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Inclusionary zoning

Health Factors: Housing & Transit
Decision Makers: Community Development Professionals Local Government State Government
Evidence Rating: Some Evidence
Population Reach: 100% of WI's population
Impact on Disparities: Likely to decrease disparities

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Description

Inclusionary zoning is a type of incentive zoning that requires developers to reserve a portion of housing units for low income residents, often with restrictions on resales that specify purchase by low or moderate income households. Inclusionary zoning (IZ) programs may be based on mandatory requirements or development incentives, such as density bonuses, expedited permits and approvals, relaxed design standards, or fee waivers or reductions. Units created via IZ are available to homeowners and renters and are typically part of multifamily developments (Kontokosta 2014, Gibbons 2015, Mukhija 2015).

Expected Beneficial Outcomes

Increased access to affordable housing
Increased access to quality housing
Increased neighborhood socio-economic diversity

Evidence of Effectiveness

There is some evidence that inclusionary zoning (IZ) policies increase access to and production of quality, affordable housing for low and moderate income households, especially in urban areas with strong housing demand (Mukhija 2015Urban-Levy 2012, Mukhija 2010Read 2009, Schuetz 2009, Brookings-Brown 2001). Additional evidence is needed to confirm effects (Karki 2015, Mukhija 2015RAND-Schwartz 2012).

IZ policies appear most effective with incentives for developer participation (Mukhija 2010, Read 2009, Schuetz 2009) and when implemented as part of a multi-component affordable housing strategy (Mukhija 2015). Mandatory IZ programs are more effective than voluntary programs (von Hoffman 2006, Mukhija 2015); however, most states with mandatory programs do not currently have tools to support policy enforcement (Karki 2015).

The amount of affordable housing produced by IZ policies varies with how long the policy has been in place (Schuetz 2011), whether it offers density bonuses or other incentives, and the types of projects eligible for consideration (Mukhija 2015). IZ program design features such as long-term affordability requirements influence the magnitude of the effect IZ policies can have on the supply of affordable housing and the reduction of concentrated poverty (RAND-Schwartz 2012). In larger cities with high cost housing markets such as Boston, San Francisco, and New York City, IZ policies may be associated with increased housing costs and lower production (Schuetz 2011, Madar 2015).

Cities with IZ policies appear to have a larger proportion of multifamily housing units, higher prices for single family units, and smaller single family houses than cities without IZ policies (Mukhija 2015, Bento 2009). IZ policies may also minimize adverse effects of gentrification (Burchell 2000, SCANPH 2005, Urban-Levy 2012, CDC-Gentrification), such as displacement of low income families (Damewood 2011). IZ policies that provide incentives for developers to include public spaces in their plans (e.g., plazas or walkways) may increase access to privately owned public space and increase mixed-use development (Yoon 2015). IZ policies do not appear to change the number of housing projects started (Bento 2009, SCANPH 2005).

To retain affordable housing units over time, IZ policies restrict resale amounts which, in turn, limits tax revenue potential (Karki 2015) and sale proceeds for those units (Gibbons 2015, Dulchin 2013). Additional evidence is needed to determine the effect of IZ policies on the cost of residential development overall (Read 2009).

Implementation

United States

Inclusionary zoning policies are in place in many states. California, New Jersey, Maryland, and Oregon have state mandated policies as of 2015; Massachusetts has both a mandatory and a voluntary, incentive-based policy (Karki 2015).

Many cities have local inclusionary zoning policies. As of 2013, Boston, MA; Denver, CO; Sacramento, San Diego, and San Francisco, CA; and Washington DC have mandatory inclusionary zoning policies (Dulchin 2013, DC-IZ). Burlington, VT has a mandatory policy, which is administered by the Champlain Housing Trust, a community land trust (Burlington-IZ, CHT-VT). Chicago’s IZ program allows developers to pay fees rather than build affordable housing; revenue is then added to the City of Chicago Affordable Housing Opportunity Fund to build or rehabilitate affordable housing, or to the city supported rental assistance program (US HUD-Evidence matters IZ 2013).

