Many local governments in metropolitan areas with high housing costs are adopting inclusionary zoning (IZ) as a means of producing housing that is affordable to low- and moderate-income households without direct public subsidies. Critics charge that IZ ordinances impose additional costs on new development and may lead to reductions in supply and increases in the price of market rate housing. Advocates of IZ argue that any negative effects IZ might have on production can be mitigated through density bonuses or other cost offsets. Rigorous empirical study of the effects of inclusionary zoning ordinances has been hampered by the lack of accurate, timely data describing IZ and the land use regulatory schemes in which IZ programs fit. In this paper, we use panel data on the adoption and characteristics of IZ in the San Francisco and Washington DC metropolitan areas and the Boston-area suburbs to analyze which jurisdictions adopt IZ, how much affordable housing the programs produce and the effects of IZ on the prices and production of market-rate housing. The IZ programs among our sample jurisdictions are complex policies and exhibit considerable variation in their design, particularly across the three regions. We find that larger, more highly educated jurisdictions and those surrounded by more neighbors with IZ are more likely to adopt IZ. Whether and how many affordable units are produced under IZ depends primarily on the length of time IZ has been in place. The results from Boston-area suburbs provide some evidence that IZ has contributed to increased housing prices and lower rates of housing production. There is no evidence that IZ has constrained supply or increased prices among Bay Area jurisdictions. Limitations on the availability and quality of our data suggest that our results should be interpreted cautiously, but also suggest that IZ programs should be designed cautiously to mitigate possible negative impacts on housing supply.
This report details the untapped potential for NYC’s transferable air rights program, a critical tool for high-density housing development in New York City. Using case study examples, the report outlines limitations to the city’s current TDR policies and suggests a policy approach that could unlock millions of square feet of unused air rights to help produce more affordable housing.
Zoning for Affordability: Using the Case of New York to Explore Whether Zoning can be Used to Achieve Income-Diverse Neighborhoods
This article considers the legal limitations on a locality’s ability to regulate land use, in order to evaluate whether mandatory inclusionary zoning can withstand legal challenge. It uses New York City’s recently adopted, ambitious, mandatory inclusionary zoning policy as a case study, and considers how the city might justify the policy in the face of both constitutional and state law challenges. The article concludes that New York City’s policy is likely to survive, but there are open legal questions that make it hard to predict with certainty how the policy will ultimately fare. Inclusionary zoning policies in other jurisdictions are likely to face similar challenges, and the experience of New York City will hold important lessons for other high-cost cities interested in using land use r egulation to foster economically diverse neighborhoods.