SmartGrowth                                                            &
and prices, which could encourage a greater mix-
ing of household incomes and sizes. Transportation
options, such as bette...
                                                                    hen many Americans look at their neighbors, they
Over the next 25 to 30 years, the U.S. will need    regated?” he said. “You wall yourself off and
             an estimate...
The goals of Smart Growth align
with the goals of people who care
about creating inclusion.
ther and farther from the city...
Beall’s Hill in Macon, Georgia   You get racial
the “racially identifiable populations” the move-          Take, for example, sprawl. It isn’t just a blight on
ment serve...
Gentrif ication                      Is it the blueprint for
                                    neighborhood improvement
                      or some, it can signify many positives:           activity and a sense of community. This scenario...
Residents were able to create a vibrant
               multicultural community.
value of public subsidies used to develop ...
When you have diversity,                                        Eric S. Friedman, a REALTOR® and developer in
where there can be extra costs like
asbestos abatement and environ-
mental issues,” Friedman said.
   As Friedman points o...
The Key to
                                    Family Housing
                                     Smart Growth opens the
                        omes are where jobs go at night. It’s not       The reason is simple, says Hamilton, vice presi-...
In order to maintain
successful family housing
       in developed areas,
  people need to abandon
   the conventional ide...
ing happening’ is not an option. People tend not to
Thirty-five communities [in
  Massachusetts] are actively
   working on implementing
Smart Growth zoning districts.
make h...
A Balance of

          Opportunity                                                             Mixed-income housing
Mixed-income housing should be
                           developed as a broader social goal.
             camp’s assertio...
It’s development where
      almost anybody can live.
Playing by the “rules” of the market                   years to com-...
                                                                                       housing provides
Capitol Hill, Washington, D.C.

   Park DuValle has attracted a wide range of
income levels. Market-rate units are imme...
                                                   orking as a firefighter,...
Sacramento, California

                             Inclusionary zoning is the means to
City leaders realize a strong middle class
            is going to be important to the
             continued vitality of ...
The program has been
                                                         successful at creating new
On Common Ground: Winter 2007
On Common Ground: Winter 2007
On Common Ground: Winter 2007
On Common Ground: Winter 2007
On Common Ground: Winter 2007
On Common Ground: Winter 2007
On Common Ground: Winter 2007
On Common Ground: Winter 2007
On Common Ground: Winter 2007
On Common Ground: Winter 2007
On Common Ground: Winter 2007
On Common Ground: Winter 2007
On Common Ground: Winter 2007
On Common Ground: Winter 2007
On Common Ground: Winter 2007
On Common Ground: Winter 2007
On Common Ground: Winter 2007
On Common Ground: Winter 2007
On Common Ground: Winter 2007
On Common Ground: Winter 2007
On Common Ground: Winter 2007
On Common Ground: Winter 2007
On Common Ground: Winter 2007
On Common Ground: Winter 2007
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On Common Ground: Winter 2007


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Diversity and Smart Growth

People who care about inclusion and diversity are viewing Smart Growth, which supports a greater diversity and connectivity in the physical pattern of growth, as one tool to bring people together across racial and class lines. Coupled with policies and approaches that reduce racial barriers and provide increased economic opportunities for minorities, Smart Growth can get us closer to our ideal of one America.

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On Common Ground: Winter 2007

  1. 1. Diversity SmartGrowth & C ensus Bureau figures tell us that our young families and fewer moderate-income people. nation is becoming more diverse and in Likewise, large-lot zoning results in large, expen- many places there is no longer a majori- sive houses targeted toward a narrow range of the ty population. Communities across the nation, well population. More generally, zoning combined with beyond larger metropolitan areas and immigration marketing methods have resulted in the “one price gateways, are becoming more diverse as their point” subdivision, segregating families by income. African-American, Hispanic and Asian populations An often discussed, but seldom pursued, aspect increase. of Smart Growth is its value as a tool toward inclu- In the nation’s fastest growing metropolitan sion and increased social equity for disadvantaged areas, from 2000 to 2004, minority groups con- minorities. For most of the 20th century, develop- tributed to the majority of population gains. ment patterns, from urban disinvestment to subur- National growth centers such as Las Vegas, ban sprawl encouraged by single-use zoning, rein- Atlanta, Orlando and Phoenix are now prominent forced Americans’ tendency to live among others centers of minority population growth. like themselves—similar income level, same racial Yet in spite of the increasing overall diversity of group, maybe even the same ages or household our cities and suburbs, when we view the nation on type. Increasingly, many people are seeing Smart a local neighborhood scale, America’s minority Growth as an approach that can increase the diver- populations are still largely segregated from the sity of our neighborhoods. But diversity will not majority white population. Growth planning in happen automatically. many communities can reduce the choices people Some Smart Growth methods may naturally have about where they live. Communities that use achieve more inclusion—mixed-use zoning could zoning to exclude apartments will have fewer be used to provide a wider range of housing types 2 ON COMMON GROUND WINTER 2007