Wisconsin

Wisconsin does not have a statewide inclusionary zoning statute (Hollister 2007). Madison, Wisconsin had an IZ program until a sunset clause took effect on January 5, 2009 (Madison-IZ). 

Implementation Resources

ChangeLab-Housing toolkit 2015 - ChangeLab Solutions. Preserving, protecting, and expanding affordable housing: A policy toolkit for public health. 2015. Accessed on October 24, 2016
IHI - Innovative Housing Institute (IHI). Inclusionary housing. Accessed on October 5, 2016
LISC-Affordable housing - Local Initiatives Support Corporation (LISC). Helping neighbors build communities: Affordable housing. Accessed on October 24, 2016
MA EEA-IZ - Massachusetts Office of Energy and Environmental Affairs (MA EEA). Smart growth/smart energy toolkit: Inclusionary zoning. Accessed on September 22, 2016
Nolon 2007 - Nolon JR, Bacher J. Zoning and land use planning. Real Estate Law Journal. 2007;36(73):73–96. Accessed on September 22, 2016
PolicyLink-IZ 2003 - PolicyLink. Equitable development toolkit: Inclusionary zoning. 2003. Accessed on September 22, 2016
ULI-Building healthy places - Urban Land Institute (ULI) and Building Healthly Places Initiative. Building Healthy Places Toolkit: Strategies for Enhancing Health in the Built Environment. Accessed on October 5, 2016

Citations - Description

Gibbons 2015 - Gibbons LK. Considering the cost of inclusionary zoning and resale restrictions in the District of Columbia. Policy Perspectives. 2015;22:1-8. Accessed on September 22, 2016
Kontokosta 2014* - Kontokosta CE. Mixed-income housing and neighborhood integration: Evidence from inclusionary zoning programs. Journal of Urban Affairs. 2014;36(4):716-741. Accessed on September 22, 2016
Mukhija 2015* - Mukhija V, Das A, Regus L, Tsay SS. The tradeoffs of inclusionary zoning: What do we know and what do we need to know? Planning Practice & Research. 2015;30(2):222-235. Accessed on September 22, 2016

