionary zoning remains a controversial issue. Some affordable housing advocates seek to promote the policies in order to ensure that housing is available for a variety of income levels in more places. These supporters hold that inclusionary zoning produces needed affordable housing and creates income-integrated communities.[citation needed]
Yet other Affordable Housing advocates state the reverse is true, that Inclusionary Zoning can have the opposite effect and actually reduce affordable housing in a community. For example, in Los Angeles, California, inclusionary zoning apparently accelerated gentrification, as older, unprofitable buildings were razed and replaced with mostly high-rent housing, and a small percentage of affordable housing; the net result was less affordable housing. In New York, NY, inclusionary zoning allows for up to a 400% increase in luxury housing for every unit of affordable housing and for an additional 400% luxury housing when combined with the liberal use of development rights. Critics have stated the affordable housing can be directed to those making up to $200,000 through the improper use of an Area Median Income, and used as political tools by organizations tied to various politicians. New York City communities such as Harlem, the Lower East Side, Williamsburg, Chelsea and Hell's Kitchen have experienced significant secondary displacement through the use of Inclusionary Zoning.[citation needed]
Real Estate industry detractors note that inclusionary zoning levies an indirect tax on developers, so as to discourage them from building in areas that face supply shortages. Furthermore, to ensure that the affordable units are not resold for profit, deed restrictions generally fix a long-term resale price ceiling, eliminating a potential benefit of home ownership.[citation needed]
Free market advocates oppose attempts to fix given social outcomes by government intervention in markets. They argue inclusionary zoning constitutes an onerous land use regulation that exacerbates housing shortages.[citation needed]
Homeowners sometimes note that their property values will be reduced if low income families move into their community. Others counter consider their concerns thinly-concealed
Some of the most widely publicized inclusionary zoning battles have involved the REIT AvalonBay Communities. According to the company's website, AvalonBay seeks to develop properties in "high barrier-to-entry markets" across the United States. In practice, AvalonBay uses inclusionary zoning laws, such as the Massachusetts Comprehensive Permit Act: Chapter 40B, to bypass local zoning laws and build large apartment complexes. In some cases, local residents fight back with a lawsuit.[1] In Connecticut, similar developments by AvalonBay have resulted in attempts to condemn the land or reclaim it by eminent domain.[15] In most cases AvalonBay has won these disputes and built extremely profitable apartments or condominiums.
Other legal battles have occurred in California, where many cities have implemented inclusionary zoning policies that typically require 10 percent to 15 percent of units to be affordable housing.
Citizen groups and developers have also sought other ways to strengthen or defeat inclusionary zoning laws. For example, the initiative and referendum process in California allows citizen groups or developers to change local ordinances on affordable housing by popular vote. Any citizens or interest groups can participate in this process by gathering at least the required number of signatures so that the measure proposed can qualify to be on the ballot; once enough signatures are submitted and the ballot measure is cleared by election officials, the ballot measure is typically placed on the ballot for the upcoming election.[20] One recent case is Proposition C in San Francisco. This ballot measure was placed on the ballot for the June 2016 California primary election. Passed in June 2016, this proposition amends the City's Charter to increase the requirement for affordable housing for development projects of 25 units or more.[21]
The clash between these various interests is reflected in this study published by the libertarian-leaning Reason Foundation's public policy think tank, and the response of a peer review of that research. Local governments reflect and in some cases balance these competing interests. In California, the League of Cities has created a guide to inclusionary zoning which includes a section on the pros and cons of the policies.
Failure in improving social integration coupled with increasing social cost
It is suggested that IZ policies may not effectively disperse low-income units throughout the region, which actually contradicts the aim of the policy itself.[22] For instances in Suffolk County, it is found that there is a spatial concentration of IZ units in poor neighbourhood coupled with higher proportions of Black and Hispanic, which are considered the minorities.[22] Furthermore, 97.7% of the IZ units were built in only 10% of the census tract from 1980 to 2000, which is area with the lowest-income neighbourhood coupled with clustering of minorities.[22] It is indispensable to notice that housing policies is controlled by local government rather than regional government in Suffolk County, therefore without regional coordinations of housing policy, it fails to consider the inter-municipality distribution of low-income household within the county.[22] Besides, density bonuses given to property developers for the provision of IZ units have intensified the concentration of affordable units in poor neighborhood (Ryan & Enderle as cited in Mukhija, Das, Regus et al., 2012).[23] This shows that IZ policies may fail to disperse the low-income distributions when it is carried out without taking regional coordination into account.
