The Affordable City: Strategies for Putting Housing Within Reach (And Keeping It There) by Shane Phillips

Author:Shane Phillips [Phillips, Shane]
Language: eng
Format: epub
Tags: political science, Architecture, Buildings, Residential, City Planning & Urban Development, Public Policy
ISBN: 9781642831337
Google: oHrtDwAAQBAJ
Publisher: Island Press
Published: 2020-09-15T23:36:22.241442+00:00

31Implement Inclusionary Zoning and Density Bonuses

Affordability requirements and incentives can deliver affordable, income-restricted housing at no cost to the public.

Requiring developments to set aside a share of new units for lowor moderate-income households is an increasingly common practice that may take a few different forms. One is inclusionary zoning mandates, which require all new development to provide some percentage of affordable housing on-site, occasionally allowing for an in-lieu fee to fund off-site affordable housing instead. Another is density bonuses, which offer development enhancements in exchange for affordable units. Incentives such as density bonuses are generally preferable to mandates, but sometimes both are appropriate. Remember from principle 6, “Use a mix of mandates and incentives,” that incentives are best when we want to make a good thing better. Mandates are best when we want to discourage or prohibit something we consider bad.

There are two key distinctions between density bonuses and inclusionary zoning (IZ). One is that density bonuses are typically voluntary, while IZ usually is not. The second is that density bonuses offer something in exchange for affordable, income-restricted units, while IZ generally does not.

And when it comes to affordability requirements, density bonuses are generally preferred. This is for two reasons: First, housing is good, and density bonuses usually deliver more homes—both market-rate and affordable—than either baseline (unmodified) zoning or inclusionary zoning. Second, while density bonuses can be designed poorly such that they’re not used by developers, they’re rarely so poorly designed that they stop projects that would have otherwise gone forward. If density bonuses are not generous enough, developers may just build according to baseline zoning. If inclusionary zoning requirements are too high, developers may build nothing at all.

Density bonuses usually work as follows. Start with baseline zoning, for example, a 20,000-square-foot parcel that allows up to 50 units of housing. In exchange for restricting 15 percent of the units to low-income households, the developer may increase the number of units by 60 percent, increasing the project size to 80 multifamily homes. Because of the 15 percent affordability requirement, 12 of those homes must be rented to low-income households at a reduced rate. Instead of 50 market-rate units, which by themselves are good to have in a city with high costs and limited supply, we now have 68 market-rate units and 12 affordable units, which are really good to have.

It’s important to include other bonuses to complement the density bonus, especially floor area ratio (FAR) and height. Without these bonuses, developers may technically be allowed to provide more units but in practice be unable to do so because they can’t build a bulky or tall enough building to accommodate them all. Other incentives, such as reductions to setbacks, lot width, and lot coverage, as well as reduced minimum parking requirements (or no parking requirements whatsoever), are also helpful.

A valid concern with density bonuses is that they sometimes hold one good policy hostage against another. Parking minimums are a case in point. If we recognize that more affordable housing and less

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