CityLab just launched CityLab University, a series of primers and explainers on concepts related to land-use and zoning regulations. In their pilot entry, Benjamin Schneider explains the policy and politics behind “inclusionary zoning.”
A growing number of cities, counties, and even a couple of states have decided inclusionary zoning is worth it, even as they acknowledge that such policies are hardly a solution to the housing crisis. In one building in San Francisco, for instance, 6,580 households applied for 95 affordable units that were partially funded by IZ policies.
But producing affordable housing is not IZ’s only goal. It was developed in the U.S. in the 1970s in response to the widespread trend of “exclusionary zoning” (also sometimes known as “snob zoning”), which includes zoning practices like mandating minimum lot sizes and other legal loopholes advocated by NIMBYs who seek to prevent the construction of affordable housing in their neighborhoods. In this way, IZ is a tool of desegregation, forcing wealthy people to live cheek-by-jowl with lower-income residents, and improving the latter’s prospects for upward mobility.
Mandating or incentivizing developments above a certain size to set aside a certain number of below market-rate housing has a definite appeal, especially if developments with such units are allowed to build up more than others. But a free lunch it is not.
For city governments, the big appeal of IZ is the fact that it often requires little or no public subsidy. But if the affordable units IZ produces feel “free” to governments, they are anything but for the developers who produce them…
While builders and developers express a range of opinions on IZ, they are usually the primary opponents of these policies. Developers in Chicago and California recently filed lawsuits against their local IZ laws, claiming that they violate private property rights. “Penalizing homebuilders with more costs and mandates deters the creation of more housing, and raises the overall cost of market-rate homes,” said one of the lawyers representing the California Building Association in a press release. This is, essentially, the main argument against IZ.
Additionally, the history of inclusionary zoning as a strategy for creating more affordable housing has achieved mixed results. Schneider uses Washington, DC’s program as a case study, and finds that even after housing developments were delayed due to litigation, the number of affordable units constructed has been modest.
In his review of what the experts think of inclusionary zoning, Schneider finds mixed evidence on whether or not inclusionary zoning itself increases or decreases affordability. Even for their supporters, however, current inclusionary zoning measures are at beast a band-aid rather than an actual solution.