One small step for inclusionary zoning

Development

One small step for inclusionary zoning

by David Alpert • May 15, 2009 12:14 pm

After months of inaction and 98 days beyond the Council's final, final, we're really serious this time deadline, the Fenty Administration has published final Inclusionary Zoning regulations in the DC Register. This is a big step toward actually implementing the law the Council first approved in December 2006.

Image by DCMatt.

If the administration follows through, then Inclusionary Zoning will go into effect in DC on August 13th, 2009. New development approved after that date will have to provide some, fairly modest amount of housing to people below the median level of income. There is still one more step, however: today's publication mysteriously omitted the Maximum Rent and Price Schedule, which gives the exact number of dollars in income a household needs to qualify for various categories of affordable housing. The Council's laws, including their most recent reiteration, required Fenty to publish not only the regulations but the schedule as well by February 6th, 2009.

Today's regulations specify that Inclusionary Zoning will not go into effect until 90 days after the publication of the rules (that's 90 days from today), or after the publication of the price schedule, whichever is later. That means that there's still the possibility for even longer delays.

This is an opportunity for the Mayor to correct what the Council Committee of the Whole called an "egregious ... flouting of the law." By August, he could make things right and put this behind him. Or, he could drag it out and keep breaking the law. Right now, it looks like he's serious about getting the job done. We'll be watching.

11 comments

Tags: Adrian Fenty, DC, inclusionary zoning

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Inclusionary zoning in 3... 2... 1... (Aug 14, 2009)
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David Alpert is the Founder and Editor-in-Chief of Greater Greater Washington and Greater Greater Education. He worked as a Product Manager for Google for six years and has lived in the Boston, San Francisco, and New York metro areas in addition to Washington, DC. He loves the area which is, in many ways, greater than those others, and wants to see it become even greater.

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As usual, our elected officials forget simple economics and cave-in to the special interests, this time in the form of rent control.

by MPC on May 15, 2009 1:00 pm • link • report

Finally, we will get to have this widely practiced affordable housing policy in this city. Inclusionary zoning embodies the promise that smart growth means equitable growth and shared prosperity. I want to live a city that has room for everyone. This is a great tool to help make that room.

by CCort on May 15, 2009 5:45 pm • link • report

I bet dollars to pesos that ten years down the road either the 'inclusionary zoning' area will either be back to market prices or a slum. The record of rent control is unequivocally negative.

by MPC on May 15, 2009 6:07 pm • link • report

I have some reservations about these rules as well. I was already a bit alarmed that the policy allowed developers to make an end-run around the height limit, which IMO should have no exceptions made to it. It shouldn't matter whether the exception is proposed for "good" or "bad" reasons.

Also, looking over the regulations, the requirement that the affordable units be 98% percent identical to the market rate units seems to support MPC's point that these apartments could in time simply recover to the market value of the other units -- since they are basically the same.

If the price is the main issue, why not throw out the required sq footages and just require the developer to include X number of units at Y price, and let the developer figure out the floorplans? That may mean a 2 bedroom unit with only 600 sq feet, or a 300 sq. ft. studio with no full kitchen. Still a lot bigger than Tokyo. But at least the price will bear some resemblance to the unit -- and will provide a truly built-in protection against escalating prices.

by CG on May 15, 2009 8:33 pm • link • report

CG, You've hit on some of the many problems that occur when we try to micromanage how we get to a result. I've asked the market price question before and been told that the folks who buy at special prices will be forced to sell at similar special prices for a good number of years ... to like situated "below median folks". It sounds good on the surface, but if you sit back and think about it you have to wonder how that'll work. I mean, when one of these people needs to sell, will their market be limited to a list of people that some bureaucrat has approved? And these people who bought at a special price will have absolutely no incentive to improve the place ... since they can't sell it for more than what they paid for it (plus whatever 'inflation'/'market' escalation factor some other bureaucrat has decided.) It doesn't sound like that good of a deal for the folks buying ... they don't really get to be real homeowners. Not that they can't do other things with the money they'll be saving. Every time I look at my neigbhor behind me who paid 1/10 for her home what I paid for mine (through the District's current 'affordable housing' program) I can't help but think that I'd like to be driving a $100K+ car too. But I can't ... I have a mortgage to pay. And my property taxes aren't pegged artifically low like hers are. I don't blame her. She's making do with what is offered her. But I do blame people who push through these micromanaged 'do good' ideas thinking they're doing good.

by Lance on May 15, 2009 9:48 pm • link • report

Okay Lance, so now you'll agree to delete all the micromanagement from the zoning ordinance. Rules about how many unrelated people can live in one house. Rules about parking. Rules about numbers of rooms. Rules about setbacks. Etc. etc.

by tt on May 15, 2009 9:52 pm • link • report

tt, I said "micromanage how we get to a result". (i.e., how we get to a desired goal.) The rules about parking, number of rooms, setbacks, etc. are all rules having to do with how we as citizens interact with each other. They are about setting limits between one person's rights and another person's rights so that neither person tramples the other's right. They have nothing, zilch, to do with mircromanaging a shared desired communal goal ... such as creating more affordable housing.

