Inclusionary zoning, again

Last week, Payton Chung wrote a really good response to my post on Chicago’s inclusionary zoning ordinance:

We saw very few examples of successful policies that worked in a high-rise context. And since a large share of the development in Chicago, then as now, was in downtown high-rises, we needed to find some way to get buy-in from high-rises…. So, given these difficulties — and given the CDCs’ thirst to capitalize a housing trust fund that could significantly expand their efforts at helping low-income families in neighborhoods (rather than moderate-income singles downtown), we went with the “cash-out” provision that pretty much exempts downtown high-rises.

It’s not that long, but it’s a bit hard to summarize, so you should just read it.

In addition to the high-rise issue, Payton points out – as Alex Block pointed out in comments in the original post – that affordable housing advocates generally have one (or both) of two not entirely compatible goals: 1) to create affordable units in high-rent or gentrifying communities as a way to promote integration, and 2) to create as many units as posssible, which frequently means creating them in already poor neighborhoods, making segregation worse.

My preferences lean towards goal 1, because of the evidence I’ve seen that concentrated poverty is just an overpowering disaster for everyone involved. But goal 2, when there are lots and lots of people who need housing they can afford, isn’t ridiculous.

That said, goal 2 isn’t close to being met, either. The Chicago Rehab Networks’ quarterly housing reports suggest that over the past several years, the city has produced somewhere between one and two thousand affordable units, total, across all programs. Again, given that the need stretches into the hundreds of thousands of units, we’re just not even close – even if we don’t care that the vast majority of those units are being produced in areas that already have concentrated poverty.

Chicago’s subsidized housing policy – like its market-rate housing policy – is still just completely broken. One way to help IZ – that would make progress on both integration and increasing the total number of units produced – would be to allow more medium- and large-scale market housing building in areas where it’s demanded, so the IZ ordinance is triggered much more often. (Recall that it only applies to buildings with at least 10 residential units.) I strongly suspect – although here Payton is certainly more informed – that there is room to raise the opt-out penalty without making a huge amount of market rate construction no longer workable, so that more builders choose to create the units themselves, and even those who don’t help create even more units elsewhere.

Anyone here who wants to talk to me like I’m stupid about residential development finance?

3 thoughts on “Inclusionary zoning, again

  1. I’m on the board of a housing advocacy group that has this debate all the time. Should public dollars buy more housing in poor neighborhoods, or fewer units that help integrate neighborhoods? The cop-out answer is we should have policies that support both approaches. Sigh. In fact, we should have it all: IZ and new housing in distressed neighborhoods and rental assistance and upzoning and better schools and, and, and. But there is a finite pool of housing subsidy money, so the choice has to be made, somehow.

    1. Yeah, I don’t know. I guess for me the bottom line is that I think segregation is basically *the* fundamental problem in a city like Chicago, and so I want to use all tools available to fight it. If you’re focused on simply housing people, then I can understand being frustrated about doing anything other than creating the maximum number of affordable units. I don’t know that there’s any non-debatable answer.

      1. Up-zoning in desirable areas is a net gain to the city and to residents. The people complaining now will barely remember the controversy just a few years after the build-out, the new residents gain, the city makes more property tax. Inclusionary zoning taxes development, driving up costs exactly where you’re trying to cut them; it also won’t solve segregation because it can’t affect areas already posh, built-out, and gated. Subsidized housing is incredibly expensive for the very little good it does.

        Why even spend our social dollars on housing? I’d much rather give cash and allow the poor the dignity of determining their own needs (obviously not realistic for the mentally ill or addicted, but housing is no more a solution for them either). I’m also not even convinced the municipal level is appropriate for social spending- for a jurisdiction so vulnerable to competition, it’s just asking for a race to the bottom.

        To end segregation you need a system that targets actual spatial segregation directly. No innocent-bystander targets like being-urban-but-not-poor or urban-construction Develop a metric for segregation and tax the actual, empowered zoning institution accordingly (ability and accountability need to match). Easier said than done of course, but short-cuts just fail and make the problem seem un-solvable. It might be more politically palatable if based on income not race and if it initally taxes only the worst offenders. Such a system would neither tax away development and nor degrade the area’s competitiveness (might even help).

        Even with such a system, we’d still have large areas with poor public outcomes, though their population should drop, reducing the relative expense of solutions. Since I don’t consider transfer to be a viable strategy, I see two additional non-exclusive possibilities: devolution and recruitment. On devolution, how weird is it that 700,000 black people in a compact, contiguous geographic area don’t have any real self-rule? On recruitment, I mean trying to get the Global City more economically and emotionally invested. You’ve written elsewhere about the terror with which the Global City perceives the South or West Sides, but currently I see ~zero marketing to Global City customers or visitors; the message as received, if not as intended, instead comes from politicos or activists and tends to silence or hostility. There’s also currently zero push to enforce Global City norms of public behavior, which sounds facetious but is a very real barrier.

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