WASHINGTON -- Inclusionary housing – the provision of affordable housing by private developers either through requirements or incentives, and also known as inclusionary zoning – began in the U.S in the early 1970s amid concerns about racial and socio-economic segregation resulting from "snob zoning" in primarily suburban jurisdictions. Since then, cities such as Boston, Chicago, and several in California have adopted the policy of requiring a portion of affordable homes -- typically 15 percent -- in new residential developments. The affordable homes are either marbled into the project, built elsewhere, or developers pay into an affordable housing fund.
Europe and Canada, however, have implemented the policy in new and more comprehensive ways, in many cases based on the idea of value capture -- that providing affordable housing is an appropriate "giving back" to the community, after government makes a zoning change or other action that increases the value of a project. The experience of Ireland, England, Spain, Canada and other nations holds lessons for the U.S., said Nico Calavita and Alan Mallach, co-editors of the recently published volume Inclusionary Housing in International Perspective: Affordable Housing, Social Inclusion, and Land Value Recapture, at a presentation on at the U.S. Department of Housing and Urban Development in Washington on Monday.
The event, attended by nearly 100 housing policy experts from inside and outside HUD, was hosted by HUD's Office of Policy Development and Research and Office for International Philanthropic Innovation, Policy Development and Research, and opened by assistant secretary Raphael Bostic. The event and a new Web site, www.HUDUSER.org, reflects the agency's goal to "scout out and lift up the best ideas, across borders," said deputy assistant secretary Ana Marie Argilagos.
Roughly 7 percent of the housing stock is affordable in Ireland, which has both high homeownership rates and high prices, thanks to its mandatory inclusionary housing policy. England's nationalization of development rights prompts negotiations in every case for affordable homes, France has a "fair share" housing law similar to New Jersey and Massachusetts, and Spain's constitution says communities "shall share in increased values generated by the urban activities of public bodies." The policies complement direct subsidies for housing by being part of private development -- although when development slows down, as it has in the last two years, the affordable homes are also not produced.
Asked how inclusionary housing could catch on more in the U.S., where land use decisions are much more local, Calavita suggested that inclusionary housing should be part of any rezoning or updating of comprehensive plans, especially where greater densities are being allowed. Washington state did just that in 2006, calling for inclusionary housing requirements anytime there is a rezoning. New Jersey passed a similar law in 2008, for whenever zoning for a site is changed from non-residential to residential. Mallach said the federal government could use the "bully pulpit" to encourage inclusionary housing, and perhaps integrate the policy into existing tax-credit programs.
Nico Calavita is professor emeritus in the Graduate Program in City Planning at San Diego State University. Alan Mallach is a nonresident senior fellow at the Metropolitan Policy Program of the Brookings Institution in Washington, DC, and visiting scholar at the Federal Reserve Bank of Philadelphia.