On Common Ground - Summer 2016: Housing For All

“Inclusionary housing works through the land use approvals process to incentivize or require affordable housing,” said Robert Hickey, who as a researcher for the National Housing Conference wrote a series of reports on the topic.

Inclusionary housing policies first gained attention in jobs-rich suburbs, such as Montgomery County, Md., a near neighbor to Washington, D.C. Created in 1974, the county’s Moderately Priced Dwelling Unit program required projects of more than 50 homes to designate 15 percent of units for moderate to low incomes, in exchange for greater density.

Now, it’s the cities’ turn. As their close-in neighborhoods grow tighter and taller in the construction boom, they are beginning to offer developers a bargain: We will loosen restrictions on density, height, parking requirements or other constraints — allowing you to make more money — if in return you cause below-market rate units to be built. Hickey estimates that 20 cities and towns “are seriously exploring inclusionary housing that weren’t before,” including Nashville, Pittsburgh, New Orleans, Minneapolis and even parts of Detroit. “It used to be mostly focused in California, but is now happening in all sorts of states,” he added.

“There has been this shift in consumer preference toward urban locations, which is great, but they are putting pressure in areas on the people who lived through the bad times,” said Rick Jacobus, author of a recent guide to the topic, called Inclusionary Zoning: Creating and Maintaining Equitable Communities, for the Lincoln Institute of Land Policy. “Inclusionary housing is a good way to address that, as long as it doesn’t create conflict that impedes building, because the first rule of any housing crisis is you have to add units, whatever the income level.” In designing their inclusionary housing approaches, cities are grappling with key policy choices that can make or break their success — and the developers who are being

Inclusionary housing works through the land use approvals
process to incentivize or require affordable housing.

asked to implement the programs. First, what share of a project must be affordable units, and are they required or incentivized? Must they be included on-site, within the development, or can they be built elsewhere? Can developers buy their way out of providing units on-site by contributing to an affordable housing fund?

“For us as REALTORS®, the key issue is whether it is a voluntary policy that uses incentives, or mandatory,” said Jarron Springer, CEO of the Greater Nashville Association of REALTORS®, Inc. As Nashville has become a post-recession leader in attracting jobs, the city for the first time has faced an affordability crunch that prompted City