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Unformatted text preview: J A N U A R Y 2 0 0 9 • Land Lines • LINCOLN INSTITUTE OF LAND POLICY 15 Nico Calavita and Alan Mallach I nclusionary Housing (IH) programs are land use regulations that require developers of market-rate residential development to set aside a small portion of their units, usually between 10 and 20 percent, for households unable to afford housing in the open market. Al- ternatively they can choose to pay a fee or donate land in lieu of providing units. Originating in the early 1970s, inclusionary housing has grown to be a major vehicle by which affordable housing units are provided in large parts of the United States, as well as an important strategy for affordable hous- ing in many other countries. From the first days of IH, there has been wide- spread debate over what is sometimes called the “incidence” controversy—that is, how the costs of providing affordable, and by definition below- market, housing are addressed, and which of the parties in a real estate transaction actually bears those costs. As a result of widespread concern that costs are being borne by developers and/or mar- ket-rate homebuyers, and reflecting legal concerns associated with the takings issue, many municipali- ties enacting inclusionary ordinances have com- bined them with incentives or cost offsets designed to make the imposition of an affordable housing obligation cost-neutral. Many of these incentives, however, displace costs onto the public, either directly or indirectly. We suggest that a better approach is to link inclusionary housing to the ongoing process of rezoning—either by the developer or by local government initiative—thus treating it explicitly as a vehicle for recapturing for public benefit some part of the gain in land value resulting from public action. Inclusionary Housing, Incentives, and Land Value Recapture The La Costa Paloma Apartments in Carlsbad, California, have 180 apartment units affordable to households earning at or below 50 and 60 percent of the area median income. © Nico Calavita 16 LINCOLN INSTITUTE OF LAND POLICY • Land Lines • J A N U A R Y 2 0 0 9 The Evolution of Inclusionary Housing Several factors contributed to the development of inclusionary housing in the early 1970s: efforts to foster racially and socioeconomically integrated communities and combat exclusionary practices; the rise of the environmental movement that spur- red growth management programs; the use of exactions to make development pay for the costs of growth; and sharp housing cost increases, par- ticularly in key areas such as California and Wash- ington, DC. During the 1980s, IH became an im- portant tool to offset the Reagan administration’s savage cuts in federal funding for affordable hous- ing by pushing states and localities to take a more pro-active role in the affordable housing arena....
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This note was uploaded on 09/23/2011 for the course USP 480 taught by Professor Staff during the Spring '11 term at S.F. State.
- Spring '11