  2. 2. and prices, which could encourage a greater mix- ing of household incomes and sizes. Transportation options, such as better transit and better facilities for pedestrians and bicyclists, would allow those without the means to own or operate a car the abil- ity to fully participate in economic and social opportunities. Reducing sprawl can bring needed reinvestment to disadvantaged older neighbor- hoods, bringing a range of incomes and new oppor- tunities to former pockets of poverty. But without a serious focus on inclusion and diversity, Smart Growth development, whether it takes the form of new “greenfield” towns or redevelopment or infill pattern of growth, as one tool to bring people in older neighborhoods, could result in more of the together across racial and class lines. Coupled with predominant pattern of segregation in America. policies and approaches that reduce racial barriers People who care about inclusion and diversity and provide increased economic opportunities for are viewing Smart Growth, which supports a minorities, Smart Growth can get us closer to our greater diversity and connectivity in the physical ideal of one America. For more information on NAR and Smart Growth, go to www.realtor.org/smartgrowth. On Common Ground is published twice a year by the Government Affairs office of the NATIONAL ASSOCIATION OF REALTORS® (NAR), and is distributed free of charge. The publication presents a wide range of views on Smart Growth issues, with the goal of encouraging a dialogue among REALTORS®, elected officials and other interested citizens. The opinions expressed in On Common Ground are those of the authors and do not necessarily reflect the opinions or policy of the NATIONAL ASSOCIATION OF REALTORS®, its members or affiliate organizations. Editor Special Issue Co-Editor Joseph R. Molinaro Fred Underwood Manager, Smart Growth Programs Manager of Diversity Programs NATIONAL ASSOCIATION OF REALTORS® NATIONAL ASSOCIATION OF REALTORS® 500 New Jersey Avenue, NW 500 New Jersey Avenue, NW Washington, DC 20001 Washington, DC 20001 Distribution For more copies of this issue or to be placed on our mailing list for future issues of On Common Ground, please contact Ted Wright, NAR Government Affairs, at (202) 383-1206 or twright@realtors.org. WINTER 2007 ON COMMON GROUND 3
  3. 3. W hen many Americans look at their neighbors, they see themselves. Same skin. Same income. Same— Heading more or less—house. Sometimes it’s by choice. Other times it’s due to lack of choice. Either way, it’s segregation based on race and class. And in many communities, it remains a fact of life. “There are a lot of willing integrationists in American socie- ty, but when you try to find a stable, racially integrated neigh- borhood, there’s not a lot of choice there,” said Sheryll Cashin. Cashin, a law professor at Georgetown University, is the author of “The Failures of Integration: How Race and Class are toward Undermining the American Dream.” Segregation may not be Diversity the law of the land, said Cashin, but after decades of policies and practices that sanctioned and promoted it, segregation based on race and class still dictates housing patterns in many communities. Changing that, she said, will take a conscious effort. “There’s been a high degree of intentionality around [segre- gation] and I don’t think you can counter that by accident,” she said. “If you want inclusion … you have to have policies that reflect that.” As inclusion advocates pursue their agenda, Cashin believes they have a natural—if not always recognized—potential ally in supporters of Smart Growth. And vice versa. “The goals of Smart Growth align with the goals of people who care about creating inclusion,” she said. “It’s not always obvious these people should work together, but they should.” Smart Growth Smart Growth is most often viewed as a tool to address sprawl, congestion and wasteful consumption of land and resource. Can Smart Growth also address issues of race and addresses race class in housing patterns? “I think that it has the potential to do so, but the whole issue and class issues of race and class has to be part of the discussion at the begin- ning,” said Carlton Eley, a member of the Planning and Black By Brad Broberg Community Division of the American Planning Association. “It can’t be an afterthought.” 6 ON COMMON GROUND WINTER 2007 WINTER 2007 ON COMMON GROUND 7
  4. 4. Over the next 25 to 30 years, the U.S. will need regated?” he said. “You wall yourself off and an estimated 45 million new housing units. At the maybe I do the same.” same time, the U.S. is moving toward the day Given the gains achieved by the civil rights when it will become a majority minority country. movement, segregated housing patterns are no The question, said Xavier de Souza Briggs, is how longer about blatant denial of rights. They’re will America grow—together or apart? about lack of choice. Everybody—in theory—is Briggs is an associate professor of sociology and free to live wherever they want. In reality, choices urban planning at the Massachusetts Institute of are limited by what’s affordable. If the only afford- Technology and author of “The Geography of able housing for low-income populations—typical- Opportunity: Race and Housing Choice in ly disproportionately minority—is concentrated in Metropolitan America.” He considers the need to specific neighborhoods, that’s segregation. expand housing choice “the most important invis- “I think we still have to work at this experiment ible policy issue in America today.” we call civil rights and inclusion and diversity,” Briggs calls it an invisible problem because said Eley. “It’s all about choice.” “most white Americans don’t think housing dis- It’s not just about choices denied, though. It’s crimination is much of a problem anymore and also about choices made. As people climb the lad- many black Americans are ambivalent about inte- der, said Cashin, the holy grail of housing is to gration.” Much, however, is at stake, said Briggs. continually “buy into the best neighborhood you “What kind of a democracy can we be if we’re seg- can afford”—neighborhoods typically located far- If you want inclusion … you have to have policies that reflect that. 8 ON COMMON GROUND WINTER 2007
  5. 5. The goals of Smart Growth align with the goals of people who care about creating inclusion. ther and farther from the city and filled with hous- the Federal Housing es of similar price and people of similar class. Administration (FHA) “Most people think of [segregation] as the natural once instructed all state of the real estate market.” private lenders who In any discussion about segregation, there’s an offered FHA-backed elephant in the room that many people pretend loans that it was “nec- isn’t there. “Fear of black people in numbers is a essary that properties contributor to sprawl,” said Cashin, herself an continue to be occu- African American. “People don’t want to admit it, pied by the same spe- but I think that drives a lot of outward movement. cial and racial class- Any metropolitan area that has a black population es,” said Cashin. approaching 20 percent has … very strict patterns Today, that would of racial segregation.” be against the law, yet Briggs agrees. “That fear is there,” he said. many neighborhoods “Everybody is comfortable with some diversity. It’s still suffer the conse- just a question of where the threshold is.” quences of that form Out-and-out racism is not necessarily driving of segregation, said the fear. In fact, Briggs calls young white renters Cashin. Meanwhile, a “the market’s great integrators.” They appreciate host of other policies the affordability, diversity and energy found in and practices contin- inner-city neighborhoods—which is also where ue to perpetuate seg- low-income and minority populations tend to be regation. They include zoning codes that preclude concentrated, he said. affordable housing, lack of public and private Everything changes, however, when renters investment in low-income neighborhoods and the start thinking about buying a home and raising a steering of black and Latino buyers to “appropri- family. That’s when things like property values ate” areas, said Cashin. and school test scores begin to drive their housing If that’s the how-come of segregated housing decisions. “It’s a bit of a confidence game played patterns, what is the why-care? out on a grand level,” said Briggs. “People say, I’m “If you think about what America stands for— not prejudiced, but I’m going to [choose a neigh- freedom, equality, everybody who works hard borhood] based on what other people’s prejudices should be able to progress—our best view of might be.” America is never going to come to pass if we don’t In the past, the institutional forces shaping seg- achieve racial and economic inclusion,” said regated housing patterns were blunt. For example, Cashin. The nitty-gritty is this, said Briggs. Segregated housing patterns limit access to opportunities for Kentlands in Gaithersburg, Maryland WINTER 2007 ON COMMON GROUND 9
