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At issue are the higher per-unit costs of many infill locations and the different set of cost-offsets that may be necessary to keep policies workable for developers in these new environments. 4. As Development Continues to Shift Toward • Developers often take on more risk with high- lnf ill Settings, Policies Written for Greenfield rise developments because they cannot be built Developments May Need Adjusting incrementally in response to market demand, unlike "horizontal" developments in lower-density Many of the nation's inclusionary housing policies settings.49 were written for undeveloped, "greenfield" settings in affluent suburbs. These policies were conceived for communities in which land was relatively plentiful, and Density Bonuses Are More Valuable low densities were feasible. While suburbs remain the in Some Settings than Others predominant location for new housing construction, Because of the higher cost of development associated development patterns are shifting toward compact, with taller buildings that require steel or concrete framing, transit-served neighborhoods closer to the regional elevators, or various other safety features, the primary core - a trend found in nearly three quarters of the cost-offset favored by traditional inclusionary policies - nation's large metropolitan areas, according to recent the density bonus - can sometimes trigger these more research.44 To the extent this shift continues, older expensive construction requirements in an infill setting, policies may need adjusting to remain workable for complicating efforts to use density the offset for developers and newly developed policies may need to inclusionary policies. be adapted to the realities of infill development. Where density limits are low,such as in greenfield settings, At issue are the higher per-unit costs45 of many infill a density bonus can enable a developer':o produce more locations (see below), and the different set of cost- housing units without having to acquire additional land. offsets that may be necessary to keep policies workable This can be very lucrative and help offset losses incurred for developers in these new environments. by offering inclusionary units at below-market prices. There are several reasons why it can be more challenging But when prevailing densities already allow for four- for private developers to include affordable units in or-more stories, accessing density bonuses may denser,infill settings than in lower density suburbs: necessitate moving into the high-rise pertion of the cost curve where per-unit costs become more expensive. ■ Land prices tend to be higher in infill areas. In New York City, density bonuses have had mixed ■ Structured parking is usually needed to accommo- appeal for developers in certain neighborhoods for this date cars in infill areas,at an average cost of$15,000- very reason. In the city's highest density areas-where $20,000 per space, according to one study. Under- developers can already build well over six stories - ground parking can cost$25,000-$35,000 per space.46 and in areas where former industrial/commercial sites • Once buildings reach five-to-six residential sto- are being converted to residential uses, New York ries, they are required to add elevators and shift City has had nearly 100 percent participation in the from wood-frame to steel/concrete construction, city's voluntary inclusionary program, which trades increasing per-unit costs significantly. At heights of higher density for affordability. But in neighborhoods over 100 feet, buildings also take on additional "life/ of intermediate density, such as parts of Brooklyn, safety" costs for features such as sophisticated fire there has been much lower participation because alarm systems, pressurized exit stairs, and other fire accessing density bonuses would require higher, per safety provisions." unit construction costs, but height limits impede tall enough construction to offset these higher costs with ▪ Inclusionary units are more likely to be built in significantly more revenue-generating units.5° the same building as market-rate units (rather than in separate buildings elsewhere on site), making To foster mixed-income developments in infill areas it more difficult to build the inclusionary units at a of intermediate density - where a density bonus lower cost than the market-rate units.4' might trigger higher-cost constructicn requirements 9