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Affordable Housing: Planner Dreams Create Nightmare Realities

By: Nick Zaiac - @NickZaiac - Jun 3, 2014, 3:57 pm

Español Affordable housing is something that many people find to be among the most important aspects of a city. The problem is affordable housing often runs contradictory to many other goals of urban planners and policymakers. As such, there has been a long-running challenge of balancing affordability with other issues, such as public amenities, economic growth, and neighborhood cohesion.

Last week, this debate over how best to ensure enough affordable housing in the nation’s inner cities was reopened in a post by Emily Washington titled, “How Affordable Housing Policies Backfire.” In it she discusses an idea that has mesmerized urban planners for years: Inclusionary Zoning, or IZ. The idea is based around the concept of trading the right to build more densely for a certain percentage of units to be priced at affordable rates.

By using zoning law and similar tools to force developers to comply, cities are effectively able to force private developers and market-rate buyers to pay for public amenities. These amenities can include not just affordable units, but sometimes parks and green space that taxpayers would otherwise need to pay for.

This doesn’t seem too bad relative to other things government does. So what if some better-off people pay a little more for a condo if it means low prices for those less well off? If only it worked that way in reality. As Washington notes, even the most robust IZ program, Montgomery County, Maryland, has not succeeded in any meaningful way. What is considered the best program in the country has succeeded in providing only 13,000 units in 30 years, in a county with a million people.

If the numbers show IZ programs have outright failed, why is support so strong today? There are many reasons, notably the dispersed costs, as mentioned above. Moreover, IZ allows local politicians to make it seem as though they truly support affordable housing, while not actually making any of the hard choices that come with it. A third, and often ignored, point is the fact that IZ fits within the vision of those making public policy, which is particularly problematic.

Urbanists are fans of a number of factors that can work against affordability, while fitting in with the mindset of IZ. This mindset values things like “liveable” neighborhoods with plenty of public amenities, such as parks, local retail, a nearby grocery store, and other such factors. This seems unobjectionable, although one would hope such neighborhoods could arise on their own. A second factor is mobility, namely “walk-ability,” mass transit, and bicycle infrastructure, such as lanes and cycle tracks. Again, these all seem nice, but it is unclear whether tax dollars should be used to pay for them, given other budget needs, especially mass transit. Moreover, if one attempts to force developers to pay for such amenities, margins shrink, and the incentive to build decreases, hurting affordability.

Inclusionary Zoning Unit in Washington, DC
Washington DC’s first IZ unit sold in July 2013 from this building. Source: Washington City Paper.

A fourth issue, and perhaps most problematic of all, is the requirement that these areas be populated by people of mixed income. This is where the support for IZ seems to be based. IZ forces some degree of income mixing in the same new buildings, which are disproportionately aimed at the rich, as noted by Washington and Stephen Smith. While this forced mixing of classes seems to look nice on paper, the reality can be far different.

Last year, this debate came to a head after a developer planned to provide a separate entrance for its building’s IZ units. More recently, the New York Times reported that residents of IZ units were being refused access to building amenities such as pools, gardens, and meeting spaces. Simply forcing people to live in the same building does not turn it into some wonderful land where those of all backgrounds intermingle, while not addressing the overall affordability problem in any real way. This goal seems good, but IZ just doesn’t do the job well.

Simply put, IZ is an inefficient way to attempt to alleviate the very real problem of urban housing affordability. As Washington notes in her original piece, a far better way to handle housing affordability would be via the tax system. By replacing IZ and other urban affordability programs with a simple cash transfer, the unintended consequences, such as increased luxury apartment construction, would fall away. The merits of subsidized housing can be debated, but if cities wish to subsidize housing, they should simply subsidize it. Roundabout plans such as IZ with multiple, contradictory goals make no sense when the simplest solution to the problem is available.

Nick Zaiac Nick Zaiac

Nick Zaiac is a public-policy researcher in Washington, DC. He also serves as a policy analyst at the Maryland Public Policy Institute. His column, The DC Leviathan focuses on the often-ignored bureaucratic agencies, from the Department of the Interior to the General Services Administration. He has been published in the Baltimore Sun, City AM, CapX, and other outlets. Follow @NickZaiac.