  6. 6. Beall’s Hill in Macon, Georgia You get racial inclusion through the collaborations you build. auxiliary units built over the garages or at the rear of full-size homes—that rent for as little as $750 a month, said Thadani. “They’re referred to as a Trojan Horse to increase density,” he said. Auxiliary units add affordable housing to Kentlands without changing the look and feel of the neighborhood from the street, Thadani said. Beall’s Hill is an old residential neighborhood next to Mercer University. To boost the supply of walking-distance housing for university staff/fac- ulty and employees of a nearby medical center, the university and the city of Macon enlisted Ayers/Saint Gross to create a master plan for the neighborhood that would renovate old homes and low-income and/or minority populations. By limit- build new ones. The university is offering a sub- ing choice in housing, segregation limits choice in sidy to employees—17 percent of the final closing education, employment and overall quality of price of a home up to a maximum of $15,000. life—all of which lag where poverty dominates. Many Beall’s Hill homes sat on 200-feet-deep “What’s at stake is the ability of people to function lots with vast back yards. To create more density, in healthy ways,” he said. the lots were split into 100-foot-deep parcels and Count Cashin among those who consider Smart new streets built between the subdivided lots. The Growth a possible remedy—“if it’s done wisely and result is a neighborhood where carefully designed with a degree of intentionality,” she said. “I know new homes of 600 to 2,800 square feet blend seam- what Smart Growth stands for, but the results can lessly with renovated historic mansions of 3,000 vary on the ground.” square feet. “We were very conscious of not being With its emphasis on density, infill develop- able to tell from the street level that this house was ment, access to public transportation and—most different than that house,” said Thadani. importantly—diverse housing types, Smart Growth Kentlands and Beall’s Hill show it’s possible for brings a lot to the inclusion table. Rather than cre- Smart Growth to provide economic inclusion in the ating neighborhoods for a single class of people— housing market. At the end of the day, however, be it high-income or low-income—Smart Growth people are still free to make up their own minds creates neighborhoods where choices exist for about where they want to live. “Just because you both. expand choice doesn’t mean people will avail In some cases, Smart Growth creates affordable themselves of that choice,” said Briggs. choices in affluent communities. In others, it cre- That’s especially true for racial inclusion. “I ates upscale choices in less affluent communities. don’t know how you can encourage one racial Either way, it fosters a less segregated housing group over another,” said Thadani. market. Dhiru Thadani can point to successful It definitely can’t be mandated, said Cashin. examples of each. “No way constitutionally or philosophically would Thadani, a principal with Ayers/Saint Gross it make sense to set aside [private] housing specif- Architects and Planners in Washington, D.C., ically for racial or ethnic groups,” she said. “The helped design Kentlands, a New Urban communi- only way you get racial inclusion is through the ty in Gaithersburg, Md., and Beall’s Hill, a rede- collaborations you build.” velopment project in Macon, Ga. Both feature a The goals of advocates pushing racial inclusion variety of housing choices—not just in the same and those promoting Smart Growth represent “a community but on the same block. convergence of self-interests” that should motivate In Kentlands, $500,000 homes sit next to them to become close allies, said Cashin. Smart $225,000 homes. That’s a small step toward Growth—at least on paper—expands choice in the expanding choice. A bigger one is “granny flats”— housing market. Meanwhile, inclusion—or rather 10 ON COMMON GROUND WINTER 2007
  7. 7. the “racially identifiable populations” the move- Take, for example, sprawl. It isn’t just a blight on ment serves—expands Smart Growth’s political the landscape or a strain on infrastructure. It steers support for the land-use policies it requires. investment, development and people away from “I think we still have to work at fostering a inner-city neighborhoods, which suffer according- sense of parity across communities,” said Eley. ly. “I would say that they’re the biggest victims of “Civil rights is often viewed as a means to an end. sprawl, yet they don’t have a voice in development Financial literacy is another important tool. In the patterns at all,” said Trenholm. “We really feel like end, it’s all about choice.” these groups … need to be represented in some of That’s exactly what the Coalition for Livable the policy decisions happening here.” Communities is doing in Memphis, Tenn. The Inclusion is not just the right thing, it’s what coalition is a community-based network that is many people want, said Cashin. “Right now, promoting Smart Growth “from an equity perspec- there’s more demand for racially integrated neigh- tive,” said Emily Trenholm, executive director of borhoods than neighborhoods to fill the demand,” the Community Development Council of Greater she said. “If you build it, they will come. You may Memphis. “People in low-income neighborhoods not get everybody, but there’s a lot of people who are very focused on neighborhood issues,” said want their children to grow up in diversity.” Trenholm. “They don’t step back and think about Brad Broberg is a Seattle-based freelance writer special- how some of the these bigger issues affect their izing in business and development issues. His work neighborhoods.” appears regularly in the Puget Sound Business Journal and the Seattle Daily Journal of Commerce. There’s a lot of people who want their children to grow up in diversity. WINTER 2007 ON COMMON GROUND 11
  8. 8. Gentrif ication Is it the blueprint for neighborhood improvement or displacement? By Heidi Johnson-Wright 12 ON COMMON GROUND WINTER 2007 WINTER 2007 ON COMMON GROUND 13