Citations - Evidence

Bento 2009 - Bento A, Lowe S, Knapp GJ, Chakraborty A. Housing market effects of inclusionary zoning. Cityscape: A Journal of Policy Development and Research. 2009;11(2):7–26. Accessed on September 22, 2016
Brookings-Brown 2001 - Brown, KD. Expanding affordable housing through inclusionary zoning: Lessons from the Washington metropolitan area. Washington, DC: Brookings Institution; 2001: Discussion Paper. Accessed on September 22, 2016
Burchell 2000 - Burchell R. Inclusionary zoning: A viable solution to the affordable housing crisis? New Century Housing. 2000;1(2):1-37. Accessed on September 22, 2016
CDC-Gentrification - Centers for Disease Control and Prevention (CDC). Health effects of gentrification. Accessed on September 22, 2016
Damewood 2011 - Damewood R, Young-Laing B. Strategies to prevent displacement of residents and businesses in Pittsburgh's Hill District. September 2011. Accessed on October 12, 2016
Dulchin 2013 - Dulchin B, Gates M, Williams B. Housing policy for a strong and equitable city. Toward a 21st Century City for All. 2013. Accessed on September 22, 2016
Gibbons 2015 - Gibbons LK. Considering the cost of inclusionary zoning and resale restrictions in the District of Columbia. Policy Perspectives. 2015;22:1-8. Accessed on September 22, 2016
Karki 2015* - Karki TK. Mandatory versus incentive-based state zoning reform policies for affordable housing in the United States: A comparative assessment. Housing Policy Debate. 2015;25(2):234-262. Accessed on September 22, 2016
Madar 2015 - Madar J. Creating Affordable Housing out of Thin Air: The Economics of Mandatory Inclusionary Zoning in New York City. Housing for an inclusive New York: Affordable housing strategies for a high-cost city. New York University (NYU) Furman Center, 2015. Accessed on October 7, 2016
Mukhija 2010* - Mukhija V, Regus L, Slovin S, Das A. Can inclusionary zoning be an effective and efficient housing policy? Evidence from Los Angeles and Orange counties. Journal of Urban Affairs. 2010;32(2):229–52. Accessed on September 22, 2016
Mukhija 2015* - Mukhija V, Das A, Regus L, Tsay SS. The tradeoffs of inclusionary zoning: What do we know and what do we need to know? Planning Practice & Research. 2015;30(2):222-235. Accessed on September 22, 2016
RAND-Schwartz 2012 - Schwartz HL, Ecola L, Leuschner KJ, Kofner A. Is inclusionary zoning inclusionary? A guide for practitioners. Santa Monica: RAND Corporation; 2012: Technical Report 1231. Accessed on September 22, 2016
Read 2009* - Read DC. The structure and potential economic effects of inclusionary zoning ordinances. Real Estate Issues. 2009;34(2):1–9. Accessed on October 7, 2016
SCANPH 2005 - Southern California Association of Non-Profit Housing (SCANPH). How does inclusionary housing work? A profile of seven southern California cities. Los Angeles: Southern California Association of Non-Profit Housing (SCANPH); 2005. Accessed on September 22, 2016
Schuetz 2009* - Schuetz J, Meltzer R, Been V. 31 Flavors of inclusionary zoning: Comparing policies from San Francisco, Washington, DC, and suburban Boston. Journal of the American Planning Association. 2009;75(4):441–56. Accessed on September 22, 2016
Schuetz 2011 - Schuetz J, Meltzer R, Been V. Silver bullet or trojan horse? The effects of inclusionary zoning on local housing markets in the United States. Urban Studies. 2010;48(2):297–329. Accessed on September 22, 2016
Urban-Levy 2012 - Levy DK, Franks K, Bertumen K, et al. Expanding housing opportunities through inclusionary zoning: Lessons from two counties. Washington, DC: US Department of Housing and Urban Development (HUD), Office of Policy Development and Research (PD&R); 2012. Accessed on September 22, 2016
von Hoffman 2006 - von Hoffman A, Belsky ES, Lee K. The impact of housing on community: A review of scholarly theories and empirical research. Cambridge: Joint Center for Housing Studies (JCHS), Harvard University; 2006:W06–1 Accessed on September 22, 2016
Yoon 2015* - Yoon H, Srinivasan S. Are they well situated? Spatial analysis of privately owned public space, Manhattan, New York City. Urban Affairs Review. 2015;51(3):358-380. Accessed on September 22, 2016

Citations - Implementation

Burlington-IZ - City of Burlington, VT. Inclusionary Zoning (IZ) program. Accessed on September 22, 2016
CHT-VT - Champlain Housing Trust (CHT). Northwestern Vermont-based community land trust (CLT). Accessed on September 22, 2016
DC-IZ - Washington DC Department of Housing and Community Development. Inclusionary Zoning (IZ) Affordable Housing Program. Accessed on September 22, 2016
Dulchin 2013 - Dulchin B, Gates M, Williams B. Housing policy for a strong and equitable city. Toward a 21st Century City for All. 2013. Accessed on September 22, 2016
Hollister 2007 - Hollister TS, McKeen AM, McGrath DG. National survey of statutory authority and practical considerations for the implementation of inclusionary zoning ordinances. Washington, DC: Shipman & Goodwin LLP, National Association of Home Builders (NAHB); 2007. Accessed on September 22, 2016
Karki 2015* - Karki TK. Mandatory versus incentive-based state zoning reform policies for affordable housing in the United States: A comparative assessment. Housing Policy Debate. 2015;25(2):234-262. Accessed on September 22, 2016
Madison-IZ - City of Madison. Inclusionary zoning (IZ) program. Accessed on September 22, 2016
US HUD-Evidence matters IZ 2013 - US Department of Housing and Urban Development (HUD). Evidence Matters: Inclusionary zoning (IZ) and mixed-income communities. 2013. Accessed on February 24, 2017

Page Last Updated

October 14, 2016

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