Building in Affordability

A range of existing policy tools can help preserve and expand affordable housing near planned transit stations -- but to have the most effect, they need to be put in place up front.

Earlier this year, a speaker at the National Inclusionary Housing Conference noted that the performance of a housing policy or program can no longer be measured simply by the number of homes created or preserved. These days, the measure of a successful housing program must also account for effective multitasking, strategically leveraging every dollar and opportunity to simultaneously achieve multiple goals.

This has special relevance in communities planning to develop or expand light rail and other public transit systems. While working families often have the most to gain from access to low-cost transportation alternatives, experience has shown that land costs near planned stations often escalate rapidly in anticipation of new transit investments, and failure to act early and build in affordability at the outset can make it extremely difficult and costly to preserve and expand housing affordable to working families and others along transit corridors. A similar dynamic may apply to the areas around existing transit stations — and to village and town centers — that are the focus of reinvestment and redevelopment.

Fortunately, several policies that have long been part of the traditional affordable housing toolbox can also be employed to ensure that affordability is “built in” to development within walking distance of new transit stations, as well as to other areas experiencing reinvestment and redevelopment. With careful planning, these tools can be incorporated into the framework for new development, ensuring that individuals and families at all income levels can benefit from improved access to transit and the other amenities that are offered in these emerging communities of opportunity.

Inclusionary Housing

Inclusionary housing policies and ordinances require or provide incentives to encourage developers of market-rate homes to set aside a share of newly-built or substantially rehabilitated units for low- and moderate-income households. Inclusionary housing is an especially useful tool for promoting affordability around new or redeveloping transit hubs, which typically require compact development to achieve ridership goals. In exchange for including affordable units, developers commonly receive a density bonus that entitles them to build more units than would ordinarily be allowed on the site.

The board of supervisors in Fairfax County, Virginia, recently amended the county’s land use plan and zoning ordinance to prepare for a transit line extension that will bring four new rail stations to suburban Tysons Corner. The board’s updates for the newly-designated “Planned Tysons Corner Urban District” call for concentrating higher-density development within one half-mile of planned transit stations and setting aside 20 percent of new residential units for housing affordable to families with incomes between 50 and 120 percent of the area median income, up from the 12 percent required countywide. Linkage fees, assessed on a per square foot basis, will also be levied on most new non-residential development to ensure that the housing demand generated through economic development can be met.

Some practitioners recommend adopting a citywide or regional inclusionary housing policy, rather than limiting affordability requirements to neighborhoods adjacent to transit stations, to avoid creating disincentives for developing near transit. On the other hand, where the market demand for housing near transit is very strong or when the density bonuses or other offsets provided to property owners in exchange for the inclusionary requirements are so strong that there is little likelihood of discouraging investment near transit, a more targeted approach like that taken in Tysons Corner may be workable. A more targeted approach may also be easier to achieve politically.

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