  9. 9. F or some, it can signify many positives: activity and a sense of community. This scenario affordable, unique housing stock with has a heavy impact on the residents. Political lines eye-catching architectural details, funky are drawn and strange bedfellows come together. little boutiques and delightful ethnic eateries, brag- Urban pioneers move in—the privileged, the edu- ging rights about a cool zip code. cated, artistic types—attracted by a variety of hous- For others, it means nothing but negatives: ris- ing options, access to transit, cultural aspects, the ing rents, a sense of invasion, changing neighbor- energy, the funkiness.” hood identity and an uncertain future. “The people who move in—the artists, then the Gentrification is one of those words that can trig- hipsters, then the yuppies and the very affluent— ger a variety of reactions and opinions, though its are attracted to the same things that drew the orig- most basic definition is very simple: “people of inal residents, but they are less dependent upon higher income moving into a neighborhood.” them. What are amenities to those who move in were necessities for those who were displaced,” After said Grant. But not everyone agrees on the phenomenon of displacement. Lance Freeman, professor in the urban planning program at Columbia University, believes that dis- placement is not always an automatic, pejorative result of gentrification. “Some people claim to find high amounts of dis- placement, and you would think this is pretty wide- spread. But the studies I’ve seen don’t seem to show a lot of displacement,” said Freeman. In Freeman’s recent book, “There Goes the ‘Hood,” which focuses on black, inner-city neigh- borhoods, he states that “… indigenous residents do not necessarily react to gentrification according to some of the preconceived notions generally attributed to residents of these neighborhoods. Before Their reactions are both more receptive and opti- mistic, yet at the same time more pessimistic and Martindale on the Monon, distrustful than the literature on gentrification Indianapolis, Indiana might lead us to believe.” Freeman doesn’t dispute that negative things It can come in var- can sometimes result from gentrification, yet he ious forms and indis- cites communities—Boston’s Dudley Street and putably signals downtown Brooklyn—that have employed success- change, but just what ful programs and mechanisms to turn the negatives those changes are into positives. and whom they affect In a 2005 issue of Poverty & Race, published by can range across a the Poverty & Race Research Action Council, for- very broad spectrum. mer Berkeley, Calif., Mayor Gus Newport wrote “Urban change is always a traumatic process, about his tenure as the director of Boston’s Dudley and is part and parcel of cities themselves. The Street Neighborhood Initiative (DSNI.) His con- issues become: what is the rate of change? Who are tention is that, in the long run, public affordable the losers, and do they have ways of adapting?” housing resources speed up gentrification and dis- said Benjamin Grant, planner, urban designer, placement. Therefore, community land trusts writer and teacher in the Urban and Regional (CLTs) are a better solution. Planning Program at San José State. “Through a series of policy firsts, DSNI became Looking to his own stomping ground—the San the first community nonprofit organization in the Francisco Bay area—Grant references the San country to be awarded eminent domain powers Francisco Mission District as an example. over vacant land in a 1.3-square-mile area of the “This type of gentrification involves an immi- city of Boston,” wrote Newport. grant neighborhood of residents who are primarily “The CLTs long-term interest in the land and renters. Before gentrification, it’s a thriving neigh- property assures that this balance of interests is borhood with jobs, access to transit, commercial maintained and community wealth is retained. The 14 ON COMMON GROUND WINTER 2007
  10. 10. Residents were able to create a vibrant multicultural community. value of public subsidies used to develop the The development’s potential affects upon the affordable housing is permanently tied to the hous- local community have caused a hue and cry, and ing, thus recycling subsidy dollars from owner to served as a catalyst for a deal that’s been struck owner, assuring long-term affordability and com- between the developer, Forest City Ratner and munity benefit.” ACORN, the Association of Community “Through the community-controlled land trust, Organizations for Reform Now, the nation’s largest the residents were able to create a vibrant multicul- community organization of low- and moderate- tural community, developing hundreds of afford- income families, working together for social justice able homes and providing an opportunity for resi- and stronger communities. dents to personally benefit from the community “When Atlantic Yards was originally proposed, it revitalization they themselves planned,” Newport contained only market-rate rental housing and con- wrote. dominiums. Between 1990 and 2000, the African Atlantic Yards, a proposed mixed-use Frank American population of the area surrounding Gehry and Laurie Olin-designed development in Atlantic Yards decreased by 17.2 percent. For more downtown Brooklyn, will include housing, offices, than a decade, we had seen new high-rise condo- retail and a boutique hotel surrounded by seven- miniums popping up across the downtown plus acres of public open space, plus an arena for Brooklyn skyline—pushing out longtime residents Brooklyn’s NBA franchise, the Brooklyn Nets. and exacerbating the area’s housing affordability While it has yet to be built, Atlantic Yards has crisis,” said Bertha Lewis, executive director of sparked substantial controversy. New York ACORN. WINTER 2007 ON COMMON GROUND 15
  11. 11. When you have diversity, Eric S. Friedman, a REALTOR® and developer in St. Louis, Mo., believes in the importance of it brings new energy and maintaining diversity in creating a real community. “What happens when we don’t have a sense of an improved economy to community? It does something to the fabric of our the community. society when we must drive everywhere instead of walking. This affects everything, from crime right down to one’s personal health,” said Friedman. “Through months of negotiations we arrived at “When you have diversity, it brings new energy New York City’s first legally binding Community and an improved economy to a community. This Benefits Agreement and a groundbreaking helps people to take advantage of the value of Memorandum of Understanding between ACORN diversity. To attract diversity, it helps to have range and Forest City Ratner about the housing compo- of types and prices of housing in a community.” nent of the project.” Friedman has been very involved in getting a Lewis said under the agreement, half of Atlantic 25-percent state historic tax credit and other tax Yards’ 4,500 rental units will be offered at afford- incentives passed in Missouri. able rates. Unlike many NYC affordable apart- “We’ve been a throwaway society. Look at how ments that have a limited range of unit types, this we treat natural resources. The same applies to development will have different apartments that buildings. The (historic tax credit) program can can accommodate household sizes from one to six. bring great economic rewards. The program sup- All 4,500 units, including the 50 percent made ports the renovation of historic properties and affordable, will be rent stabilized. buildings in a historic district and includes home “More than anything, in an era of increasing ownership, multifamily housing, rental housing housing segregation, Atlantic Yards will be one of and requires high renovation standards. The tax the only neighborhoods in Brooklyn where families credit goes to developers as incentives to renovate, of all backgrounds will be able to really live and especially in a high construction cost market, grow together,” she said. Neighborhood clean-up day, Indianapolis, Indiana 16 ON COMMON GROUND WINTER 2007
