Inclusionary Zoning Lite and Little

New Orleans     Catching up on back papers I found both the interesting and the disappointing.

Let’s start by keeping it positive and look at something called RentCheck, which is an application designed for tenants, but gaining some support by landlords, finding it useful enough that they have downloaded it in 40 US states and seven different countries.   RentCheck charges renters $20 per lease and landlords $5 per month to manage properties using the app. The app “…allows renters and landlords to complete a standardized rental inspection with smartphones.  Users can track the condition of a property using time-stamped photos and get access to inspection records at any time.”  This stops the problem of landlords showing up unexpectedly and of tenants having to prove the conditions of the apartment are the same as when they rented so that they are able to recover their security deposits.  If it works, it seems like a win.

On the other hand, we fight for inclusionary zoning everywhere in the world when it means the development of more units of affordable housing, so it seemed like good news seeing a headline that the New Orleans City Council had finally adopted a plan for such zoning in the city, especially since real estate and business interests had tried to get the state to prevent them, forcing a veto from the governor.  The plan seemed pretty complicated though.  It’s not a citywide requirement for developers, but instead is based on maps – that have not been generated yet – that will focus less on areas plagued by dislocation or gentrification, and instead on areas close to public transit and job centers.  Are developers even interested in those areas?  How does this not ghettoize affordable housing rather than beating back gentrifiers?

According to one of the local papers,

“The policy requires a developer building five units or more to make 10 percent of rental units affordable to anyone who earns 60 percent of the area median income, or about $30,000 for a two-person household.  The requirement also applies to homeownership, but the area median income in that case is higher, set at 80 percent, or about $42,000.”

The CEO of the Home Building Association is screaming like a stuck pig that this plan isn’t “workable,” is “anti-business,” and will push developers into surrounding parishes without any restrictions.  Meanwhile to put some sweeteners in the pot for the developers, the city is willing to allow more density, reduce parking requirements if close to a bus stop, and shrink the size of a lot size.

All of which is so much hooey, and this is the punch in the gut to dash any hopes that inclusionary zoning lite or whatever was just passed will really increase affordable housing in New Orleans:

“Consultants told city officials to temper their expectations.  If New Orleans had enacted such a policy five years ago…just 126 affordable units would’ve been created based on projects built since then.”

All of which makes this a drop in the bucket compared to the oceanic problem of affordable housing in New Orleans or any other city thinking about inclusionary zoning.  Why would politicians take the heat and lose the campaign contributions for something that only yields 25 new affordable units per year?  Why pretend to deal with the issue, rather than meeting it head on?

Very disappointing!

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Making Inclusionary Zoning in the US, Canada, and United Kingdom Really Work

inclusionary-zoning-00166325Little 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.

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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.

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