Moreover, with density bonuses allocated to property developers for the provision of IZ units, it implies the community would be bearing the cost of increasing population density and sharing existing infrastructure.[23]
In practice
Examples from the USA
More than 200 communities in the United States have some sort of inclusionary zoning provision.[24]
Montgomery County, Maryland, is often held to be a pioneer in establishing inclusionary zoning policies. It is the sixth wealthiest county in the United States, yet it has built more than 10,000 units of affordable housing since 1974, many units door-to-door with market-rate housing.[25]
All municipalities in the state of Massachusetts are subject to that state's General Laws Chapter 40B, which allows developers to bypass certain municipal zoning restrictions in those municipalities which have fewer than the statutorily defined 10% affordable housing units. Developers taking advantage of Chapter 40B must construct 20% affordable units as defined under the statute.[26]
All municipalities in the state of
A 2006 study, found that 170 jurisdictions in California had some form of inclusionary housing.[28] This was a 59% increase from 2003, when only 107 jurisdictions had inclusionary housing.[29] In addition, state law requires that 15% of the housing units produced in redevelopment project areas must be affordable. At least 20% of revenue generated from a redevelopment project must be contributed to low-income and moderate-income housing.[16] However, Governor Jerry Brown passed AB 1X 26 that dissolved all redevelopment agencies on February 1, 2012.
However,
Madison, Wisconsin's inclusionary zoning ordinance respecting rental housing was struck down by Wisconsin's 4th District Court of Appeals in 2006 because that appellate court construed inclusionary zoning to be rent control, which is prohibited by state statute. The Wisconsin Supreme Court declined the City's request to review the case. The ordinance was structured with a sunset in February 2009, unless extended by the Common Council. The Common Council did not extend the inclusionary zoning ordinance and therefore it expired and is no longer in effect.
International Examples
Johannesburg, South Africa
On 21 Feb 2019, the City of Johannesburg Council approved its "Inclusionary Housing Incentives, Regulations and Mechanisms 2019".[12] The policy is the first of its kind in South Africa and provides four options for inclusionary housing (including price limited, size limited or negotiated options) where at least 30% of dwelling units in new developments of 20 units or more, must be inclusionary housing.[31]
The trend of going mandatory over voluntary
While inclusionary zoning can be either mandatory or voluntary, some studies have shown that mandatory approaches would be crucial to the success of inclusionary zoning programs in terms of providing a larger number of affordable housing.[32] Below are some examples showing the greater effect of mandatory practice over voluntary practice:[33]
Municipality or County | Under voluntary practice | Under mandatory practice |
---|---|---|
Cambridge, MA | Cannot generate any affordable housing within 10 years | Switching to a mandatory program in 1999, 135 housing units were produced and 58 more were in production as of June 2004. |
Irvine, CA | Confusion and uncertainty were found under a voluntary program that motivated developers to initiate a switch to a mandatory ordinance. | A new mandatory ordinance, enforced in 2003 with uniform expectations and rewards for developers, led to the creation of 3,400 affordable housing units, with 750 more planned in June 2004. |
Orange County, CA | 952 units were built over eleven years (1983–1994). | 6,389 units of affordable housing were built within four years (1979–1983) |
See also
- Visitability - Social Integration Beyond Independent Living
- Affordable housing
- Residential segregation
- Exclusionary zoning
- Office of Fair Housing and Equal Opportunity
- Woodward's building
Notes
- ^ a b c d e Castro, Julián (2013). "Inclusionary Zoning and Mixed-Income Communities". Evidence Matters. Spring 2013 – via Office of Policy Development and Research (PD&R) U.S. Department of Housing and Urban Development.
- ISBN 9780415252256.
- ^ Andres Duany et al, "Suburban Nation: The Rise of Sprawl and the Decline of the American Dream" (2000) North Point Press
- ^ a b c d Powell, Benjamin; Stringham, Edward (2005). "The Economics of Inclusionary Zoning Reclaimed: How Effective are Price Controls?". Florida State University Law Review. 33: 471–499. Retrieved 2023-08-07.