  12. 12. where there can be extra costs like asbestos abatement and environ- mental issues,” Friedman said. As Friedman points out, gentri- fication doesn’t always equate to tearing down buildings in old neighborhoods and replacing them with out-sized monolithic structures, as sometimes hap- pened during the first wave of American urban renewal. With tax credit programs and creative Indianapolis Mayor, Bart Peterson, looks on redevelopers, restabilizing a as Navonda Adams, lifelong resident of neighborhood can include pre- Martindale on the Monon, speaks in support serving its character and scale. of the neighborhood gentrification. As a former four-term mayor of Indianapolis, author and Urban Land Institute Joseph C. Canizaro Chair for Public Policy, William H. Hudnut, III understands a thing Restabilizing a neighborhood or two about gentrification and effective approach- es to it. can include preserving its “Cities are becoming more sensitive to these issues. You don’t just go in and slash and burn. You character and scale. go in and save,” said Hudnut. “The government has an obligation, as well as When Martindale developer Mike Higbee developers, to work with people and appropriately arrived on the scene four years ago, he saw a once relocate them in the same neighborhood, if their thriving community with strong history of home homes must be taken in creating permanently ownership blighted with abandoned cars, trash and affordable housing or other development projects. overgrown weeds. But he knew things could turn If redevelopment allows for homes to be saved, around without displacing those who wanted to then there needs to be partnerships with communi- stay. The key was the approach. ty development corporations or other nonprofits to “It took us two years to assemble the land, which procure grant funds for restoring the properties.” had enough empty lots to re-knit the fabric of the Hudnut’s advice to communities facing these neighborhood. Then we had to earn the trust of the issues is to employ patience and respect for the existing homeowners. We went door to door telling residents. the residents that no one would be uprooted; no ”As the mayor of Indianapolis, my mantra was one’s home would be taken. We also brought in a ‘avoid the acute angle.’ Don’t let things degenerate community development corporation to get funds into a ‘me versus you’ situation. Come to the table to rehabilitate some of the homes,” said Higbee. and see what we can work out,” he said. Since those early days when the median house Regarding the emotional chord that gentrifica- value was $26,000, they’ve built 22 houses which tion can strike, Hudnut thinks that it’s gotten a have caused the average area home value to jump bum wrap. to $185,000. Of the new homes built, 40 percent are “People start wailing and weeping and gnashing affordable and 60 percent are market rate. their teeth. I think you can say ‘three cheers for With each successive year, they hope to be gentrification,’ especially when it serves to coun- adding 40 to 50 more. Townhomes, apartments, and teract abandonment, increase the tax base and sta- a live/work district are also planned. Some folks bilize a neighborhood.” have already moved in to this neighborhood near a As a good example of a project that utilizes bike/hike trail, and they include lawyers, artists Smart Growth principles to achieve these goals, and an airline mechanic. Hudnut points to Martindale on the Monon, a Said Higbee: “We’re not building housing; we’re revival of a historic downtown Indianapolis neigh- in the business of building a neighborhood.” borhood with new single-family housing. Heidi Johnson-Wright frequently writes about Smart The first 15 home sales happened to be made to Growth and sustainable communities. She and her white young professional trendsetters moving into husband live in a restored historic home in the heart of Miami’s Little Havana. Contact her at: a neighborhood comprised largely of African hjohnsonwright@yahoo.com. American senior citizens. WINTER 2007 ON COMMON GROUND 17
  13. 13. The Key to Family Housing Smart Growth opens the door for affordable family housing options By Christine Jordan Sexton 18 ON COMMON GROUND WINTER 2007 WINTER 2007 ON COMMON GROUND 19
  14. 14. H omes are where jobs go at night. It’s not The reason is simple, says Hamilton, vice presi- a saying California REALTOR® and dent and manager of Alain Pinel REALTORS® developer Jim Hamilton originally branch in Los Altos and 2005 president of the coined, but it is a turn of phrase that has helped California Association of REALTORS®. Without guide his belief that family housing is the fabric of affordable housing options for their employees, a diverse, thriving, well-planned community. employers will relocate their firms. When the jobs In short, without family housing a community’s leave, the workers and their families will follow. social and economic success are at risk. “One thing families create and children create is the future,” Hamilton said. “Who is going to fill into the community and take over the community as we get older and retire if we don’t have children in the environment? Who is going to be there?” Yet resistance to including family housing in communities is commonplace. Exclusionary zoning requirements like oversized lots block affordable options from being built. They also drive up the costs of the home and contribute to widespread and ill use of land. Exclusionary zoning essentially undermines the efforts to build high-density, mixed-use developments that offer a variety of housing options to meet different income levels. Consider Massachusetts. It is the only state to lose population the last two years and it ranks in the bottom five nationally in housing production. It is considered the most expensive housing market in the nation, and it is a prime example of an area where affordable family housing is slipping away. Through exclusionary zoning requirements— namely large lot requirements—communities there have routinely opposed the inclusion of affordable family housing for the local school teacher and his family of four or the area firefighter and her three children. Communities cite any number of reasons for opposing family housing options, such as more traffic congestion, increased demand on infrastruc- ture and increased local taxes to pay for schools. A January 2006 study conducted by the Massachusetts Housing Partnership and the MIT Center for Real Estate indicates that half of the 30,387 new single-family homes built between 1998 and 2002 were built on lots of nearly an acre or larger. In the Western United States, the study indicates, the typical new house is built on about Without family housing, a community’s social and economic success are at risk. 20 ON COMMON GROUND WINTER 2007
