Certain Inclusionary Zone Characteristics are Associated with Higher Production of Affordable Units

An article in the Journal of the American Planning Association, “Examining the Effects of Policy Design on Affordable Unit Production Under Inclusionary Zoning Policies,” examines the relationship between inclusionary zoning (IZ) policy features and affordable housing production. Inclusionary zoning is a strategy used by local governments to mandate affordable housing development through land use regulations. IZ policies often require or encourage a percentage of newly constructed units to be set aside for affordable housing. However, IZ policies vary widely between jurisdictions and may thus affect housing production differently. The article found that jurisdictions with policies that were mandatory, older, jurisdiction-wide, and more complex with their income requirements were more likely to produce affordable housing units.

The authors used the Inclusionary Housing Program Database and U.S. Census data to examine the influence of IZ policies on affordable housing development across 27 states and the District of Columbia. The Inclusionary Housing Program Database includes data points on 539 IZ policies, including location, year adopted, whether the policy is mandatory, and affordable unit development counts. The researchers used Census data to control for local factors that may impact affordable housing development, such as population count, median housing price, and vacancy rate.

Through a descriptive analysis, the researchers found that most IZ policies were mandatory (70%) rather than voluntary. Ninety-one percent of policies mandated an affordability period of at least 30 years for inclusionary units and 29% of polices mandated an affordability period of over 50 years. On average, IZ policies were 15.7 years old and required that a minimum of 14.7% of units be set-aside for affordable housing.

Of the policies included in the sample, 265 had produced at least one affordable unit, while 225 had produced no affordable units. The researchers found that certain IZ policy features were associated with a greater likelihood of producing at least one affordable unit. Policies that applied to an entire jurisdiction were 72% more likely to produce at least one affordable unit compared to policies that applied to only part of a jurisdiction. Additional incentives for developers, such as density bonuses and decreased permitting fees, also made it 67% more likely that a policy would produce an affordable unit. Mandatory policies were 1.5 times more likely to produce an affordable housing unit compared to voluntary policies. The authors also found that longer affordability terms did not decrease affordable housing production, disproving the notion that longer affordability terms will deter new development.

The authors suggest that policymakers should consider local variables when crafting inclusionary zoning policies. A small locality with limited capacity, for example, may benefit from a simpler IZ policy. Other factors to consider include local housing market conditions, community preferences and buy-in, and the political environment.

Read the article at: https://bit.ly/3KlGuIr