A new study by the Center for Housing Policy and New York University’s Furman Center for Real Estate and Urban Policy, released in March 2008, investigates the effects of inclusionary zoning (IZ) policies on the production of affordable housing. Focusing on San Francisco, suburban Boston, and the Washington, DC region, the study asks,
- What kinds of jurisdictions have adopted IZ?
- How much affordable housing has been produced in different IZ programs, and what factors have influenced production levels?
- What effects has IZ had on the price and production of market-rate housing?
In response to the first question, the research finds that larger, more affluent jurisdictions, jurisdictions that are close to other areas that have adopted IZ programs, and jurisdictions that have adopted other land use regulations such as growth management or cluster zoning polices, are more likely to have adopted IZ programs.
This study also finds that the longer an IZ program has been in place, the greater the number of affordable units it has produced. In San Francisco, the programs that exempt smaller projects or provide density bonuses produce more units than less flexible programs. The data in San Francisco show that almost every jurisdiction with an IZ program has produced affordable housing units. The results are not as encouraging in suburban Boston, where 43% of the jurisdictions have not produced any affordable units through the IZ programs, and one third are unable to report on how many units have been produced. The authors indicate that the reasons for the low production of affordable units in suburban Boston could be that the IZ programs are relatively new, many are voluntary, and they apply only to a narrow range of developments.
Finally, this report finds no evidence that IZ programs in the San Francisco area have had an impact on the prices of market-rate single-family houses or on the production rates of these homes. However, the results in suburban Boston do show a small negative impact on the production of market-rate housing and a resulting increase in the prices of single-family homes. Unfortunately, the small number of jurisdictions in the DC area prevented the researchers from conducting statistical analysis on the data from that area.
The authors encourage policymakers to take the following points into consideration when considering implementing IZ programs:
- IZ programs certainly have the potential to produce affordable housing, but should not be seen as a complete solution to a community’s many housing challenges.
- More flexible programs may produce more affordable units.
- Finally, IZ policies will be less likely to have an adverse impact on the price and production of market-rate housing if they provide developers with meaningful density bonuses or effective offsets to the costs of producing affordable housing.
The policy brief and the full working paper can both be found here: www.nhc.org/housing/iz.