  15. 15. In order to maintain successful family housing in developed areas, people need to abandon the conventional ideas. one-quarter of an acre of land and in the South the typical new home lot is one-third of an acre. The study notes only one out of four communi- ties outside the metropolitan area had any multi- family developments of five or more units during the same four-year period. It’s startling statistics like that which helped per new or rehabbed unit—also will be paid to the lead to the passage of 40 S and 40 R, new regula- developer once the permit for the new or rehabbed tions in Massachusetts that deal with growth and is issued. family housing in a New Urbanism, Smart Growth 40 S is meant to work more like an insurance context. policy and won’t trickle into the community unless The first of the new laws—40 R—pays a commu- the school district incurs a deficit due to an influx nity willing to build housing in high density areas. of 40 R housing. The community gets paid an incentive for zoning Thirty-five years before the new Smart Growth the units and then gets state Smart Growth incen- laws, the Massachusetts Legislature passed tive money again when the buildings are complete. Chapter 40 B, or the comprehensive permit law. It 40 S is an incentive to pay for any additional encourages communities to have 10 percent of educational costs related to school-age children their housing stock available for households whose who come from the 40 R produced housing. income is 80 percent or less of median for the area. Thirty-five communities are actively working on When communities don’t meet those standards, implementing Smart Growth zoning districts under developers can apply locally for streamlined “com- chapter 40 R and as of October 3, six Smart Growth prehensive” permits to build mixed-income hous- zones had been approved by local governing bod- ing so long as they are willing to commit at least 25 ies, said Eleanor White, president of Housing percent of the units for residents with below-aver- Partners, Inc., an affordable housing consulting age incomes. firm based in Massachusetts. Nonetheless, when developers try to override 40 R incentive dollars—which range from a low local zoning under Chapter 40 B, “communities of $10,000 for 20 new units to a high of $600,000 for often fight tooth and nail, except for age-qualified, more than 500 units—can begin flowing to the (55 and older) projects that don’t produce chil- communities almost immediately. An additional dren,” said David Wluka, president of the “one time density bonus payment,” set at $3,000 Massachusetts Association of REALTORS®. The WINTER 2007 ON COMMON GROUND 21
  16. 16. ing happening’ is not an option. People tend not to understand.” In California, Hamilton and his partner, Dan Niemann, developed the $25 million El Centro Lorento, a community housing center developed along with the not-for-profit organization Search to Involve Filipino Americans. Although the building was allowed under zoning requirements, it was met with a firestorm of opposition from neighborhoods more than one mile away. Today there is a waiting list for the residences. “The day it opened it was filled to capacity,” said Hamilton, who also is a partner in Neimann Properties. In order to maintain successful family housing in developed areas, people need to abandon the conventional ideas in favor of flexible zoning mod- els. Family housing could be built near the oversize parking lots employers are willing to build to ease parking woes or even over the parking lots if zon- ing was more forward thinking. Employers would have to start playing a role in order for scenarios like that to play out, Hamilton said, adding that communities and municipalities also would need to One thing families work with the employers to help make it all hap- create and children pen. “That takes an awful lot of players getting create is the future. involved,” Hamilton said. Developer businessman Cortez Carter gives Chicago high marks for prioritizing family housing rejected project is then sent to the state Housing in the redevelopment projects occurring there. Appeals Committee for review which takes prece- Carter is the president of the Chicago-based dent over local rules. Quest Development Group, a fully integrated con- In the battle to provide affordable housing, 40 B struction firm with expertise in affordable housing, has been described by many as the stick. 40 R and among other things. He recently built 25 two-unit 40 S are seen as the carrots. family homes in Auburn Gresham and the sur- That’s a description that Wluka considers rounding area. The homes there consist of a two- “unfortunate,” because he believes that 40 B is a story, three-bedroom owner’s unit as well as a two- smart planning tool when applied properly with bedroom, ground-level rental unit. Both the community support. Either way, Wluka said towns owner’s and the renter’s unit are self contained. in Massachusetts need to be more involved with Carter holds the units out not only as family better managing their growth. housing, but stresses that units like those also “You can take command of what’s going on, or encourage home ownership. And it is a way to you can sit back and let it happen to you; but ‘noth- 22 ON COMMON GROUND WINTER 2007
  17. 17. Thirty-five communities [in Massachusetts] are actively working on implementing Smart Growth zoning districts. make home ownership more affordable for many ship.” The majority of those buying homes from families. The self-contained renter’s unit can be Quest Development are former tenants who lived leased to a family member, Carter says, noting that in family housing. “It’s not about who is buying,” pooling funds with a family member divides up the says Cortez. “It’s about buying and bringing fresh family’s financial burdens. Additionally, the people in.” renter’s unit could be rented to a non-family mem- Christine Jordan Sexton is a Tallahassee-based freelance ber and rental income comes in to offset the costs of reporter who has done correspondent work for the the mortgage. Associated Press, the New York Times, Florida Medical Carter says homes such as the ones in Auburn Business and a variety of trade magazines, including Gresham offer families “new forms of home owner- Florida Lawyer and National Underwriter. WINTER 2007 ON COMMON GROUND 23
