Maximizing Affordable Housing Production Under Inclusionary Zoning

"Which policy features are associated with affordable unit productivity under IZ [Inclusionary Zoning]?" In "Examining the Effects of Policy Design on Affordable Unit Production Under Inclusionary Zoning Policies" (Journal of the American Planning Association, Vol. 88, No. 4), authors Ruoniu Wang and Xinyu Fu set out to answer this question about the largest national dataset of inclusionary zoning policies in the United States.

Examining the Effectiveness of Inclusionary Zoning

Inclusionary zoning is a strategy by which municipalities exert their authority over land use planning to compel market-rate developers to provide affordable housing. As the authors explain, "The basic path of generating affordable units through IZ is to require lower-income housing units as a portion of newly constructed, market-rate residential developments and, at times, substantial rehabilitations and condominium conversions." Though inclusionary zoning is widespread throughout the U.S., empirical study of the effectiveness of different inclusionary zoning policies is limited.

The authors aimed to rectify this research gap using two datasets. The first was the Inclusionary Housing Program Database by Grounded Solutions Network, which included name, location, year, characteristics, and outcomes (both units and fees) for 27 states and Washington D.C. The second was data from the U.S. Census 2019 American Communities Survey, which included population, median housing price, vacancy rate, and housing units built in or after 2010. The authors also included variables for unaffordability (i.e., median housing price divided by median household income), partisan leaning (i.e., percentage of votes for Clinton in 2016), jurisdiction type (e.g., county), and core-based statistical areas (CBSAs).

Figure 1. Map of the sample area

Table 6. Summary of research findings.

Productivity of Inclusionary Zoning Policies Analyzed

The authors conceptualized the productivity of inclusionary zoning in terms of average annual unit production. Due to data limitations, they focused on programs that involved producing units rather than making a payment to produce units later. Other limitations include selection bias and that the dataset did not include New Jersey, which accounts for more than 25 percent of inclusionary zoning policies in the U.S.

The authors found that "policies that were mandatory, older, covered the entire jurisdiction, or had more complex income requirements designed to reach lower income levels were significantly associated with higher odds of producing any affordable units." Counterintuitively, however, they did not find an association between longer affordability terms (50+ years) and lower affordable unit productivity. For a more detailed summary of their findings, see Table 6.

For practitioners, the authors emphasize that "more stringent IZ policies with flexibility in terms of income levels served not only are more likely to produce affordable units but also have higher odds of being top-producing policies." However, they caution against concluding "that the 'best' policy maximizes all the statistically significant policy features reported here," noting the importance of sensitivity to local objectives and conditions.

Despite the limitations of the dataset, I commend the authors for the rigor and comprehensiveness of their analysis. For future research, it would be interesting to examine not only the quantity, in terms of average annual unit production, but also the quality of the affordable units provided. Though the authors discuss the pros and cons of policies that apply to the whole jurisdiction, future research could consider the spatial distribution of the affordable housing units provided in terms of proximity to resources and harms. Such considerations would yield an even more holistic analysis of inclusionary zoning policies.

Top image: iStock/Getty Images Plus - James Andrews