Inclusionary Housing Benefits

Friday, October 2, 2015

Study: Inclusionary Housing Nets Huge Benefits

By John Dorschner 

     A new national study says the little-understood concept of inclusionary housing can be a huge benefit to places like Miami -- where soaring housing prices have exacerbated a severe lack of affordable housing for lower- and middle-income residents. 
    By using mandatory or voluntary measures, the concept tries to ensure that major developers will help pay for affordable units while building the upscale projects like those soaring along the Miami waterfront. 
      About  500 local governments throughout the United States are already using the system in one form or another, reports the Lincoln
Institute of Land Policy in Cambridge, Mass.
Frazier Court in Redmond, Wash., offers six units to those
 making less than 80 percent of area's median income. Photo: City of Redmond.
      In Miami-Dade, Commissioners Barbara Jordan and Xavier Suarez have recently discussed offering some kind of inclusionary measure, but neither has yet to introduce a specific proposal.
   The study, Inclusionary Housing: Creating and Maintaining Equitable Communities,  was released last week.  (Report availableHERE.)
    "In hot-market cities, skyrocketing housing prices push middle class and low income residents far away from well-paying jobs, reliable
Lincoln President George McCarthy
transportation, good schools and safe neighborhoods,” wrote Lincoln Institute President George McCarthy in a prepared statement.
     “Inclusionary housing alone will not solve our housing crisis," McCarthy went on, "but it is one of the few bulwarks we have against the effects of gentrification—and, only if we preserve the units that we work so hard to create.”
        A recent study by The Miami Herald found that affordable single-family housing is likely to be in the western and northern areas, such as West Kendall, West Flagler and Country Club in Miami-Dade -- long commutes from the major job markets.
    Any local campaign toward inclusionary housing is likely to face a major uphill battle in Miami-Dade, which is one of the most segregated large urban areas in the country and has a severe shortage of affordable housing. (See earlier MiamiWebNews story: Fair Housing Push for Highly Segregated Miami.)

     Truly Burton of the Builders Association of South Florida recently told Miami Web News that her organization was opposed to any mandatory payments or use of "inclusionary zoning."
    Elizabeth Plater-Zyberk, former dean of the University of Miami school of architecture, has long been an advocate of inclusionary zoning but has failed to convince local politicians. In 2007, Jordan lost a commission battle to require developers to contribute to an affordable housing trust fund.

Lizz Plater-Zyberk
    The wonkish concept has far-reaching practical applications.  Among other things, advocates like Plater-Zyberk say it could be a big help in reducing Dade's horrendous traffic problems, by allowing lower-income persons to live closer to where they work.
    Here's the Lincoln Institute's definition: "Inclusionary housing refers to a range of local policies that tap the economic gains from rising real estate values to create affordable housing—tying the creation of homes for low- or moderate-income households to the construction of market-rate residential or commercial development."
    In its simplest form, as practiced in upscale Montgomery County, Maryland, developers of more than 20 units must set aside at least 12.5 percent of them for moderately priced rents. In other places, developers contribute to an affordable housing fund, and the units can be built anywhere.
    The Lincoln study, written by Rick Jacobus, notes that the alternative of contributing to a fund "may concentrate affordable units in lower-income areas," increasing segregation, already a problem in Miami-Dade.
Author Rick Jacobus
    Some key finds of the Lincoln report, as reported in a press release:
    -- "Contrary to popular perception, rapid construction of market rate housing actually fuels the need for more affordable housing by changing the character of neighborhoods.
    -- "The most successful policymakers have built public support and worked closely with private developers in the crafting of inclusionary housing policies. 
    -- "Offering flexibility and incentives to developers can prevent negative economic impacts, but these tools need to be used judiciously."

     Among possible incentives: allowing higher density, tax abatements or parking reductions, the Lincoln study said. Inclusionary housing may also lessen public opposition to large-scale projects. 

       One variant is the concept of "linkage," which Commissioner Suarez advocated in a recent public letter.  "Often called 'commercial linkage' programs, 'jobs housing' linkage programs, or affordable housing 'impact fees,' these programs generally collect a fee per square foot from all new commercial development to fund new affordable housing production," the Lincoln report stated.
    The study noted that the lack of affordable housing is getting worse: "A 2015 study commissioned by the Wall Street Journal found that 82 percent of new rental housing in the United States was luxury housing," which creates needs for lower-income workers in the area for restaurant, maintenance and other sectors. As inner areas gentrify, affordable housing gets driven to "the suburban fringe." 

In Williamsburg, Brooklyn, the developer of this luxury tower called the Edge (background), where condos sell for up to $3 million, also built apartments (foreground), which rent for as little as $886, Lincoln study reported. Photo: NYC Department of City Planning.
    The stronger the local real estate market -- such as the boom currently in South Florida -- "the greater the potential for inclusionary housing to make a meaningful difference," the study said.
    In Arlington County, Virginia, local leaders found politicians and developers were brought on board when a survey of 1,700 residents showed 72 percent supported "requiring affordable housing units when developers build or renovate housing." Only 24 percent were opposed, the study said.

              Denver Councilwoman Turns the Tide
    In Denver, Councilwoman Robin Kniech lost an initial battle with developers, but then went on a year-long campaign, starting with a newspaper op-ed piece.
    The Lincoln study quotes the councilwoman said: “Very few of my constituents understood the technical issues involved, but they were almost universally supportive of our goals. . . . We won in the media coverage because our city is changing in ways that most people are not comfortable with."
    In Miami-Dade, much of the lower-income housing projects are concentrated in already poor areas -- including Liberty Square, which is about to undergo a $200 million makeover. 
    "Concentrated poverty was clearly an outcome of the
housing policies of the mid-twentieth century," says the Lincoln report, then cites a Harvard study from earlier this year that showed that poor kids who moved to better neighborhoods tended to do better in school and were more likely to get jobs than those who remained in poor areas.

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