More Carrot, Less Stick Needed for Affordable Housing

Mixed-income housing - infusing affordable housing with market-rate units - is relying more on incentives and subsidies, than mandates, to stimulate development.

2 minute read

June 21, 2012, 2:00 PM PDT

By Andrew Gorden


Thankfully, dwindling are the days of segregating low-income residents into affordable housing-only enclaves. Today, the need for affordable housing remains, yet an emerging trend is to utilize public incentives to co-mingle income groups in mixed-housing developments.

"The concept is finding favor among for-profit and nonprofit developers alike, particularly in today's tight lending market," states Patricia Kirk of Urban Land Magazine, "because local governments offer a number of incentives, including low-interest financing tools, cash subsidies and grants, free or low-cost land, density bonuses, tax abatement programs, rehabilitation assistance, fast-tracking of plan reviews and permits, and reduced or waived fees." It is these incentives that are driving private developers to include affordable housing in their developments, sometimes mixing affordable units with multi-million dollar ones.

While city planners and some developers state that it's simply "the right thing to do," many cities have been banned from mandating the inclusion of affordable housing into development plans by state statutes. In turn, cities are now looking at the use of incentives to coax developers into voluntarily setting aside up to 20 percent of their units as affordable housing.

For example, "Austin's S.M.A.R.T. (Safe, Mixed-income, Accessible, Reasonably priced, Transit-oriented) Housing Program offers developers a schedule of incentives based on the level of affordable housing provided. The city provides additional density and height variance, or floor/area ratio, to encourage provision of affordable housing and other community benefits, such as parking, open space, and streetscapes." Other cities like Los Angeles, New York and Portland have used similar incentive strategies to construct new transit-oriented developments, senior housing, art colonies and help revitalize economically and environmentally distressed neighborhoods.

Tuesday, June 19, 2012 in Urban Land

View form second story inside Southdale Mall in Edina, Minnesota with escalators and model cars parked on downstairs floor.

The Mall Is Dead — Long Live the Mall

The American shopping mall may be closer to its original vision than ever.

March 21, 2024 - Governing

Houston, Texas skyline.

Report: Las Vegas, Houston Top List of Least Affordable Cities

The report assesses the availability of affordable rental units for low-income households.

March 22, 2024 - Urban Edge

White three-story brick single-room occupancy hotel in downtown Los Angeles, California.

‘Micro-Apartment’ Trend Underscores Housing Crisis

SROs are making a comeback under a new name as the housing supply remains strained and costs soar.

March 22, 2024 - Associated Press via Yahoo News

Red public transit bus in Bangalore, India.

Indian States Give Women Free Bus Passes

The programs are part of an initiative aimed at helping more women join the workforce and improving access to basic needs.

55 minutes ago - Next City

Downtown Minneapolis, Minnesota skylinw with stone arched brige in foreground.

Study: How to Revitalize Downtown Minneapolis

A proposal calls for a reevaluation of the city’s skyways, a focus on street-facing businesses, and an improved public realm.

1 hour ago - Minneapolis Post

Aerial view of Milwaukee, Wisconsin skyline with freeway interchanges in foreground at night.

Milwaukee Residents Challenge Freeway Expansion

Residents are voicing opposition to a planned expansion of Interstate 94, arguing that the project would eliminate the limited green space in the neighborhood.

2 hours ago - Spectrum News 1

News from HUD User

HUD's Office of Policy Development and Research

Call for Speakers

Mpact Transit + Community

New Updates on PD&R Edge

HUD's Office of Policy Development and Research

Urban Design for Planners 1: Software Tools

This six-course series explores essential urban design concepts using open source software and equips planners with the tools they need to participate fully in the urban design process.

Planning for Universal Design

Learn the tools for implementing Universal Design in planning regulations.