Encore Episode: Inclusionary Zoning with Emily Hamilton
Oct 2, 2024
auto_awesome
Emily Hamilton, a researcher from the Mercatus Center, dives deep into inclusionary zoning and its effects on affordable housing. She discusses how inclusionary zoning aims to integrate neighborhoods but ironically depends on exclusionary zoning's existence. The conversation highlights challenges in addressing racial and income segregation while evaluating the effectiveness of such policies in cities like D.C. and Baltimore. Hamilton critiques reliance on private solutions for housing and proposes rethinking current strategies to enhance community benefits.
Inclusionary zoning aims to require a portion of affordable units in new developments but may inadvertently raise overall housing costs in tight markets.
The effectiveness of inclusionary zoning is inconsistent across regions, with strict enforcement and local government commitment crucial for success.
Critics argue that for meaningful housing affordability, reforms to exclusionary zoning and expanded federal housing vouchers may be more effective.
Deep dives
Understanding Inclusionary Zoning
Inclusionary zoning (IZ) is a policy that requires new housing developments to include a certain percentage of affordable units. This contrasts with exclusionary zoning, which often restricts housing density and increases property costs. The main objective of this policy is to enhance accessibility for households earning below the regional median income by mandating developers to set aside units at reduced prices. Critics argue that while the intention is to improve affordability, these programs may unintentionally lead to higher overall housing costs due to reduced feasibility of construction in constrained markets.
Benefits and Drawbacks of Mandatory vs. Voluntary IZ
Mandatory inclusionary zoning requires developers to provide affordable units, but it can deter housing development if local officials believe it makes projects unfeasible. On the other hand, voluntary IZ allows developers to add affordable units in exchange for incentives, such as density bonuses. This flexibility can encourage more construction while still providing some affordable options. However, the effectiveness of both approaches is questioned as they depend heavily on existing zoning constraints and market conditions, making broader housing affordability challenging to achieve.
Integration Goals and their Limitations
Inclusionary zoning is often promoted for its potential to promote economic and racial integration by offering affordable units in wealthier areas. However, the actual impact on integration may be minimal, as the number of affordable units is often too small to create significant change in neighborhoods over time. Additionally, the programs frequently target households at 80% of the median income, which may not include the lowest income groups in need of assistance. Critics point out that while some integration might occur at the building level, it does not translate to broader community or school district integration.
Regional Variations in IZ Effectiveness
The effectiveness of inclusionary zoning varies widely across regions, with some areas, like Montgomery County in Maryland, showing successful implementation that yields significant numbers of affordable units. In contrast, jurisdictions with similar policies may struggle to produce even a fraction of those units due to lenient enforcement or loopholes that developers can exploit. These discrepancies highlight the importance of stringent enforcement and the commitment from local governments to uphold the requirements. Additionally, demographic factors and existing housing markets also play a critical role in determining the outcomes of these programs.
Rethinking Housing Affordability Policies
Experts suggest that a more effective approach to increasing housing affordability would involve reforming or eliminating exclusionary zoning regulations altogether. This could include reducing minimum lot sizes and increasing the permitted density of housing developments. Additionally, expanding federal housing vouchers could provide direct assistance to low-income households, addressing the root of the affordability crisis. By shifting the focus away from inclusionary zoning, policymakers may create more sustainable solutions that enhance overall housing availability and affordability in the long term.
Cities have lived with exclusionary zoning for decades, if not generations. Is inclusionary zoning the answer? Inclusionary zoning, or IZ, requires developers to set aside a share of units in new buildings for low- or moderate-income households, seeking to increase the supply of affordable homes and integrate neighborhoods racially and socioeconomically. But how well does it accomplish these goals? This week we’re joined by the Mercatus Center’s Dr. Emily Hamilton to discuss her research on how IZ programs have impacted homebuilding and housing prices in the Washington, D.C. region, and the ironic reality that the success of inclusionary zoning relies on the continued existence of exclusionary zoning. Also, Shane and Mike rant about nexus studies. Originally aired in 2022.