More than one out of every five households in the region pays more than half of their income for housing, and most of these households have low or very moderate incomes. With rents rising virtually everywhere across the tri-state area, there are fewer places where these families and individuals can afford to live. It is particularly difficult, and often virtually impossible, to find an affordable home where the schools are good, the streets are safe, and jobs are accessible by public transit.
This affordability crisis accentuates the deep divides by income and race that stymie opportunities for many poor, especially black and Hispanic residents, to get ahead, and limits the economic potential of the region as a whole. In spite of our diversity, the region is one of the most segregated metropolitan areas in the United States. A contributing factor is that many places still restrict the creation of apartments and townhouses—home types that are generally more affordable than single-family houses. Even when these are permitted, development that includes subsidized housing is often fiercely resisted by existing residents. These regulations exclude poor and even moderate-income residents. Since lower-income residents are disproportionately people of color, and because of previous policies like redlining and restrictive covenants, limited zoning regulations that allow only single-family houses or make no provisions for affordable housing also perpetuate racial and ethnic segregation.
Inclusionary zoning is an effective tool to address segregation while creating more affordable homes
The success of new policies requiring low- and moderate-income homes will be measured by the number of affordable homes that are created and the degree to which it reduces segregation by creating mixed-income communities. Combined with other strategies to increase the construction of multifamily homes and preserve existing affordable housing, the region could produce more than half a million new affordable homes in high-income neighborhoods by 2040. This would increase the share of homes affordable to low-income households, help stabilize gentrifying neighborhoods and expand opportunities to live in neighborhoods with good schools and healthy environments.
Inclusionary zoning can be implemented without government funds beyond the cost of administering and enforcing the program. Rather, it cross-subsidizes homes at below market rents and prices with a portion of the market value of a development project. New rules to allow larger multifamily developments and reduce time and costs of construction would help offset the added costs of providing the affordable homes. In cases where it does not, the cost of subsidizing the below market housing will be borne either in reduced profits to the developer or by delaying construction until the market improves. Government subsidies can also be utilized if the regulation requires more affordable units or lower rents than the market units can support. Ideally, inclusionary zoning should be combined with an effective subsidy policy. Long term, the added costs from the required affordability will result in lower land costs than would have been in place without these requirements.
The major risks are that requirements will be either too weak, and result in little affordable housing and neighborhood desegregation, or so stringent and inflexible that it depresses the housing market long-term. The major limitation is that it is difficult to provide significant and deep housing affordability without government subsidy. Even in strong housing markets, there is a limit to how much projects can internally subsidize low-income housing. Inclusionary zoning cannot solve the problem of housing affordability on its own, but it is an effective strategy for creating mixed-income housing in affluent communities, and expanding housing options for existing residents in gentrifying neighborhoods.
1. RPA, “Spatial Planning and Inequality,” 2015
2. RPA, “Untapped Potential: Opportunities for affordable homes and neighborhoods near transit,” 2017
3. RPA, “Charting a New Course,” 2016