- ^ "Gamaliel" (PDF). Archived from the original (PDF) on 2006-10-04. Retrieved 2006-02-27.
- ^ CAR
- ^ Brown, K. (2001). EXPANDING AFFORDABLE HOUSING THROUGH INCLUSIONARY ZONING: LESSONS FROM THE WASHINGTON METROPOLITAN AREA (1st ed.). The Brookings Institution Center on Urban and Metropolitan Policy.
- ^ Brunick, N., Goldberg, L., & Levine, S. Large Cities and Inclusionary Zoning (1st ed.). Business and Professional People for the Public Interest.
- ^ Calavita, Nico; Mallach, Alan (2010). Inclusionary Housing in International Perspective: Affordable Housing, Social Inclusion, and Land Value Recapture. Lincoln Institute of Land Policy.
- ^ Schwartz, Heather L., Liisa Ecola, Kristin J. Leuschner and Aaron Kofner. Is Inclusionary Zoning Inclusionary? A Guide for Practitioners. Santa Monica, CA: RAND Corporation, 2012. http://www.rand.org/pubs/technical_reports/TR1231.html .
- ^ Perry, A. (2022, May 24). The money pit-falls of Boulder’s permanently affordable housing [Guest opinion]. Daily Camera.
- ^ a b "Inclusionary Housing Incentives, Regulations and Mechanisms". www.joburg.org.za. Retrieved 2019-06-24.
- ^ Powder Days Hansman, Heather. Powder days: Ski bums, ski towns and the future of chasing snow. Harlequin, 2021.
- ^ "Northeast Times". Archived from the original on 2006-08-18. Retrieved 2006-02-27.
- ^ New York Times
- ^ ISBN 9781938166020.
- ^ "HOME BUILDERS ASSOCIATION OF NORTHERN CALIFORNIA v. CITY OF NAPA". landuselaw.wustl.edu. Retrieved 2016-11-14.
- ^ "CA Codes (civ:1954.50-1954.535)". www.leginfo.ca.gov. Archived from the original on 2016-03-04. Retrieved 2016-11-15.
- ^ Palmer/Sixth Street Properties, Lp v. City of Los Angeles, July 22, 2009, retrieved 2016-11-15
- ^ "Initiative and Referendum Qualification Status | California Secretary of State". www.sos.ca.gov. Retrieved 2016-11-15.
- ^ "Final digest-Inclusionary Housing Requirements (Charter Amendment)" (PDF). sfgov.org. City and County of San Francisco, Department of Elections. March 4, 2016. Retrieved 2016-11-14.
- ^ S2CID 154139083– via Springer Science+Business Media Dordrecht.
- ^ S2CID 154913907.
- ^ "North Park" (PDF). Archived from the original (PDF) on 2007-09-26. Retrieved 2006-02-27.
- ^ "BPI Chicago" (PDF). Archived from the original (PDF) on 2006-04-20. Retrieved 2006-02-27.
- Massachusetts Chapter 40B
- ^ See New Jersey Fair Housing Act
- ^ California rural housing
- ^ California rural housing
- ^ Palmer/Sixth Street Properties, LP v. City of Los Angeles, 175 Cal. App. 4th 1396 (2009).
- ^ "Cliffe Dekker Hofmeyr - The City of Johannesburg Inclusionary Housing Policy, 2019". www.cliffedekkerhofmeyr.com. Retrieved 2019-06-24.
- ^ Ziegler, Clark (2002). "Inclusionary Zoning: Lessons Learned in Massachusetts". NHC Affordable Housing Policy Review.
- ^ Brunick, Nicholas et al. Voluntary or Mandatory Inclusionary Housing? Production, Predictability, and Enforcement. 1st ed., Business and Professional People for the Public Interest (BPI), 2004.
References
- Business and Professional People for the Public Interest Issue Brief #4 Inclusionary Housing in Montgomery County, MD,
- Rusk, David; Nine Lessons for Inclusionary Zoning, National Inclusionary Housing Conference
- Waring, Tom; "Section 8 needs a dose of reform, Hoeffel says" Northeast Times, May 15, 2002
- Inclusionary Housing for the City of Chicago: Facts and Myths, North Park University