Agenda - Planning Commission - 09/04/2014

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Last revised July 24, 2014 Explore inclusionary housing strategies The term "inclusionary housing", and "inclusionary zoning" in particular, originated as a strong response to discriminatory practices such as exclusionary zoning and redlining. These formally institutionalized practices blocked attempts to expand affordability and housing choice, or to integrate various populations. Whether motivated by racial animus, economics, or investment expectation, these practices create and reinforce segregation, and act as powerful symbols of related public issues such as educational parity, job availability and training, and equal access to opportunity. To address the challenges of economic and social segregation, and to overcome powerful political and social stereotypes about housing lower -income persons and families, several cities developed inclusionary zoning. In its purest form, inclusionary zoning requires that any development receiving funding or needing local approvals include a specified amount of housing affordable to low- and moderate -income households, often 20% of units but ranging from 5% to 30%.22 A number of cities nationally and locally have used inclusionary housing policies and programs to good effect. Developments that are intended to be mostly affordable are blending in market rate units in a less traditional but unique way, and mostly market rate developments are including affordable units. Inclusionary program policies and strategies share some common goals: • To create mixed -income neighborhoods and properties where residents benefit equally from public investment. • To incorporate affordable housing into housing of comparable quality and with similar amenities. • To leverage private investment to incentivize affordable unit provision or to provide site -specific or local investments in infrastructure for use and enjoyment of all residents. • To make local requirements around affordable housing more predictable and therefore efficient. • To use local regulatory and review controls to supplement scarce financial resources. • To use combinations of local controls, exceptions, or waivers in conjunction with finance - oriented strategies such as tax abatement or fee waivers, to lower the overall cost of affordable components of projects and make inclusion of affordability more financially and physically possible. Though few would argue the validity of such goals, mandatory inclusionary zoning has come under intense scrutiny from those who believe it impinges on property rights or detracts from future development. The pushback in many jurisdictions has led to an increasing desire to achieve greater inclusion while minimizing political contentiousness. Some of the creative approaches that have emerged include: • Use of Voluntary Systems —instead of requiring that affordability be built into every development, which can theoretically make some projects unfeasible if the required percentage is too high, many jurisdictions use voluntary approaches under which developers who choose to meet or exceed affordability standards receive financial or regulatory incentives, such as a density bonus allowing more market rate units to be built on site. 22 Urban Land Institute. 2012. Making Mixed -Income Housing Work. http://urbanland.uli.org/economy-markets- trends/making-mixed-income-housing-work. 2040 HOUSING POLICY PLAN I METROPOLITAN COUNCIL DRAFT RELEASED FOR PUBLIC COMMENT Part IV: Opportunities for Impact I Page 65