Photo by Marl Wathieu via flickr, CC BY-NC 2.0.
Inclusionary housing has entered a new era. In the 1970s, 80s, and 90s, inclusionary housing (also called inclusionary zoning) policies were adopted by hundreds of municipalities across the country. Most early adopters of inclusionary housing were similar in two ways: One, these communities had high housing costs and robust development activity paired with a relatively progressive, democrat-majority voting public. And two, most of these programs were adopted in states that have laws to incentivize inclusionary housing policies and mixed-income housing development. These states include California, Massachusetts, and New Jersey.
Today’s political and economic context for inclusionary housing adoption is different. Affordable housing used to be part of the social safety net for those in dire need, like food stamps or Medicaid. But as more and more middle-income earners find themselves struggling to afford a decent apartment or buy a home in the community where they grew up, affordable housing policies are no longer primarily anti-poverty strategies. For example, in hot markets like San Francisco, even families who earn as much as 200 percent of the area median income can’t afford housing. And in more affordable housing markets, families with average salaries still struggle to buy their first homes, while many simply can’t.
A growing interest
Policymakers in moderate and softer markets are turning to inclusionary with curiosity. City leaders in Baltimore, Pittsburgh, Buffalo, Minneapolis, Newark, and Detroit are all currently examining potential inclusionary policies. They represent a growing interest in inclusionary policies among cities that have traditionally been able to offer affordable homeownership opportunities to their blue-collar resident base.
These cities delivered, for many years, on the promise of the American dream. Then the industrial jobs left, economies slowed, and workers left. In the decades of decline, housing values and costs also dramatically dropped due to foreclosure, abandonment, and disinvestment. Now, with the flight of young families from super-expensive hot-market cities, an influx of millennial renters who are drawn to the urban core, homeownership losses of the foreclosure crisis, and deterioration of single family home stock due to abandoned and REO properties, the rents and homes for sale have become—for the first time in memory—unaffordable for median income earners.
City leaders in Nashville, New Orleans, Miami, Atlanta, Bloomington, and Durham are also examining potential inclusionary policies. They represent a trend among politically moderate cities within more conservative states that have traditionally lacked the political will to impose restrictions or requirements on business activity, including development. As housing becomes cost prohibitive for new buyers and renters, especially young people wanting to live near their relatives, inclusionary housing has become palatable to a broader swath of the political spectrum in Southern and Midwestern cities.
Skeptics and myths
Though times have changed, many haven’t adjusted the way they talk about affordable and inclusionary housing to fit with today’s realities. As a result, growing interest in inclusionary housing policy has been met with misperceptions and resistance. In the past two years, statewide preemptive measures against adoption of inclusionary housing policies at the local level have been proposed in Indiana, Louisiana, Tennessee and Arizona.
Critiques of inclusionary housing are often based on widespread myths, such as:
“It’s not fair for developers to shoulder the burden of providing affordable housing.”
“Inclusionary housing, just like other bureaucratic impediments to development and restrictive zoning rules, ultimately raise housing costs for everybody.”
“Inclusionary housing requirements will make new housing developments financially infeasible, thereby killing the fragile but recovering housing market.”
Grounded Solutions Network, as well as RAND Corporation, the National Housing Conference, the Furman Center, the Lincoln Institute of Land Policy, and numerous academic institutions produce research that rebuts these myths. However, resistance to inclusionary housing adoption remains strong.
Changing the narrative
We need to talk about inclusionary housing in a different way that circumvents common misperceptions and creates a new narrative for policymakers in moderate markets and more conservative political climates.
Here are 10 messages to help frame the way you talk about inclusionary housing differently. Not every message is right for every community; advocates and policymakers should tailor these messages to their circumstances.
1. Use a different name
The words “inclusionary housing” or “inclusionary zoning” raise red flags in many communities, so call it something else. Name examples include moderately priced dwelling unit program, reasonably priced housing program, smart housing mix policy, mixed income housing, SMART Housing, workforce housing [Editor’s Note: A cautionary note about this term], and density bonus policy. These are a few of the names that have been adopted by cities, but be creative, choose something that will connect with your local audience.
