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Inclusionary Zoning: Using the Market to Create Affordable Housing

Inclusionary Zoning: Using the Market to Create Affordable Housing. Alan Mallach, Senior Fellow National Housing Institute. inclusionary zoning. A Brief Definition

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Inclusionary Zoning: Using the Market to Create Affordable Housing

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  1. Inclusionary Zoning: Using the Market to Create Affordable Housing Alan Mallach, Senior Fellow National Housing Institute

  2. inclusionary zoning • A Brief Definition An ordinance or program that requires or provides incentives for developers to provide affordable housing as a part of their market-rate developments, either by including the affordable housing in the development, building it off-site, or contributing land or money to a housing trust fund in lieu of construction.

  3. Inclusionary zoning • What can inclusionary zoning achieve? • Create a pool of permanently affordable housing • Generate resources for an affordable housing trust fund • Foster mixed-income housing and greater economic integration

  4. inclusionary zoning • Historical background • IH began in 1970’s as strategy for suburban integration • Pioneering states were CA, MA and NJ • In 1990’s IH began to move into urban areas • In past decade IH has become a nationwide strategy

  5. inclusionary zoning • Critical elements in inclusionary zoning • Legal authority • Economic feasibility/market demand • Clearly defined rules • Political will

  6. inclusionary zoning • Legal authority • Land use or exaction? • Statutory authority • Court decisions • Police power

  7. inclusionary zoning • Economic feasibility • Strong housing demand • Market prices make development profitable • Development ground rules permit reasonably efficient development • Availability of cost offsets (density bonuses, fee waivers, tax abatements, etc.) where needed.

  8. inclusionary zoning • Clearly defined rules and standards • Number (or %) and affordability level of affordable housing • What alternatives are available under what conditions • Controls to ensure long-term affordability • Effective enforcement of rules

  9. Inclusionary zoning

  10. inclusionary zoning • Key elements in managing inclusionary zoning • Set ground rules with developers up front • Recruit and qualifying buyers and tenants • Ensure long-term affordability • Manage the trust fund (if buyout funds are collected)

  11. inclusionary zoning • Political will • Commitment to creating affordable housing • Willingness to confront development industry • Support from housing advocacy community • Readiness to commit energy and resources to making it work

  12. inclusionary zoning • What can inclusionary zoning accomplish? • Create affordable housing in strong market environments • Harness private sector energy to create affordable housing • Leverage public resources • Foster mixed-income, economically integrated communities

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