Posts about Inclusionary Zoning

The Maryland county served as the setting for a recent study by Heather Schwartz, of the Rand Corporation, and based on Heather's findings, it may be a model for other areas in search of a new and effective strategy for raising educational standards.

In her study, Heather sought to uncover the impact of economically integrative housing on academic success among elementary-aged students. In short, she was able to track the progress of a cohort of highly disadvantaged elementary students whose families, previously tenants of traditional public housing, had been randomly assigned to low-poverty areas affiliated with low-poverty elementary schools.

Over a period of five to seven years, she was able to track significant improvements in math and reading scores among the transplanted population. Furthermore, not only did the students placed in low-poverty schools outperform their moderate-poverty peer group, but they had also played catch-up to their peers. By the end of elementary school, the resettled population had narrowed the achievement gap with their non-poor peers by one-half for math and one-third for reading.

While it may come as no surprise that placing kids into more stable environments and sending them to wealthier schools has an effect on their academic performance, the rate and consistency of academic improvement among kids in the study is nothing short of impressive.

Given the success and simplicity of the approach, it is astounding how uncommon it is for US cities or counties to implement such a strategy.

I had a chance to sit down with Heather following her presentation, and one of the first things that I asked her was, "Why Montgomery County?"

As it turns out, the DC suburb is currently the single largest community to feature a policy of inclusionary zoning, without which Heather's study could not have been possible.

Inclusionary zoning amounts to a set of laws that require developers to set aside housing for lower income families. In Montgomery's case, the Moderately Priced Dwelling Unit (MPDU) program means that approximately 15% of homes built are to be sold or rented at below-market value. More often than not, the right of first refusal to purchase the home falls to the Housing Authority. Nestled within otherwise affluent communities, these dwellings provide stable, high-quality housing and unrestricted access to community resources for families that would otherwise find themselves in poor public housing developments.

Although, as Heather pointed out, inclusionary zoning has been around since the early 1970's and many studies have indicated the model is highly successful, relatively few communities have embraced it in the same way as Montgomery County.

While there are likely many reasons that this is the case, one concern that may arise is whether integrating schools to include variable poverty levels may actually decrease the performance of students hailing from low-poverty homes. Heather's finding's indicate that no such trend exists, and that the effects of mixing up an elementary school population through inclusionary zoning yields only positive effects for the economically disadvantaged students.

Of course, inclusionary zoning policies are not limited to Montgomery County. Heather is following up on her original research with a new study that will examine 11 cities and over 15,000 addresses.

For the time being, effective and enforced inclusionary zoning is predominantly a highly local movement that lacks widespread popularity. With research initiatives like Heather's and forums like the "How Housing Matters" conference, coupled with growing, bipartisan alarm regarding the state of education and child welfare in the US, perhaps we'll see more interest and more implementation of inclusionary zoning in the future.

The center of Langley Park is at New Hampshire Avenue and University Boulevard. It straddles the border between Montgomery and Prince George's Counties, and is known for being a very diverse, but lower-income community.

The planners, one of whom is an asset manager at a Bethesda-based nonprofit housing developer, explained that the need for public housing assistance arises from the fact that so many workers aren't paid enough to be able to afford market-rate housing. This is especially severe in high-cost areas like metropolitan Washington.

An often-overlooked remedy to the underlying problem is to increase the minimum wage across the board so that working people can live off of their income without needing other assistance. But this has not been the chosen approach, for the most part, in the United States.

A historical perspective

The first federal housing programs grew out of the Great Depression and the need to house the thousands that the economic crash left on the street. In later years, these programs focused on replacing "slums"—many of which were thriving, though poor, neighborhoods.

The resulting development often took the form of high-density apartment buildings in non-urban configurations. Construction of much of the Southwest Waterfront neighborhood is the result of this urban renewal planning.

Public housing was not intended to house families indefinitely, but rather to support them to get back on their feet. The programs that eventually came to be overseen by the U.S. Department of Housing and Urban Development (HUD) were intended not only to house people, but to sustain the economy by encouraging bank lending and to support the housing industry.

In the 1970s, HUD moved from being a financier for the development of traditional public housing projects to using Section 8 of the Housing and Community Development Act of 1974 to create an alternative approach. This new approach took the form of vouchers for private housing.

Policy tools

Section 8 payments are made to landlords on behalf of individuals in need of housing who meet legal residency and income requirements. They may only act as a subsidy to keep prices or rents low, or they may cover most or all of the cost of rent or a mortgage. Generally, income tests mean that households must make no more than a certain percentage of the average median income for their metropolitan area.