2. It’s a fair trade
Inclusionary housing is a value exchange between the local jurisdiction and developers. Viewed this way, it is a fair deal for developers. Developers are expected to produce housing aligned with community interests in a variety of ways: by building homes that fit in aesthetically, by ensuring adequate parking and greenspace, and by contributing to the need for reasonably priced homes (not just luxury apartments).
In exchange for meeting community needs, developers are granted the right to do business and often receive many other benefits. Inclusionary benefit packages typically include incentives like additional height or density, reduced parking requirements, fast-tracked processing, fee waivers or tax benefits. These benefits reduce the overall cost per unit to build.
3. Place matters
Research consistently shows that children do better when they grow up in a mixed-income community rather than a high-poverty one. Unfortunately, most naturally occurring affordable housing (NOAH), as well as most government supported affordable housing, is in low-income neighborhoods. Inclusionary housing is one of the only policies proven to create lower-cost housing in high-opportunity neighborhoods with good schools.
4. Streamline barriers to development
Many jurisdictions have zoning code requirements that are so complex that it is nearly impossible to build anything without lengthy and unpredictable approval processes for special exceptions to the zoning code. Inclusionary done right can greatly reduce procedural barriers to new development.
Affordable housing requirements are often adopted in combination with area-wide up-zoning or enhanced flexibility to build, by right, a reasonably profitable multifamily building. In these cases, inclusionary housing programs can actually increase development activity. Most importantly, inclusionary housing policies establish clear and predictable expectations that local developers can plan around.
5. It creates housing near jobs and transit
Policymakers and organizations who are passionate about housing should align efforts with the local business community, environmentalists, or public-transit enthusiasts. Inclusionary is a great tool to create housing near job centers and transit corridors. Messages that inclusionary housing policies reduce greenhouse gas emissions from commuting, retain a stable base of local employees, and increase transit ridership can build alliances across policy silos. Beyond the realm of issue-focused policymakers and advocates, this message also reinforces the idea that inclusionary housing does not merely benefit a lucky few, it benefits whole communities.
6. It creates “missing middle” housing
Most inclusionary housing programs serve renters between 50 percent and 80 percent of median income and homeowners between 80 percent and 120 percent of median income. These families and individuals do not typically qualify for federally or locally supported housing programs, and they do not earn enough to afford market-rate housing prices either. Inclusionary housing is one of the few ways to create “missing middle” housing.
7. It conserves scarce public resources
Public funding for housing has been declining for decades, and in the current political climate, will probably continue to shrink. New affordable housing development can require over $200,000 of local investment—per unit. Inclusionary housing is one of the few ways to create reasonably priced housing in the absence of significant public subsidy. Jurisdictions can adopt inclusionary housing without draining the general fund.
8. It’s just one tool in the toolbox
Inclusionary housing should be implemented as one tool in the toolbox. Alone, it cannot solve local affordability challenges, but it does offer unique value and complements other local housing policies and strategies. Additionally, inclusionary housing policies are most effective in stronger housing markets —very soft markets should look to other tools first. It is important to acknowledge the limitations of inclusionary and not frame it as a panacea.
9. Inclusionary is customizable
Inclusionary housing is one of the most highly customizable housing policies that exist. It can be tailored to work across a large region or a specific commercial corridor. It works to create units in very hot markets and in moderate and mixed markets. It can meet the needs of middle-income families or low-income singles. Yet, with the ability to tailor inclusionary also comes a challenge. Inclusionary must be carefully calibrated to work in the context of local market conditions and existing policies. Inclusionary housing policies that are sloppily designed backfire and can fail to produce units, giving inclusionary a bad name.
10. Built-in neighborhood stability
As moderate- and mixed-market cities begin to see areas with new development activity and populations grow, these burgeoning neighborhoods are likely to become more expensive over time. By implementing inclusionary housing policies early (but not too early), policymakers “bake-in” affordability and economic diversity for the long-run. It is an important and now-common national practice to ensure that inclusionary housing units have long terms of required affordability, like 50 or even 99 years, to ensure that the policy can work as a bulwark against future displacement.
A version of this article originally in Grounded Solutions’ 2017 Impact Report.
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Totally useful article. One of the best we have seen over several years of trying to jockey something into position on inclusionary zoning. Thanks.