Study Identifies Inclusionary Zoning's Fatal Flaw

Emily Hamilton, a researcher at the Mercatus Center at George Mason University, shares a newly published working paper online that digs into the market outcomes of inclusionary zoning. The findings are not positive.

"Policymakers should not pursue inclusionary zoning as an affordability strategy," concludes Hamilton in a post to introduce and promote the research. "Rather, policymakers who want to create an environment of housing stability for households of all incomes should pursue land use liberalization (allowing for more abundant housing supply) along with subsidies targeted to those households that need them to afford market-rate housing."

Hamilton's explanation of the findings of the new paper distinguishes between the wide varieties of inclusionary zoning programs that have been implemented in 886 jurisdictions around the United States. Mandatory inclusionary zoning, optional inclusionary zoning, inclusionary zoning incentivized by density bonuses—the value of any program varies from neighborhood to neighborhood and relies very much on the rely on the underlying exclusionary zoning that prevents developers from building.

Hamilton studied the Baltimore-Washington region, where 15 jurisdictions have mandatory inclusionary zoning policies, and eight have optional programs. "Among those with optional programs, only Alexandria, VA, and Falls Church, VA, have produced any units," according to Hamilton. "Relative to other jurisdictions with optional inclusionary zoning programs, these jurisdictions have high house prices, owing in large part to their otherwise exclusionary zoning and high demand for housing."