ATTACHMENTS - Laserfiche WebLink

Introduction Across the U.S., hundreds of communities are using But over the past five years, a lot has happened that inclusionary housing policies to create affordable affects inclusionary housing pol cies in the U.S.: homes in mixed-income settings. Inclusionary housing policies require or encourage developers to include a • The nation's housing market experienced one of the modest share of homes for low- or moderate-income most significant downturns in the past 120 years. households in otherwise market-rate developments. New construction ground tc a halt even in many Most inclusionary policies are implemented through previously hot markets, and home prices dropped the zoning code, as mandatory requirements, significantly in most places; accompanied by various forms of regulatory relief to help offset the costs of pricing units affordably. • Local and state affordable housing resources These policies are generally known as "inclusionary dwindled, as local revenue sources dried up and zoning" or "IZ." Other policies are voluntary, relying funding was cut for the federal HOME program — instead on incentives such as density bonuses to a block grant to state and local governments for produce affordable homes. In each form, inclusionary affordable housing; housing policies seek to create diverse neighborhoods • California's Palmer court decision in 2009 prompted and broaden the array of affordable housing options available to low- and moderate-income households. most of the state's jurisdictions to cease applying in clusionary housing policies to rental developments, Inclusionary housing policies are attractive to many just as affordability pressures began to escalate in local governments in both the U.S.and abroad because the rental market; of their ability to harness the energy of the private • The elimination of Redevelopment Agencies in Cali- market to create affordable homes while enabling fornia led many jurisdictions it the state to stop enforc- economic integration and social inclusion. Though ing inclusionary policies that were applied only to local not a "panacea" for local affordability problems, as redevelopment areas, while significantly decreasing both opponents and supporters are quick to point funds for the staff that administer inclusionary housing out, inclusionary housing is distinguished by its programs in many municipalities; ability to locate affordable homes in neighborhoods of opportunity where other state and federal housing • Cities and high density suburbs grew at a faster programs often struggle to expand affordable housing rate than the nation's exurbs,°as residential devel- choices for lower-income households. For example, opment occurred increasingly in infill locations;'and a recent study by the RAND Corporation found that, "compared to other affordable housing programs, IZ • HUD expanded its focus on affirmatively furthering programs provide recipients with greater access to fair housing,with heightened scrutiny of local housing low-poverty neighborhoods,which are often correlated policies that impede housing choices for persons of color. with high-performing schools."1 These new developments have c ranged the environment Additional advantages touted by supporters include the for inclusionary housing significantly. With the hous- ability to produce affordable homes without the need ing market finally beginning tc recover, this is a good for public subsidies,the ability to generate funding for time to take stock of the nation's inclusionary housing affordable housing (through cash payments or land policies and assess the new challenges, needs,and op- dedications made in lieu of including affordable units portunities that confront inclusionary housing policies within new development), and a natural tendency to going forward. work best in hot housing markets, precisely where land for affordable homes is hardest to find, and home This report begins by examining how well inclusionary prices are rising most quickly. housing policies have weathered the storm of the past five years. Drawing on an extensive literature review Interest in inclusionary housing accelerated during the and 35 interviews with practitioners, experts, and local first half of the 2000s, as home prices rose rapidly in administrative staff, I outline eight major issues that many communities.2 Observers now estimate there are jurisdictions and inclusionary housing policies face at over 400 mandatory inclusionary policies nationwide,3 the start of 2013.8 I conclude with some thoughts about spread across 17 states plus the District of Columbia.4 promising directions for addressing these challenges Voluntary policies operate in several additional states. and crafting successful policies in the years ahead. 2