Expanding Affordable Housing Through Inclusionary Zoning: Lessons from the Washington Metropolitan Area
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_____________________________________________________________________ EXPANDING AFFORDABLE HOUSING THROUGH INCLUSIONARY ZONING: LESSONS FROM THE WASHINGTON METROPOLITAN AREA Karen Destorel Brown A Discussion Paper Prepared by The Brookings Institution Center on Urban and Metropolitan Policy October 2001 ______________________________________________________________________ THE BROOKINGS INSTITUTION CENTER ON URBAN AND METROPOLITAN POLICY SUMMARY OF RECENT PUBLICATIONS * THE DISCUSSION PAPER SERIES 2001 Bigger, Faster. But Better? How Changes in the Financial Services Industry Affect Small Business Lending in Urban Areas Moving Up, Filtering Down: Metropolitan Housing Dynamics and Public Policy Exposing Urban Legends: The Real Purchasing Power of Central City Neighborhoods The Impact of Changes in Multifamily Housing Finance on Older Urban Areas Dealing with Neighborhood Change: A Primer on Gentrification and Policy Choices The Implications of Changing U.S. Demographics for Housing Choice and Location in Cities Lost in the Balance: How State Policies Affect the Fiscal Health of Cities Sprawl Hits the Wall: Confronting the Realities of Metropolitan Los Angeles Growth at the Ballot Box: Electing the Shape of Communities in November 2000 2000 Ten Steps to a High Tech Future: The New Economy in Metropolitan Seattle Who Should Run the Housing Voucher Program? A Reform Proposal (Working Paper) Do Highways Matter? Evidence and Policy Implications of Highways’ Influence on Metropolitan Development Adding It Up: Growth Trends and Policies in North Carolina Cautionary Notes for Competitive Cities (Working Paper) Business Location Decision-Making and the Cities: Bringing Companies Back (Working Paper) Community Reinvestment and Cities: a Literatures Review of CRA’s Impact and Future Moving Beyond Sprawl: The Challenge for Metropolitan Atlanta 1999 Cities and Finance Jobs: The Effects of Financial Services Restructuring on the Location of Employment Ten Steps to a Living Downtown Welfare-to-Work Block Grants: Are They Working? ii Improving Regional Transportation Decisions: MPOs and Certification A Region Divided: The State of Growth in Greater Washington, D.C. Washington Metropolitics: A Regional Agenda for Community and Stability Beyond Social Security: The Local Aspects of an Aging America The Market Potential of Inner-City Neighborhoods: Filling the Information Gap Livability at the Ballot Box: State and Local Referenda on Parks, Conservation, and Smarter Growth, Election Day 1998 Towards a Targeted Homeownership Tax Credit THE SURVEY SERIES 2001 Place, Race and Work: The Dynamics of Welfare Reform in Metropolitan Detroit Rewarding Work: The Impact of the Earned Income Tax Credit Envisioning a Future Washington Tech and Tolerance: The Importance of Diversity in the New Economy Meeting the Demand: Hiring Patterns of Welfare Recipients in Four Metropolitan Areas City Growth and the 2000 Census: Which Places Grew, and Why Downtown Rebound Racial Change in the Nation’s Largest Cities: Evidence from the 2000 Census The World in a Zip Code: Greater Washington, D.C. as a New Region of Immigration Racial Segregation in the 2000 Census: Promising News High Tech Specialization: A Comparison of High Technology Centers Vacant Land in Cities: An Urban Resource 2000 Office Sprawl: The Evolving Geography of Business Unfinished Business: Why Cities Matter to Welfare Reform Flexible Funding for Transit: Who Uses It? 1999 Children in Cities: Uncertain Futures Housing Heats Up: Home Building Patterns in Metropolitan Areas iii Where Are the Jobs?: Cities, Suburbs, and the Competition for Employment Eds and Meds: Cities’ Hidden Assets The State of Welfare Caseloads in America’s Cities: 1999 FORTHCOMING “Segregation Tax”: What Racial Segregation Costs Black Homeowners * Copies of these and other Urban Center publications are available on the web site, www.brookings.edu/urban, or by calling the Urban Center at (202) 797-6139. iv ACKNOWLEDGEMENTS The author would like to thank the many reviewers who provided insight into the complexities of the inclusionary zoning program. This includes program managers from Montgomery, Fairfax and Loudoun counties as well as urban planning consultants familiar with this program and the Greater Washington region. A special thanks is given to Bernard Tetreault and David Rusk. The Brookings Institution Center on Urban and Metropolitan Policy would like to thank the following foundations for their support of our work on improving the health of the Washington metropolitan area: the Morris and Gwendolyn Cafritz Foundation, the Jovid Foundation, the Eugene and Agnes Meyer Foundation, Prince Charitable Trusts and the Trellis Fund. We would