The Pros and Cons of Inclusionary Zoning

A growing number communities have adopted inclusionary zoning polices as the price of housing has risen dramatically over the past several years. The question remains: does it work?

This article from the Winter 2007 edition of On Common Ground magazine published by the National Association of Realtors(r), discusses the experience of several communities that have tried to address the shortage of affordable housing by implementing inclusionary zoning programs.

"To some, inclusionary zoning is the means to preserving a healthy mix of diverse incomes, ethnicities and workforces in increasingly pricey municipalities...To others, inclusionary zoning is an impediment to growth, an interference with the free market and an exceedingly expensive cost-per-unit way of integrating lower incomes into high land-value areas."

"John McIlwain, a senior fellow at the Urban Land Institute, believes inclusionary zoning is a piece of the puzzle, but not the complete solution. He agrees with homebuilders that more affordable housing is created through density bonuses than strict inclusionary requirements alone."

""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," he said of inclusionary zoning."

Thanks to Hugh Morris

Full Story: Pros vs. Cons: smart growth experts debate inclusionary zoning strategies in an effort to win diverse affordable neighborhoods

Comments

Comments

Inclusionary Zoning

I gotta love this quote:

“Inclusionary housing is an extraordinarily effective and efficient way for cities to create affordable housing,”...

Of course it's effective and efficient for cities, the entire cost of the ordinance is passed onto new homeowners!

If "affordable housing" is really a socially desireable good, then shouldn't all of society pay for it? That way we could at least debate the efficiency of certain methods because everyone would share in the burden. Inclusionary zoning simply passes the buck to the next generation (i.e. new homeowners)...an unfortunately familiar theme in American politics these days.

Exclusionary pricing.

I don't understand this argumentation. This argumentation asserts unaffordable housing is a socially desirable good.

And there is no reason why the affordable housing debate is stifled if society doesn't pay for the good.

Nonetheless, inclusionary zoning is a reaction to the externality. The folks who want to debate methods to reverse the trend of unaffordable housing can debate tax incentives and how that spreads the burden to the rest of society too. Somebody has to pay.

Or we can debate how the rest of society is already burdened by exclusionary zoning - by having the excluded drive all over the place to get to their place of employment.

Best,

D

Re:

No, not really Dano, that's your assertation. The trend towards unaffordable housing is an almost entirely man-made artifice, brought about by overly restrictive zoning regulations and a permitting/entitlement process that is unpredictable and lengthly. Ordinances like inclusionary zoning simply pass on ever more costs to the next generation of homeowners (and therefore subsidize existing homeowners).

Cities, naturally, love ordinances like these because politicians can show they are "doing something" to help with housing prices, when all they really doing is passing the hat. That's why nearly everyone in support of inclusionary zoning in the article was affiliated with muncipal government in some form or another...and why budding politicians everywhere are jumping on the bandwagon as they too can't wait to add another line to resume for higher office.

So yeah, somebody does have to pay...at this point though most of the costs are being passed on to folks below 30, which, as anyone can see, is clearly not sustainable.

Zoning experiments.

The trend towards unaffordable housing is an almost entirely man-made artifice, brought about by overly restrictive zoning regulations and a permitting/entitlement process that is unpredictable and lengthly. Ordinances like inclusionary zoning simply pass on ever more costs to the next generation of homeowners (and therefore subsidize existing homeowners).

Yes. Affordable housing, as you argue, is an entirely man-made artifice as well. The current situation is indeed brought on by regulation, many of it in reaction to (as Glaeser asserts) people zoning out undesirables. Also, creating regulation for desired open space - quality of life, see. And regulation arising from whatever other impulse.

But, as we see in Oregon, folks don't like the lack of regulation either, as regulation protects their property values. Seems like we really are just learning as we go along and sometimes we get it right.

Best,

D

"Seems like we really are

"Seems like we really are just learning as we go along and sometimes we get it right."

True of almost everything in life...well put.

Two Types of Inclusionary Zoning

Let me suggest that, if the inclusionary zoning gives the developer a density bonus for providing affordable housing, it could provide affordable housing, increase revenue enough that there is no extra cost for the developer and home buyers, and benefit the environment (assuming that the higher density is in the right location).

If inclusionary zoning does not give a density bonus, then my unorthodox opinion is that it is just a game of musical chairs that does not provide a net increase in affordable housing. What happens to the affluent people who would have bought these new inclusionary units if they hadn't been reserved for moderate income? They buy housing somewhere else and drive up prices, leading to gentrification of existing affordable housing.

Charles Siegel

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