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Inclusionary housing is for mixed-income areas

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Pro-development boosters are proposing to upend The City’s inclusionary housing policy by allowing market-rate developers to pick and choose winners and losers in deciding which neighborhoods get affordable housing.

In a bold move, these boosters have proposed the Planning Commission on Thursday eliminate the current requirement that so-called “off-site” below-market-rate housing must be built within one mile of the market-rate project. This is an allowed option for developers if the affordable units aren’t actually provided within the market-rate project itself, which is almost always the preference of neighborhood residents who absorb the impact of development. The developers’ proposal would allow them to build those affordable units in any neighborhood, irrespective of where the market-rate project is built.

This proposal is the complete inverse of the long-standing policy of inclusionary housing, which is that it’s a local mitigation to soften the effects of market-rate development on the community in which it’s built. An inclusionary housing policy, as the name suggests, is fundamentally about creating and maintaining inclusive, mixed-income housing and communities. Without question, this was the impetus for crafting The City’s inclusionary law in 2002, under the leadership of then-Supervisor Mark Leno, as those of us who were involved in that effort will recall.

Over the years, the U.S. Supreme Court has heard numerous cases recognizing “exclusionary zoning” as land use policies that had the effect of maintaining racially and economically exclusive cities and neighborhoods. Cities began to develop “inclusionary zoning” as a way to fight racial segregation, requiring that development, to the extent legally allowable, build mixed-income economically inclusive developments.

The City’s last legal “nexus study,” completed in 2007 (an update is about to be published), supported a maximum of 25 percent on-site inclusionary units for rentals and 30 percent for condos, and 34 percent off-site units for rentals and 43 percent for condos. But aside from the numbers, the important point here is that an inclusionary housing policy is not only a local mitigation for development but also about pushing back against segregated communities.

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Disturbingly, the developer boosters’ proposal takes the view that our city’s inclusionary housing requirement is simply a “tool” for funding affordable housing production rather than a policy that directly mitigates the impacts of private development on communities where development happens, not simply wherever developers want it to happen.

At its worst, the developer proposal promises a culture of poaching between The City’s neighborhoods, with their proposal for an off-site geography “waiver” being used by developers to pit neighborhoods against each other for affordable housing. Under this scheme, the developer of a market rate project in the Castro/Upper Market would be allowed to turn its back on that local community and instead build an affordable housing project in the South of Market. The developer of a market-rate project in the Sunset would be allowed to “mitigate” the effects of that development by building affordable housing in the Western Addition. And the developer of a market-rate project in the Mission would be allowed to build an off-site affordable housing project in the Bayview. And so on.

With the Planning Department’s latest Housing Balance Report showing that seven of The City’s 11 supervisorial districts are projected to have zero affordable housing production in the near-term pipeline, this prospect of neighborhood-versus-neighborhood poaching could only further preclude getting a reasonable balance of below-market housing across The City’s neighborhoods. Some may see this resulting landscape of competing fiefdoms as “more effective” from a developers’ vantage point. But for communities on the ground, it does nothing but create intracity competition and uncertainty. And as policy, it would mean that we as a city are supportive of a policy that directs the high-end luxury housing to some exclusive neighborhoods and sends the housing affordable to working- and middle-class people to poorer communities (i.e., where land might cost a little less).

The Mayor’s Office of Housing and the Planning Department have proposed a modest expansion of the current one mile geography standard — to allow off-site inclusionary projects to be within 1¼ mile or within the same neighborhood as the market-rate project. Our group, the Council of Community Housing Organizations, would prefer truly rationalizing the allowed “off-site BMRs” geography to be only within the same actual neighborhood (and a quarter-mile buffer), but we support The City’s proposal as a reasonable middle ground.

Any further dilution of The City’s inclusionary policy is simply a step back to the old days of zoning for exclusionary neighborhoods.

Peter Cohen and Fernando Martí are co-directors of the Council of Community Housing Organizations, representing 23 affordable housing developers and tenant and community organizations.

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