Disappointingly, the process for qualifying for a Section 8 voucher has become long and tedious. Over 20,000 District residents currently sit on the waiting list, representing a casework backup of two years or more.

Only 7,000 people nationwide receive vouchers each year. As this 12-minute documentary from the Maine Affordable Housing Coalition illustrates, wait-listed people without stable homes face much greater challenges finding work, healthcare, childcare and other necessities, while many who have gotten vouchers have become productive members of their communities.

Governments also offer tax credits to nonprofit developers of affordable housing. This amounts to a dollar-for-dollar reduction in the developer's tax bill, up to an annual limit of 90% of development costs for ten years.

Nonprofits—which don't pay corporate income taxes anyway—sell these credits to banks, which then give 70 cents for each dollar of tax credit the bank can apply to its own tax bill back to the nonprofit. This helps banks comply with the Community Reinvestment Act of 1977.

More recently, state and local governments (with some HUD assistance) have worked to include minimum affordable housing set-asides in new mixed developments. Hope VI, established in the early 1990s, aimed to replace the most derelict traditional public housing with mixed-use communities. But of the nearly 70,000 public housing residents displaced under Hope VI, only 24% were able to return into the units that replaced their original homes.

Another tool local governments use is inclusionary zoning (IZ): a zoning requirement that a certain percentage of units in developments of certain sizes must be reserved for those of lesser means. In Montgomery County, this means Moderately Priced Dwelling Units (MPDUs). Montgomery had one of the country's first inclusionary zoning ordinances. It was adopted in 1974.

Developers are generally offered enhanced incentives in exchange for their acceptance of IZ. Montgomery County has set a standard for IZ policies [PDF page 19]. A new Montgomery County policy mandates that greater percentages of units within one of the county's nine Metro Station Policy Areas be made affordable than in other parts of the county.

The District enacted an inclusionary zoning policy about two years ago. Unfortunately, however, Prince George's County lacks many of the policy tools that could help the residents of Langley Park stay put.

The heart of Langley Park. Photo by thisisbossi on Flickr.

The sustained level of citizen involvement in the effort to preserve Langley Park's cultural identity while supporting transit improvement and smarter development is encouraging. It should serve as a model for other cases where low-income communities can be disadvantaged by the types of changes that will inevitably increase in our region.

If you support the Fair Purple Line Campaign's goals and want to see it succeed, please learn more about the Campaign.

David Bowers is a minister, and his oration shows it. Standing before the audience, Bowers told stories: of an African American couple in their 70's that moved to the District five decades ago, when they were redlined out of certain neighborhoods; of growing up all too aware of the 8th & H gang; of his coworker, a 25-year-old Georgetown graduate who lives with friends and volunteers at her church. He punctuated the end of each anecdote with, "And that's DC!"

The point? As Bowers says, "DC is a diverse city that has changed over time and will continue to change." That change includes housing. "People have been priced out of neighborhoods, not by some nefarious plan, but by the market... It's not going to be static."

Bowers also serves as the vice president and impact market leader for Enterprise Community Partners, Inc., which through its Continuum of Housing Campaign, works to promote a diverse mix of housing that can accommodate low- and moderate-income earners.

During his presentation, he asserted three key points critical to that end: acknowledging that all people have inherent worth and deserve dignity and respect; all people have the need for safe, decent affordable housing; and that all housing is affordable, but the question is, "for whom?"

Tregoning's presentation, in contrast to Bowers', was filled with data points on the District's demographics. Since 1960, the District lost 200,000 people, with some neighborhoods in the city's core losing up to 50 percent of their population. Within the past decade, however, DC has been regaining population. The release of 2010 Census data later this month is expected to show the population again surpassing the 600,000 mark.

"I like to think of Washington as the city of the future," Tregoning said. With our smaller household sizes and concentrations of both recent college graduates and retirees, "we already have the demographics of the United States in 2050," she said. "Part of the challenge is to right-size our housing stock so we can have the type of housing that matches the needs of our residents." For example, Tregoning pointed out, the multi-unit building she inhabits in Columbia Heights used to be a single-family home.

Photo by smartergrowthdc on Flickr.

What does transportation have to do with affordable housing? First, the cost of parking is usually bundled with new housing, even if homeowners or tenants don't have cars. In DC, only 65 percent of households own a car, and in neighborhoods like Columbia Heights that plummets to only 20 percent. Developers often overestimate how much parking is actually needed, and in other cases parking minimums require developers to spend lots of money to build parking spaces. Structured parking, for example, costs between $35,000 and $50,000 per space. That's a high cost to include in the price of housing.

