Welcome to The Inclusionary Zoning Toolbox An APA session sponsored by Zoning Practice Zoning Practice. Used by planners to inform, inspire, and implement smarter landuse practice. American Planning Association National Conference San Francisco, CA March 22, 2005
Inclusionary Housing: A Tool for Our Times Nicholas J. Brunick March 23, 2005 Longmont, CO
Introduction About BPI What is Inclusionary Housing? Why Inclusionary Housing? Nuts and Bolts Key issues (successes & challenges) Fairfax County, VA
About BPI Business and Professional People for the Public Interest (BPI) is a public interest law and policy center dedicated to equal justice and to enhancing the quality and equity of life for all people living in the Chicago region legal assistance research and policy advocacy community organizing
I. What is Inclusionary Housing? Promotes the production of affordable housing by requiring, encouraging, or negotiating for new developments of a certain size to include a percentage of housing affordable to low- and moderate-income households.
II. Why Inclusionary Housing? Top Five Reasons 1. Building Healthy Communities Economic Competitiveness (workforce housing) Social Fabric Housing for all incomes at all stages of life Racial and Economic Integration Balanced Development/Not Sprawl and Disinvestment
II. Why Inclusionary Housing? 2. The Need for Local Solutions Politics and Funding for AH 3. Not Just the Poor 4. Feasible Proven Track Record of Success 5. Flexible and Adaptable Works in Suburbs, Small Cities and Large Cities Denver, CO
II. Why Inclusionary Housing? Boulder, CO Chapel Hill, NC Sacramento, CA Lincoln, MA
II. Why Inclusionary Housing? Chicago. IL Denver, CO
III. Nuts and Bolts Seven Basic Components What s Covered? How Much Affordable Housing? Who Benefits? Who Pays? Flexibility? What About the Working Poor? What Happens on Resale? Fairfax County, VA
1. What s Covered? What developments (type and size) are covered? Type - New construction, rehab, conversions Threshold Range, depending on local housing market and typical development patterns: Longmont, CO= All development Highland Park, IL = 5 units Boston, MA = 10 units Denver, CO = 30 units Montgomery County, MD = 35 units Fairfax County, VA = 50 units
2. How Much Affordable Housing? Set-Aside Requirement: The percentage of units within a proposed development that a developer is required to price as affordable. Set-Asides Range from 10% to 35% - e.g.: San Diego = 10% Santa Fe, NM = 11-16% Highland Park, IL = 20% Newton, MA = 25% Davis, CA = 25-35%
3. Who Benefits? What % of the Area Median Income? Serves a range of incomes e.g., Montgomery County 65% AMI Longmont, CO 60% AMI rental, 80% AMI owner Fairfax County 70% AMI Boston, MA ½ 80%/ ½ 100% AMI Highland Park, IL ½ 80%, up to 1/2 120% AMI owner; 1/3 50%, 1/3 50% - 80%, 1/3 81-120% AMI rental; pricing requirements to ensure range within each income tier Local government may determine priorities e.g., households who live or work in the community
4. Who Pays? Cost Offsets: Provide developers with benefits that help to offset the cost of producing the affordable homes: Density bonus Increased building height allowances Increased Floor Area Ratio Decrease in minimum lot area requirements Reduced front or side zoning setbacks Expedited permit process Fee waivers Reduced parking requirements on the affordable units Cash subsidy (from a local housing trust fund)
5. Flexibility? In Lieu of Options: Sometimes a developer may have an alternative to developing the affordable units on site. Fee In-Lieu Off-Site Development Land Donation As of Right or Discretionary Chicago, IL
6. What About the Working Poor? Housing Provider Provision Designated Non-Profits right to purchase some of the affordable units in any development (Montgomery County, Fairfax County) Help to produce much-needed rental housing Fee in Lieu Money
7. What Happens on Resale? Price Control Period--The length of time a unit is required to be priced as affordable Varies Based on Policy Goal 1. San Diego = No control period 2. Montgomery Co = 10-20 years 3. Boston, MA = In perpetuity 4. Boulder, CO = in perpetuity 5. Highland Park, IL = in perpetuity for sale; 25 years for rental Evidence Supports Success More Study Needed 1) Formulas Allow Equity Building 2) Maintenance and Upkeep 3) Monitoring Use a monitoring agent
IV. Key Issues/Challenges Voluntary or Mandatory? Stopping Development? Harming the Tax Base? Administration and Monitoring Density: The Dreaded D Word Denver, CO
Mandatory, Voluntary, or Case by Case? Communities can decide among a variety of approaches to inclusionary housing Spectrum of Examples from Mandatory to Voluntary
Mandatory Amend the Zoning Code All Developments of x or more units must include x % affordable housing Limited Mandatory Boston (Zoning Changes, City- Owned Land, etc.) Mandatory with Threshold Montgomery County, MD Completely Mandatory Boulder, CO
Voluntary Amend the zoning code to provide incentives for developers that voluntarily include a certain % of affordable housing x or More Units = receive density bonus and parking reductions if x % affordable (e.g. Chicago) Example Irvine, CA Until 2003, 20 year voluntary program producing approximately 3,400 affordable homes.
Case by Case or Ad Hoc An approach based on municipal policy that results in the provision of affordable units through a negotiated process with developers Opportunities: PUD process, rezonings, requests for variations, special use permits or planned development process, TIF projects, public-private partnerships Look for situations where giving developer value or in a negotiating posture Examples include Chapel Hill, NC; Lexington, MA; and Chicago, IL
Recent Experience The Record Mandatory is: 1. More predictable 2. Produces more units 3. Creates a level playing field for all involved The Trend Toward mandatory Examples: Boulder, Cambridge, Pleasanton not enough production Irvine developer request for predictability
Stopping Development? 200 communities Suburbs, small cities, and large urban centers Some Market Adjustment Inevitable 30 years of experience and overwhelming evidence shows that IZ does NOT slow or stop development Loudon County, VA
Harm the Property Tax Base? Studies from a number of communities with IZ show no negative effect on surrounding property values No studies showing a negative effect on local property tax values or overall tax base Adds additional housing units which provide additional tax base to a community The photos that follow illustrate why not
Harm the Property Tax Base? Two affordable town homes in what appears to be a single-family home as part of a single-family subdivision
Is This Legal? Only four legal challenges to IZ, despite over 200 programs nationwide Key Lessons: Appropriate enabling authority Cost offsets and incentives Across the board application Process is important Demonstrate the rationale
Administration & Monitoring Inclusionary Housing Requires Time, Energy, and Commitment = Resources Development Agreements, Cost Offsets, Deed-Restricted Units Options 1) Mandatory and Predictable 2) Use Non-Profits/Monitoring agents No magic bullet
Density: The Dreaded D Word Cost Offsets Density Many Times is Most Valuable Community Perspective Density Is Often a Bad Word Density Can Be Done Well Inclusionary Housing Encourages Creativity
Density: The Dreaded D Word Fairfax County, VA Andover, MA Chicago, IL
Inclusionary Housing: A Tool for Our Times 1. Legal and Proven 2. Produces Results 3. Multi-Faceted and Flexible 4. Local 5. Broad Benefits 6. Do No Harm 7. Tool for our Times
Contact Information Nicholas Brunick BPI 25 E. Washington, Suite 1515 Chicago, IL 60602 (312) 759-8248 nbrunick@bpichicago.org www.bpichicago.org