Little Rock In New York City recently there was some guarded optimism among affordable housing advocates when the City Council passed modifications requested by Mayor Bill De Blasio to improve the inclusionary zoning requirements. The new rules would hold developers responsible for providing 20 to 30% of all units as affordable housing to families at 40% to 80% of the median income in the city. Unfortunately not all developments will be under these rules, but only those where the developer is asking for a rezoning on height or density from the City. Earlier the city had modified the ordinance so that such developers could not copy the Mumbai scheme and create separate entrances, lobbies, and amenities or even separate abutting buildings which is allowed by the Bombay Municipal Corporation.
In Toronto inclusionary zoning is now a front burner issue because the province of Ontario is transferring the inclusionary zoning authority to the city by 2017. ACORN was able to get Councilor Mike Layton to move a motion through the council for the city’s research staff to develop options for how the city could most effective implement such zoning practices once the opportunity arrives. John Anderson, ACORN Canada’s head organizer in Toronto, is gearing the campaign to be ready and waiting with a “best practices” proposal.
In London the Mayor scoffed at any requirements that would restrain developers around separate entrances and in council after council, as social housing is being converted and new developments are being constructed, affordability is being defined as a percentage not of median income but of market rate. Given the explosion in rental prices in London, market rate has not been a slippery slope for tenants but a mountain climb, essentially pricing low-and-moderate income families out of the market of even so-called affordable units produced through inclusionary zoning.
ACORN in the United Kingdom is looking with great interest at inclusionary zoning as a potential national campaign that can be won locally given how critical the issue of affordable housing is in all of our cities. Head organizer Stuart Melvin noted that the escape hatch that developers have run battalions through in England is basically a cooking-the-books, funny-money scheme. As described in The Guardian:
“Under Section 106, also known as “planning gain”, developers are required to provide a certain proportion of affordable housing in developments of more than 10 homes, ranging from 35–50% depending on the local authority in question. Developers who claim their schemes are not commercially viable, when subject to these obligations, must submit a financial viability assessment explaining precisely why the figures don’t stack up. In simple terms, this assessment takes the total costs of a project – construction, professional fees and profit – and subtracts them from the total projected revenue from selling the homes, based on current property values. What’s left over is called the “residual land value” – the value of the site once the development has taken place, which must be high enough to represent a decent return to the landowner.
It is therefore in the developer’s interest to maximise its projected costs and minimise the projected sales values to make its plans appear less profitable. With figures that generate a residual value not much higher than the building’s current value, the developer can wave “evidence” before the council that the project simply “can’t wash its face” if it has to meet an onerous affordable housing target – while all the time safeguarding their own profit.”
In Bristol, ACORN noted that “we have 3 major developments, in our neighbourhoods, where it looks like the developer is going to get away with 0-7% [affordable units] (and the 7% only after a fight by local activists).”
Developers make their money by building castles in the sky and then using sleight of hand when the reality starts rising from the ground. They routinely play fast and loose around the finances to get the job done, because their incentive is to get out as soon as the paint dries. Too many politicians in too many places are relying on their contributions to pay their bills to win public office making them weak advocates for tenants. It’s hard to believe such a “partnership” will produce accountability on affordable housing without a fight.
This is a battle to the death to see if we can win enough affordable housing to be able to exercise our rights to the city or whether we will be forced out completely.
Please enjoy Jim James (with the Sachal Ensemble) Love’s in Need of Love
and William Bell’s The Three of Me.
Thanks to KABF.