  18. 18. A Balance of Opportunity Mixed-income housing provides a place for every economic background By Jason Miller O ne of the hallmarks of a healthy commu- income housing,” says Emily Talen, associate pro- nity is a balanced mix of housing fessor of urban and regional planning at the options at a variety of price points, University of Illinois at Urbana-Champaign. “The which in turn encourages economic diversity first addresses the fairness of it: Mixed-income among its residents. In the late 19th and early 20th housing should be developed as a broader social century, this diversity was the default setting in goal because doing so provides a more equitable most American neighborhoods. But as use-based distribution of resources. You’re not concentrating zoning took hold after World War II, it gradually one group in one area with limited resources, while morphed into the current default system, which concentrating another group in another area with a often segregates residential areas by price point, separate group of resources. It’s the geography of effectively creating pods of wealthy homeowners, opportunity, equity, fairness; you want to promote middle-class homeowners and those less fortunate. ‘the American Way.’ In doing so, you build toler- Today, mixed-income neighborhoods—both new ance because there is daily contact among neigh- and revitalized—that follow the tenets of Smart bors. Growth and New Urbanism are beginning to “The other response takes the approach of demonstrate the wisdom of returning to a more urbanist Jane Jacobs. Neighborhoods with an equi- income-integrated development model. While the table mix of housing options help to foster innova- jury is still out regarding how much healthier tion, creativity and economic growth. These neigh- mixed-income neighborhoods are as compared to borhoods provide fertile media for cross-fertiliza- their segregated, conventional suburban counter- tion of cultures and ideas.” parts, anecdotal evidence and a growing body of But these assertions—which are the backbone of empirical studies seem to point to certain realities: proponents’ arguments for mixed-income hous- • Mixed-income neighborhoods alleviate the ing—are not supported by all housing policy adverse effects of high concentrations of experts. According to the findings of a 2002 report poverty, including negative behavior; and by Alastair Smith, who wrote the paper as a Master • Mixed-income neighborhoods offer more life of Public Policy candidate at the Kennedy School of chances and encourage positive, upwardly Government of Harvard University, mixed-income mobile behaviors. housing doesn’t necessarily alleviate poverty and “There are two categories of responses when the effects typically associated with it. While admit- addressing the question of the necessity of mixed- ting to a scarcity of empirical data to support either 24 ON COMMON GROUND WINTER 2007 Oak Hill, Pittsburgh, Pennsylvania WINTER 2007 ON COMMON GROUND 25
  19. 19. Mixed-income housing should be developed as a broader social goal. camp’s assertion, Smith’s report references studies Kansas City were studied, each with a differ- that are inconclusive at best with regard to the role ent mix of incomes; residents interviewed gen- that mixed-income housing plays in healing the rift erally described “low or very low levels of between the haves and the have-nots in America neighboring, even lacking the ability to name today: their immediate neighbors.” • One study addressed a deteriorating public- It should be noted that the above studies were housing project in Chicago, which was rede- not performed in comparison to conventional sub- veloped into Lake Parc Place; only moderate urban developments (CSDs); i.e., no interviews levels of interaction were found among resi- were conducted to demonstrate the level of interac- dents after redevelopment; tion among neighbors in the same regions’ CSDs. • Various developments in New York City, Few Smart Growth or New Urban practitioners Boston, Chicago and the Bay Area of would claim that mixed-income housing is a silver California were studied; interaction between bullet that will solve the ills of the ever-widening income groups was “unclear” or “difficult for income gap in the U.S. Indeed, any type of housing the authors to gain;” and project often takes years, even decades, to come • Seven other mixed-income developments in into its own and become the best—or the worst—it Boston, New Haven, Conn., San Francisco, can be. But a growing number of projects funded Oakland, Montgomery County, Md., and with a wide range of public and private moneys are providing environments that encourage economic, social, mental, physical and even spiritual well- Oak Hill, Pittsburgh, Pennsylvania being for their residents. Tools of the trade Creating this income diversity comes at a cost. “The idea of mixed-income housing goes against the land market in America; it’s radically different,” says Talen. “We can’t just expect that if we build free-market housing, things will work out [for low- income families]. Most of the time, mixed-income housing is accomplished using outside money.” That funding can come in dozens of forms, including city funds, local or housing authorities, corporations, private foundations, housing advoca- cy groups and other related nonprofits, low-income housing tax credits, or a federal source, such as the HOPE VI program, which aims to fund projects that provide a mix of public housing, affordable housing and market-rate housing. Mixed-income housing projects that don’t use some form of public funds are Crawford Square, Pittsburgh, Pennsylvania extremely rare; even those that purport to be These purely market- neighborhoods based usually have benefited provide cross- from some form of taxpayer fertilization of funding during their financing cultures and ideas. stage. 26 ON COMMON GROUND WINTER 2007
  20. 20. It’s development where almost anybody can live. Playing by the “rules” of the market years to com- But market-based projects do exist; from the plete. The small to the large. master plan Throughout our nation’s housing history, the for this proj- individual homeowner had the right idea. ect calls for diverse housing types that include Homeowners knew their neighborhood and their townhouses; three, four, five and six flats; and mid- community’s housing market. They knew how to rise buildings. More than 1,300 units will be built tap into their property value—that if they convert- as part of the plan for Stateway redevelopment. In ed their houses’ upper floors into affordable apart- the end, Stateway Gardens will offer 439 units at ment flats or built an additional unit over the market rate, 437 units as affordable housing and garage, there were plenty of people willing to rent 439 public housing units. from them. These accessory dwelling units (ADUs), traditionally known as granny flats, supplemented Power of partnership income and made for a nice retirement income dur- Developer and property manager McCormack ing the 1940s and 50s. ADUs naturally promoted Baron Salazar (MBS), based in St. Louis, Mo., mixed housing and offered affordable housing for takes a “team” approach when building and revi- working-class families. Today, these types of units talizing mixed-income neighborhoods. For more are making a comeback. Homeowners still find the than 20 years, the firm has worked with residents, extra income appealing and developers are includ- neighborhood groups, financial institutions, foun- ing them in Smart Growth plans. Communities and dations, state and local governments and federal cities across the country are finding these units an agencies, pulling together funds and nurturing appealing option to meet higher-density require- political will to create better neighborhoods that ments and to promote the diverse neighborhoods bring together residents from virtually every eco- many homebuyers would like to see return and nomic stratum. now seek out. “From a market perception, it’s development Market–based, mixed-income projects exist on a where almost anybody can live,” says Executive larger scale as well. One such effort, Stateway Vice President Vince Bennett. “[The mix of housing Gardens, developed by Stateway Associates LLC, is options] helps us to avoid the perception that a located on the western edge of Chicago’s development is only affordable product. Plus, all of Bronzeville community. The 33-acre Stateway site our units have market-rate amenities, so the conti- was originally built in 1958, and consisted of 1,644 nuity of quality is maintained throughout the public housing units in eight high-rise buildings. development.” Only two of these buildings are left; they currently McCormack Baron Salazar developed the first house about 600 residents and will eventually be HOPE VI project, Centennial Place, in the down- demolished. The first six buildings to be demol- town commercial district of Atlanta, Ga., using a ished will be replaced by a lower density, mixed- mix of funds from HOPE VI, local city/state funds, income community. private equity and a first mortgage. Begun in 1996 The redevelopment plan for Stateway Gardens is Centennial Place is nearing completion with four of divided into four phases and will take up to six its five phases out of the ground. It replaces the WINTER 2007 ON COMMON GROUND 27
