Housing

NYC Proposes Mandatory Inclusionary Housing, The “Times” Doesn’t Get It

Earlier this month, New York City Mayor Bill de Blasio released Housing New York, a ten-year plan to create or preserve 200,000 affordable housing units in the city. While New […]

Earlier this month, New York City Mayor Bill de Blasio released Housing New York, a ten-year plan to create or preserve 200,000 affordable housing units in the city. While New York City has a long tradition of city-led efforts to create and preserve affordable housing, de Blasio’s plan has a number of new features, but one stands out in particular—the city’s long-awaited embrace of mandatory inclusionary zoning. This makes for an interesting story—as does the New York Times’ reaction to the mayor’s announcement.

Mandatory inclusionary housing programs—or zoning programs—as most Rooflines readers probably know, are programs which require developers of market-rate housing to set aside a percentage of their houses or apartments as affordable housing. Programs vary widely; some programs are citywide, some are triggered by zoning changes, and some apply to certain zoning districts in a town or city. Pioneered in a handful of communities in California, Maryland, and Virginia in the early 1970s, inclusionary housing programs have spread to hundreds of towns and cities across the United States, along with hundreds in the UK, Ireland, France, Spain, Australia and elsewhere. The number of affordable housing units that have been created as a result certainly can be counted in the hundreds of thousands, if not perhaps millions. 

In the course of that experience, predictably enough, people have long since learned that mandatory is better than voluntary. Given a voluntary program, a lot of developers will duck the option, or choose to forego the incentives that come with the affordable housing strings attached. In a mandatory program, they figure out how to make it work. And after a while, as has been seen just about everywhere it’s been tried, it becomes normal, part of doing business.

New York City’s leaders have determinedly resisted mandatory inclusionary zoning, a tribute to the notorious power of the city’s real estate industry. Meanwhile, inclusionary zoning has steadily moved from its suburban origins into the urban scene. Not only has it been adopted in cities like Boston, Washington, San Francisco and Chicago, but it has become a fixture in many European cities, including Paris, London and Barcelona. So, although the devil is in the details—which remain to be worked out—Bill de Blasio and his housing commissioner, Vicki Been, deserve kudos for putting it squarely on the table at last.

What’s fascinating, though, is that the New York Times, which covered the plan in detail and devoted their lead editorial to the subject, simply doesn’t get it.
First, the editorial notes that “New York has had a voluntary plan that has produced about

4,500 affordable units in the last 25 years, which is pretty good but not the scale Mr. de Blasio wants” (my emphasis). Leaving aside the writer’s slightly snarky inference that the mayor is overreaching, the fact is that it’s not ‘pretty good’, it’s downright pathetic. It’s hard to get city building permit data that goes back 25 years, but in the last 10 years alone, the city of New York has issued 163,476 permits for new housing units. If we assume, for argument’s sake, that an equivalent number of units was built during the previous 15 years, and 1 out of 10 of those had been affordable housing through a mandatory inclusionary program—a fairly modest and easily achieved percentage—the city would have had almost 30,000 more affordable units by today. That would be pretty good.

It gets worse. The Times, looking down from its lofty perch, then asks what it clearly sees as the tough question, “what if builders reacted to mandatory inclusionary zoning by not building at all?” Well, if you are under the impression that inclusionary zoning is a new and untried, and perhaps slightly radical initiative—which is true if you don’t look beyond the boundaries of the five boroughs—this is a fair question. The same issue crops up in the Times article, where the reporter, quoting unnamed ‘housing experts’ suggests a downside to inclusionary housing, that it “can reduce or eliminate profits and dissuade developers from building.” I wish I knew which housing experts the reporter talked to, because I can’t think of any credible experts who would say that.

The fact is—and this is a fact, not an opinion—over the past 40 or more years, in any town or city with a strong enough housing market (which certainly includes New York City) which has imposed a mandatory inclusionary program based on reasonable standards and requirements, developers have figured out how to make it work, and gone on building. There are a variety of arcane arguments about who bears the cost of the inclusionary requirements, which are important and interesting but complicated, and which I won’t go into here, but the key point is – no rationally-designed mandatory inclusionary program in a strong housing market has ever led to developers choosing en masse not to build.

I don’t know whether it’s because the Times editors spend too much time lunching with New York’s real estate magnates, or because their city staff have a uniquely parochial vision of the world, in which things aren’t real until they happen in New York City. I suspect the latter, judging from their coverage of the New York City bike-share program last year, which they treated as a path-breaking urban initiative, even though it was merely the latest of over 500 such systems around the world, and far from the largest.

The main thing, though, is that the city people stick to their guns. Inclusionary housing will not solve New York City’s massive housing problems, but it is an important tool, and a major step in that direction.

To learn about inclusionary housing programs around the world, read Inclusionary Housing in International Perspective, a 2011 book co-edited and largely authored by Nico Calavita and Alan Mallach.

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