Second, reducing transportation expenses to households makes living in our region more affordable for everyone's bottom line. Washington-area households in neighborhoods well-served by transit spend an average of $9,000 per year on transportation, while the regional average is closer to $19,000. In some car-dependent areas of our region, households spend up to $25,000 per year on transportation.

Don't believe it? Ask AAA, which estimates the annual cost of car ownership at over $9,500. It's easy to see that car-free and car-lite households save money on transportation, and households in denser areas like the District have access to more transportation options.

Because housing and other land-use issues are inescapably linked to transportation, these related costs should be factored together when considering affordability. Especially in DC, where the median income is lower than the region at large, increased transportation costs have a dramatic impact.

Already, 90,000 households in the city pay more than a third of income to housing, while 47,000 households spend more than 50 percent of income on housing. Ensuring low transportation costs is especially important for these families.

Tregoning said that the city's transportation efforts—such as more transit options and better places to walk and bike—aim to reduce household expenses. 40 percent of all DC auto trips are 3 miles or less. "Those trips can be converted to walking, biking, or transit trips," Tregoning said. "I don't expect anyone to make an extraordinary effort" to bike, walk or use transit, she said. It's up to the city to ensure that "for many trips, it should make more sense and be easier" to use modes that save residents money.

Both speakers mentioned inclusionary zoning (IZ) as the primary tool that could be used to keep housing in the District affordable and diverse. The city's IZ policy was enacted in 2006, when data demonstrated that, as Tregoning said, "we were either re-segregating the city or reinforcing the segregation" through development patterns. Currently, all new construction of 10 or more units must set aside 8-12% of those units as affordable housing.

In the future, and when the economy rebounds, Tregoning suggested that as many as, if not more than, 170 units per year would be set aside for households earning between $32,000 and $80,000. And, per the Anacostia Waterfront Initiative's mandate, new construction in some East of the River communities must comprise of at least 30% affordable units.

Though inclusionary zoning has its detractors, it's not just a hot topic for the Office of Planning. Mayor-Elect Vince Gray has repeatedly referenced IZ as a way to mitigate potentially skyrocketing housing costs. IZ is here to stay for the foreseeable future. If wielded effectively, it should keep the District more affordable than it would be otherwise.

Beyond the statistics and the programs, the most important takeaway from the forum was Bowers' call for engagement. "Get informed and get involved," he told the audience. "These conversations about the urban hipster vs. the long-time resident, black vs. white, black vs. Latino—that divides." The city's chances of overcoming these challenges, he said, hinges on involvement from a cross-section of its population.

Bowers encouraged forum attendees to substantively engage in places where not everyone looks or talks like them. He counseled the audience never to be apologetic in the face of hostility as they attempt to bridge the city. As complex as housing policy can be, it begins with simple discussions. "Start talking with people," Bowers preached, "instead of about people."

IZ requires new housing developments to set aside a small portion of units at more affordable rates. In exchange, the developer gets to build additional units than the zoning would otherwise allow. The widespread affordable housing policy became DC law in 2006, but implementation was delayed until last summer, well after the housing market crashed. Thus, we must wait for a new housing development pipeline to start producing again.

In the case of for-sale units, IZ offers opportunities for lower income families to build wealth while realizing the other important benefits of homeownership. DC's IZ program uses the change in the HUD Area Median Income (AMI) to calculate a maximum resale price an owner may receive for his or her unit. It uses the annual rate of change over the previous ten years to smooth out fluctuations in the AMI. For example, an IZ owner who bought her unit in 2006 for $200,000 and sold it in 2008 could potentially sell it for approximately $211,800 (plus any capital improvements made). This equals an appreciation of almost 3% per year. Over the same period, an owner of a market-rate home would have had to deal with the 11-percent decrease in the area median home values. Programs like DC's IZ can help families who buy at affordable, below-market prices weather downturns in the market better than those owning market-rate homes. IZ homeowners may even have the opportunity to sell for a gain when the market is flat or down.

IZ helps low- and moderate-income residents keep living in emerging neighborhoods, even as land prices rise. This inclusive policy is a direct way to ensure that lower income residents share in the positive effects of the District's revitalization. It also helps reduce commuting costs and times for workers who serve vital roles in DC's communities.

Manna suggests lifting all resale price restrictions from an IZ unit after 5 years. Montgomery County abandoned this policy years ago after losing most of its affordable IZ units when these short-term affordability restrictions expired.

Learning from Montgomery and other jurisdictions around the country, the DC IZ law is designed to build a permanent stock of affordable housing for future generations of buyers and renters. Still, it also allows homeowners wealth-building opportunities and protects them on the downside in declining housing markets.