I guess another way to look at it is that there's absolutely no "management" in what you call the "micromanagement for the zoning ordinance". Managing involves a lot more than setting setting and enforcing rules.

by Lance on May 15, 2009 10:05 pm • link • report

tt -- it's certainly true that zoning codes try to regulate many details, and my post was partly trying to get at how these existing regulations may inadvertently contribute to the lack of affordable housing. Setting minimum sq footages for apartments might play some role here, do you agree?

It seems to me that the rationale for inclusionary zoning has nothing to do with the old "safe and sanitary" justification for public housing -- that's available elsewhere at low cost -- but simply with providing A place, any place, downtown for someone of modest means. It's the location that's the important factor. The apartment doesn't need to be a luxury suite.

Below a certain size it's true that an apartment wouldn't really be "habitable," yet I don't think DC has tested a market solution to this. What would be the cost of a 2 br, 1 ba, 550 sq ft. place with economy fixtures? That's still two 10X10 bedrooms, full bath and living room/kitchen. Perhaps developers would construct such apartments if permitted (and if parking requirements were not so high, so that a developer is punished for making a large number of small units vs. a small number of luxury units)?

by CG on May 15, 2009 10:53 pm • link • report

Inclusionary Zoning
Pro‘s and Con‘s

Pro‘s

A. Inclusionary zoning enables local governments to use their zoning powers to foster the development of affordable housing by requiring developers to build affordable housing in exchange for incentivesthat, in effect, reduce the developer‘s project costs, i.e., reduced or deferred developer fees, density bonuses, land purchase assistance, bond financing, reduced traffic/parking provisions, etc. B. Affordable units in mixed income housingdevelopments are physically indistinguishable from market rate housing, thus avoiding the stigma often attached to affordable housing.

C. Many existing subsidized housing programs have the effect of concentrating affordable housing in acertain areas of a community. Inclusionary zoning fosters mixed socieo-economic neighborhoods by integrating low/moderate income housing throughout the community.
D. Integrating moderate and lower income households into new residential developments gives all members of society access to better schools, better commercial centers, good parks, and a higher quality of life often found in and around newer neighborhoods.
E. Mandating the provision of affordable housing, giveslocal governments another tool to meet the housing needs of specific income levels--i.e, very low income, low income, etc.
F. Resale controls, which often accompany inclusionary housing ordinances, ensure long-term affordability of units.
G. Furthermore, in-lieu fees and equity recaptures provide local governments with the revenue to purchase or build more affordable units or finance renter assistance programs.
Con‘s

A. It is unfair to place the burden of providing affordable housing solely on developers. The lack of affordable housing is a societal problem, and as such, all of society should share the responsibility of addressing it.

B. Inclusionary zoning does not address the factors that contribute to the high cost of market rate housing, i.e., high land costs, lack of available sites, developer fees and exactions, cumbersome permitting process, etc. Moreover, inclusionary zoning only adds costs to the development of market rate housing.C. Inclusionary zoning places financial hardships on developers. Ultimately, they will no longer be able to provide housing in the community because the costs are too high, or they will pass the costs on to market rate buyers, thus making it more expensive for them to buy a home.D. Resale price controls eliminate homeowners‘ ability to realize a reasonable profit on the resale of their home and therefore takes away the incentive for themto maintain their home. This makes it difficult to resell inclusionary units, which lessens their availability to the housing market.

E. The cost of implementing an inclusionary zoning ordinance for a local government entity is significantly high. Most local governments cannot afford the amount of staff resources and experience required to implement and administer an effective program.F. Ultimately, the best way for a local government to provide affordable easier for its constituents, at all income levels, is to make it eaiser for developers to develop such housing. Incentives such as reduced land costs and land restrictions, increased availability of housing sites, and reduced fees make the development process less costly and time consuming.G. The practice of in-lieu fees is a tax on homeowners and renters.H. Many jurisdiction collect in-lieu fees, but do not leverage the revenues to build more affordable housing. Instead, in some cases, the money is not spent to produce new affordable housing.

www.car.org/governmentalaffairs/policybriefings/inclusionary/izprosncons

by Lance on May 16, 2009 8:44 am • link • report

I would like to see more rent-to-own provisions that would make it possible for truly low income families to attain home ownership. It is very difficult for most low-income families to come up with the down payments even when prices are affordable--particularly in markets like today's where lenders are reluctant to lend to all but the perfect prospective candidate.

by kreeggo on May 16, 2009 2:33 pm • link • report

I would like to see more rent-to-own provisions that would make it possible for truly low income families to attain home ownership.

They had these things called subprime mortgages. They didn't work out so well, according to what I've heard.

by MPC on May 16, 2009 11:38 pm • link • report