Affordable IZ Housing in SF and DC

Arguments regarding impact of inclusionary zoning programs on housing cost and availability comes with mixed review and lack consistent analysis. Scheutz et al empirical analysis sug¬gests that most of the current literature exaggerates both the benefits and the risks of inclusionary zoning programs dangers of IZ ( 2010). Scheutz et al were able to show that a significant number of affordable housing units in the U.S. have been produced under IZ programs in San Francisco and Washington, D.C. during a period when federal and state funding allocated for affordable housing was reduced (2009).

Inclusionary zoning programs located in the Bay Area of California are mostly mandatory and include cost offsets and alternatives for on-site construction; IZ programs in D.C. also tend to be mandatory in nature, but provide broad exemptions to developers for small unit and low-density builds. In the Boston area, IZ programs are voluntary, yet is restricted to certain developments, such as multifamily housing or units built within certain zoning districts (Scheutz et al, 2009).

The authors conducted regression analy¬sis hoping to determine what charac¬teristics and housing market conditions affect the production of affordable housing through inclusionary zoning. Analysis was also done to examine how IZ programs have affected the price and production of market-rate single-family housing (Schuetz et al, 2010).

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Results from the authors regression analyses showed varying effects that IZ programs increased housing process and lowered production- from suggested increases to no increase at all further making the case that housing prices and production outcomes affected by IZ programs are regional (Schuetz et al, 2010).

While existing literature explores IZ policies sequentially, not much literature examines cross-regional differences in program design (Scheutz et al, 2009). The authors were able to illustrate how strong a tool inclusionary zoning is at addressing the need for affordable housing development. Voluntary IZ programs with cost offsets provided to developers avoid negative impacts on price and production of market-rate housing and potentially result in greater numbers of affordable units being built than a developer who participates in a mandatory IZ program (Schuetz et al, 2010). Due to the wide variation found in IZ across the U.S., city planners and policymakers can shape their IZ program to accommodate local policy goals, regional housing market conditions, preferences of community members along with and variations in state/local political environments (Scheutz et al, 2009).

Critics who argue that IZ program increase housing process and limit housing stock treat IZ policies as a one size fits all when in fact IZ programs vary among municipalities (Scheutz et al, 2009). Scheutz et al recommends that IZ programs be reviewed should be viewed with greater context to individual municipalities’ housing policy, which reflects wider economic conditions as well as other local and state policies (Scheutz et al, 2009). One of the main challenges to identifying the effects of IZ on housing prices and production is the possibly of omitted and unobservable variables.

Jurisdictions that adopt other land use regulations different from IZ program may experience mimic effects of IZ programs, thus attributing the effects of the other policies and practices to those of IZ (Schuetz et al, 2010). The authors noted that inclusionary zoning programs are one of many policies that are likely to have inverse effects on housing production and prices when compared to all other land use regulations, market determinants of supply and demands as well as population size, income, cost of labor and building materials (Schuetz et al, 2010). Lastly, Schuetz et al shared that future literature must recognize the importance of monitoring how inclusionary zoning can be effective during weaker housing markets when developers are less likely to pass costs to consumers (2010).