Manna cites problems with mixed income developments that predate IZ. Many of these problems stem from the way the programs were administered. Now that the IZ program will create many similar units across the city, the DC Department of Housing and Community Development is creating a more effective stewardship framework to address many of the shortcomings of these earlier ad hoc efforts.

DC IZ's approach to long-term affordability is based on successful, time-tested efforts across the country. Hundreds of local governments are using such tools to balance affordability with asset-building opportunities for lower income families. Since low- and moderate-income DC residents and workers still face formidable barriers to affordable homeownership despite the downturn in the housing market, we need all the tools we can muster to provide more housing choices in transit-accessible and amenity-rich neighborhoods.

Cheryl Cort is Policy Director for the Coalition for Smarter Growth and spokesperson for the D.C. Campaign for Mandatory Inclusionary Zoning.

Under the New Communities Initiative—established at the end of Anthony Williams' administration—Barry Farm (Ward 8), Lincoln Heights/Richardson Dwellings (Ward 7), Northwest One (Ward 6) and Park Morton (Ward 1) are to "transform [from] highly concentrated low-income neighborhoods into healthy mixed-income neighborhoods." Perhaps the most important component of this initiative is the guiding principle of "build first" which "calls for new housing on publicly-controlled lands to be built prior to the demolition of existing distressed housing to minimize displacement."

When asked how best to retain current residents while improving housing, education, and economic opportunities, Gray pointed immediately to New Communities. While not a new initiative, it is one we seem to have lost track of as the economic boom turned into a bust. The reality is that while most of us are facing challenges in the current climate, many residents in our city who were struggling at the peak are in further distress now.

Gray, at least on the campaign trail, is able to recognize this gulf that continues to divide DC, and he seems to be genuinely interested to continue to push for solutions that have been staring us in the face for years now. Issues like inclusionary zoning, rent control, and New Communities are all ways the city can help bridge that gulf—they just need to truly be championed in order to work. It will take serious sustained effort from all the city's leadership to accomplish these goals.

Cross-posted at The District Curmudgeon.

In addition to apartments, the ground floor will house a community room for residents. That floor will occupy the entire lot, while upper floors will form a U shape around a central courtyard.

This property is zoned R-5-B, but that zoning doesn't allow the scale of the project as proposed. That's too bad, because the project is similar in size to most other buildings on the block. The two apartment buildings across Chapin Street are also five stories, and buildings to the west range from 4-6. Most of the properties take up the vast majority of their lots as well.

According to the OP report, a six-story apartment building, "The Berkshire," occupied this property until destroyed by fire in 1996. Across the alley to the south was a four-story building, once the Van Cortlandt Apartments and then the Community of Hope homeless shelter before sitting vacant for some time; the remaining facade was sadly demolished this summer.

Aerial view of the area, facing west. Image from Bing Maps.
Chapin Street is on the right, Belmont on the left, 14th below. The property in question is the grass-covered lot just above the block-long dirt lot (Nehemiah Shopping Center).

However, R-5-B zoning only permits an FAR of 2.16 with inclusionary zoning, a height of 50 feet, and 60% lot occupancy. The remaining buildings in the area surely exceed many of these parameters, and the Berkshire, which OP says had 90% lot occupancy, likely exceeded all three.

In order to get this project built, the applicant is requesting a rezoning to C-2-B, the same zoning as the property facing 14th Street to the east. That property used to be the Nehemiah Shopping Center, and received zoning approval in 2006 for a 90', 225-apartment building with ground floor retail, but that project has not yet started construction and recently received a two-year extension.

The C-2-B zoning will give added height and lot occupancy flexibility for this project. However, it won't actually contain any commercial uses. This lot is also smaller than the normal minimum for a PUD, but the Zoning Commission can relax the minimum if it finds the project to be "of exceptional merit and in the best interest of the city or country." Creating affordable housing is indeed very meritorious, though perhaps the standard need not be so high. Making the housing stay affordable in perpetuity instead of just for 30 years would also make it even more meritorious.

The zoning in an area should not make most of the existing buildings nonconforming, or, as in this case, prohibit replacing buildings destroyed by fire or neglect with similar ones. Projects shouldn't have to constitute "exceptional merit" and undertake a lengthy PUD process just to build something shorter than what was there before. And it shouldn't require rezoning a residential property to a commercial classification to construct an all-residential building. This building type isn't necessarily appropriate in every R-5-B district, which includes many 3-4 story row house areas, but it certainly is here, and our zoning code should reflect that. With the upcoming zoning rewrite, hopefully it will.