REUTERS/Shannon Stapleton

New research shows that it doesn’t raise housing costs, but it doesn’t help very low-income families much, either.

When it comes to producing housing for people who don’t happen to be rich, solutions are becoming increasingly difficult to come by. This burden has fallen mostly on the federal government. However, cities have lately been finding ways to get the private home-building sector involved—namely through inclusionary zoning (IZ) policies. Such policies require developers to set aside a certain percentage of units in their buildings for sale or rent at below-market rates. The point of these policies is usually either to increase the share of affordable housing or to break up the socioeconomic and/or racial segregation of a city.

Such policies often invite the ire of private housing developers, however, as seen in California, where the California Building Association has filed several lawsuits to stop inclusionary zoning around the state. The homebuilders believe that local government-imposed inclusionary zoning ordinances constitute an unlawful taking of private property. They also don’t believe that inclusionary zoning actually increases affordable housing. Instead, critics of the policy argue that such zoning actually constrains the housing supply, driving residential costs further up.

"Penalizing homebuilders with more costs and mandates deters the creation of more housing and raises the overall cost of market-rate homes,” said Tony Francois, attorney for the Pacific Legal Foundation, which has been fighting California’s inclusionary zoning policies in court, in a press statement.  

So far, no California court has agreed with Francois or the California Building Association on this. Neither do researchers at the National Housing Conference’s (NHC) Center for Housing Policy, who recently published briefs looking at the impact of inclusionary zoning on the housing market. Lisa A. Sturtevant, a housing policy expert, found in her research for an NHC brief that inclusionary zoning policies have not driven housing costs up in the vast majority of cases where it exists.

“The most highly regarded empirical evidence suggests that inclusionary housing programs can produce affordable housing and do not lead to significant declines in overall housing production or to increases in market-rate prices,” reads the NHC brief, “Separating Fact from Fiction to Design Effective Inclusionary Housing Programs.”  

(National Housing Conference/Lisa A. Sturtevant)

Of course, what works in one city in a specific region of the U.S. won’t work everywhere: Sturtevant points out in the NHC brief that Boston has had trouble controlling housing costs under its IZ policy. The success of IZ is influenced by factors including the strength of the housing market in a given area and whether state laws accommodate such zoning. To explore what makes an IZ program work well, Surtevant worked with Brian Stromberg, an NHC housing-research specialist, on a meta-analysis of a large swath of studies examining IZ programs across the U.S. Some interesting findings from their study, titledWhat Makes Inclusionary Zoning Happen?”:

  1. While there are over 500 cities and counties with inclusionary zoning policies they are mostly concentrated in just three states: California, New Jersey, and Massachusetts.
  2. The goal of inclusionary zoning is to make housing more affordable, but it hasn’t done that so far for people with the lowest wages—“only two percent of programs target households with incomes below 50 percent of [area median income].”
  3. Millennials—young, college-educated renters—are most likely to support inclusionary zoning policies. (It may be the only path they see out of having to live with their parents.)

Perhaps the most surprising finding:

ƒA higher percentage of Democratic voters is associated with slower adoption of inclusionary housing policies. The negative effect that a high percentage of Democratic voters has on the rate of adoption runs counter to the idea that left-leaning populations would be more likely to support redistribution policies. This finding suggests that support for inclusionary housing does not necessarily require that the ‘usual suspects’ of political orientation need to be in place.

Though counterintuitive, in some ways this makes sense. People of lower incomes and people of color most often tend to vote for Democrats. If they already live in economically and racially segregated neighborhoods, they may reject policies that fail to change those dynamics. Additionally, if inclusionary zoning policies aren’t serving those of very low income anyway, as Sturtevant and Stromberg found, then they may oppose them because they don’t make housing affordable enough.

As more cities are joining the IZ fray—New York City recently launched a wide-reaching IZ program—these are the kinds of issues housing officials will need to monitor. If IZ doesn’t ameliorate segregated conditions, or if it reinforces concentrated poverty in long-marginalized communities, then the group of IZ opponents will expand far beyond just the homebuilders associations. If these policies give the appearance of only helping middle-class families, even more people will reject it, regardless of party affiliation.

One city worth looking at right now is Pittsburgh. The city is now considering an IZ requirement as recommended by the city’s affordable housing task force. In a report delivered to Pittsburgh’s mayor on June 1, the task force also asks the city to create an affordable-housing trust fund, and to expand the use of federal low-income housing tax credits. Combined together, the task force figures this will make about 20 percent of the city’s housing affordable.

As for how the inclusionary zoning will play out, the task force is eyeing somewhere between 15 to 20 percent affordable units for projects that receive other building subsidies, and 5 percent for unsubsidized projects. These units should target those making below 50 percent of the area’s median income, according to the task force, which would put Pittsburgh above the IZ norm. Hopefully, that target will stick, and other cities currently considering IZ will adopt those goals as well.

After all, if it’s going to be called “inclusionary zoning,” it should include those who are most in need of housing. People actually need to be able to buy into the properties in order to buy in to the policy.

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