Affordable housing mandates - "inclusionary zoning" - have been a popular way for cities to deal with high housing costs. But Stephen Smith says there are real market costs, and while the empirical work is in its infancy, it doesn't look promising.
Smith writes:
"Proponents claim that inclusionary zoning an effective way to create affordable housing and income/racial diversity in otherwise segregated neighborhoods, but I see many negative unintended consequences. The fundamental problem that I see is that while it definitely benefits those who are lucky enough to get affordable units (i.e., those with the most experience with the welfare state, who know how to work the system), it has negative net consequences for every single other person in the housing market.
The negative effects on fellow building dwellers are obvious: they will have to be charged higher rents in order to compensate for the loss that developers will almost surely be taking a loss on the affordable units."
Thanks to Stephen Smith
FULL STORY: The case against inclusionary zoning=
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