The Tradeoffs of Inclusionary Zoning: What Do We Know and What Do We Need to Know?

Abstract

Inclusionary zoning (IZ), a controversial planning tool for supplying affordable housing, grew significantly during the 2000s' housing boom in the USA. We review the resultant scholarly literature on IZ. Our key reading is that IZ can include both tradeoffs and practical efforts to address them. There is also a need for additional research. More specifically, we find that IZ programs (i) have many components and vary considerably; (ii) can increase affordable housing production and social integration, but there can be a tradeoff between these goals; and (iii) can have slight adverse market effects, but cost-offsets can help mitigate the outcomes. Finally, we discuss the need for more research, particularly in-depth case studies and make suggestions.

Keywords::

• affordable housing
• inclusionary housing
• inclusionary zoning
• social integration

Acknowledgments

This project builds on previous research funded by the John Randolph Haynes and Dora Haynes Foundation. We appreciatively acknowledge their generous support. We also thank three anonymous reviewers and the editor for their suggestions.

Notes

^1. A related planning strategy focuses on overturning, or relaxing, local zoning requirements to make market-based production of affordable housing easier. State governments in the USA, both the legislature and the judiciary, have intervened to limit these exclusionary practices. Two of the best known examples of such state-level intervention are Massachusetts' ‘antisnob’ zoning law, which allows for overturning excessively demanding zoning rules, and New Jersey's judicial ruling, which allows developers prevented from building low-cost housing to sue local governments (Schwartz, 2006). Antisnob laws have also been adopted in Connecticut, Rhode Island (Cowan, 2006) and Illinois (Hoch, 2007). However, in contrast to the strategy of requiring affordable units in market-rate developments, these regulatory approaches promote affordable units only if developers are interested in constructing such housing.

^2. Since 1979, California has a state-mandated Density Bonus Law that encourages the voluntary inclusion of affordable units in market-rate residential developments—effectively requiring all local jurisdictions to adopt voluntary IZ with density bonuses. The state law used to allow a flat density bonus, but in 2004 it adopted a sliding scale basis. Under the original law, developers received a 25% increase in their allowable density if they provided an affordable set-aside of 10% or more for very low-income households, or 20% or more for low-income beneficiaries (Schwartz and Johnston, 1983). The amended law includes a sliding scale density bonus based on the percentage and affordability of set-aside units (Kautz, 2005).

^3. Calavita and Mallach (2010, p. 26) estimate that between 129,000 and 150,000 affordable units have been developed: 65,000–75,000 in California; 25,000–30,000 in New Jersey; 14,000–20,000 in Massachusetts; 15,000 in Montgomery County, Maryland; and 10,000–15,000 elsewhere.

Additional information

Funding

This work was supported by a grant from the John Randolph Haynes and Dora Haynes Foundation.