also like to thank the Knight Foundation for their support of our efforts to examine the effectiveness of affordable housing programs and the Fannie Mae Foundation for their general support of the Center. ABOUT THE AUTHOR Karen Destorel Brown is a research analyst with the Brookings Institution Center on Urban and Metropolitan Policy. Comments on this paper can be sent directly to the author at [email protected]. The views expressed in this discussion paper are those of the author and are not necessarily those of the trustees, officers, or staff members of The Brookings Institution. Copyright © 2001 The Brookings Institution v ABSTRACT Many jurisdictions are looking for new ways to house not only low-income residents, but also working families who fill critical positions in the labor market. One of the ways in which jurisdictions are meeting this challenge is through inclusionary zoning, a program that principally requires developers to include affordable homes when they build a particular number of market-rate homes. This paper examines the effectiveness of inclusionary zoning programs as tools for not only providing affordable housing, but also ensuring that such housing is built throughout a jurisdiction. Focusing particularly on the Montgomery County, MD ordinance and those found in three other Greater Washington area jurisdictions, this paper will: highlight the effectiveness of inclusionary zoning in several jurisdictions; examine the obstacles facing new and old ordinances alike; and identify where opportunities for change exist to ensure the program’s longevity and productivity. By illustrating how inclusionary zoning has been implemented in this area, we hope to inform those who want to implement inclusionary zoning in their jurisdictions, and to assist those who want to improve and preserve existing ordinances. vi TABLE OF CONTENTS I. INTRODUCTION……………………………………………………………………………………1 II. WASHINGTON REGION INCLUSIONARY ZONING…………………………………………………4 III. PAST RESULTS AND FUTURE CHALLENGES……………………………………………………13 A. ACCOMPLISHMENTS TO DATE………………………………………………………….13 B. CHALLENGES FACING THE REGIONS INCLUSIONARY ZONING ORDINANCES…………17 IV. RECOMMENDATIONS…………………………………………………………………………….23 V. CONCLUSION…………………………………………………………………………………….27 APPENDIX A: MAP OF THE WASHINGTON, DC METROPOLITAN STATISTICAL AREA………………….28 APPENDIX B: CASE STUDIES…………………………………………………………………………….29 MONTGOMERY COUNTY, MD ……………………………………………………………………29 FAIRFAX COUNTY, VA…………………………………………………………………………...31 LOUDOUN COUNTY, VA…………………………………………………………………………32 PRINCE GEORGE’S COUNTY, MD ……………………………………………………………….34 vii I. INTRODUCTION The past decade of strong economic growth brings paradox to many American families. While family income has generally risen, the cost of housing – particularly in the fastest-growing metropolitan areas – remains a serious issue. Nationwide, approximately thirteen million families had critical housing needs in 1999, shown by either paying 50 percent or more of their income toward rent or living in severely inadequate housing.1 Over 3.7 million working families, some easily considered to be middle-class, were among those who faced critical housing problems.2 This represents a 23 percent increase over 1997. There are several trends that have propelled the nation’s affordable housing crisis. First, and fundamentally, wages and incomes have not kept pace with increasing daily living costs such as transportation, health insurance, childcare, and, most importantly, housing. Second, the supply of affordable housing has fallen. The number of rental units affordable to extremely low-income families dropped by 5 percent between 1991 and 1997 — a loss of over 370,000 homes.3 In 1997, only 36 units were affordable and available to every 100 families with incomes at or below 30 percent of area median income. Only 68 units were available and affordable to every 100 families below 50 percent of the median income. When looking at 17 metropolitan areas, researchers found that 200,000 working families could afford to buy homes priced between $50,000 and $75,000, yet only 32,000 homes in that price range were potentially available. But affordable housing is not simply about raw numbers of units – although important. Dense concentrations of affordable housing can have a deleterious effect on neighborhoods, particularly those already riddled with pockets of concentrated poverty. These neighborhoods seldom provide their residents with a full range of economic opportunities or strong public services. Affordable housing needs to be located strategically to create economically integrated communities that allow households of modest means access to a range of opportunities – from good jobs and schools to transportation and safe streets. Officials can use inclusionary zoning as one of a number of tools to meet the housing needs of low-