  21. 21. Mixed-income housing provides choices for persons of all incomes and stages of life. Park DuValle, Louisville, Kentucky aged Techwood Homes (built in 1936) with a neighborhood that provides 40 percent of its hous- ing to market-rate buyers, 40 percent to public housing residents and 20 percent to tax-credit investors—investors who purchase tax credits from the original holder of those credits, often a develop- er, for a to-be-determined sum on the dollar. For example, a brokerage firm could be a tax-credit investor. The tax credits generate equity in a deal; the investor purchases the credits by putting capi- tal—i.e., cash—into the partnership. “We typically go into difficult-to-develop areas,” says Bennett. “That’s our niche.” Democratic treasures One such project is Pueblo del Sol, a mixed- income housing development in Los Angeles, Calif. “Mixed-income housing provides choices for A joint effort between MBS, The Related persons of all incomes and stages of life to live in a Companies of California, The Lee Group, Inc. and community from childhood to retirement,” says the Housing Authority of the City of Los Angeles, Donald Carter, president of Urban Design Pueblo del Sol marked a turning point in the his- Associates (UDA) in Pittsburgh, Pa. “They are a toric east Los Angeles neighborhood of Boyle historic American tradition and a democratic treas- Heights. Previously occupied by the Aliso Village ure. They work.” public housing complex, the That passionate philosophy has played out in site had deteriorated two UDA projects in particular. Pittsburgh’s beyond repair. Pueblo del Crawford Square is one of many steps toward Sol now offers an attractive rebuilding Pittsburgh’s Lower Hill District. A suc- mixed-income community cessful rebuilding of a residential neighborhood, consisting of 377 rental Crawford Square is a low-income housing tax cred- units and 93 home owner- it project that is 50 percent tax credit and 50 per- ship units. On the rental cent market rate. Even though more than 50 per- side, 60 percent is public cent of the units are subsidized, no visual distinc- housing; 40 percent falls tion is apparent in either the architecture or the under the tax credit and character of the neighborhood. A total of 500 units affordable housing umbrel- of mixed-income housing have been built here, la. On the housing for-sale including a mix of rental and for-sale units, with a front, 70 percent is market wide range of prices. rate and 30 percent is pub- In Louisville, Ky., the Park DuValle neighbor- lic. The neighborhood also hood is an even more visually arresting story. Once includes two community dominated by 1,100 public housing units, vacant centers, plus proximity to an land and abandoned houses, Park DuValle has elementary school and a become a stable, mixed-income community. A total future MTA Gold Line (light of 513 units of mixed-income/mixed-finance rental rail) stop and a proposed units and 341 home ownership units have been Capitol Hill, Washington, D.C. built or are under construction. new high school. 28 ON COMMON GROUND WINTER 2007
  22. 22. Capitol Hill, Washington, D.C. Park DuValle has attracted a wide range of income levels. Market-rate units are immediately adjacent to rental houses, with a high percentage of low- and very-low-income families. But most importantly, the development has changed the image of the larger area in which it is located, from one of abandonment and decay to that of a vital and desirable neighborhood. As a result, adjacent neighborhoods are experiencing revitalization, and, for the first time in generations, new retail and community services are being attracted to the area. This kind of success doesn’t just happen, says Carter. “A mixed-income project requires multiple sources of financing, including traditional bank financing, tax credits, state housing loans, and phil- anthropic grants and loans. In terms of management, They [mixed-income the two principal concerns are high-level mainte- nance of the property and screening of residents.” neighborhoods] are a Transforming the troublemakers historic American tradition Allequippa Terrace was Pittsburgh’s largest and and a democratic treasure. most troubled housing project. Its original 1,799 units were one-third vacant, physically deteriorat- The Townhomes on Capitol Hill vary from two to ing and crime-ridden. Enter Corcoran Jennison four stories, which maintains architectural consis- Companies (CJC), a Boston-based developer that tency with the range of building dimensions in the partnered with Beacon Companies and the Capitol Hill Historic District. And the project, Allequippa Terrace Resident Council to redevelop designed by Weinstein & Associates architectural the community. The result: Oak Hill, which firm, based in Washington, D.C., looks as good as it includes mixed-income family rental housing and a lives. Its handsome brick facades earned it the major reconfiguration of the street plan, which American Institute of Architects’ Honor Award for opens the community to the surrounding neighbor- Urban Design Excellence and the Urban Land hood. Additional off-site home ownership opportu- Institute Award for Excellence. nities for residents help to reinforce the city’s efforts to stabilize neighboring communities by improving The final measure the existing housing stock for occupancy. Presently, the promise of mixed-income housing Funded in part by a HOPE VI grant, the city of has not yet been fully realized. We don’t know Pittsburgh, low-income housing tax credits and the beyond a reasonable doubt how much better design Urban Redevelopment Authority of Pittsburgh, the and integrated price points contribute toward 82-acre project will offer 816 rental units and 275 improved behavior, interpersonal connectivity and home ownership units at its completion. By the end upwardly mobile economic positions in life. of 2006, a new community center will be complet- However, urbanism is not a quick fix. Often, it ed in cooperation with the Pittsburgh Housing can take decades to plot a new course and steer in Authority. a new direction the massive machinery of develop- In Washington, D.C., CJC transformed the for- ment and social detriments it sometimes brought. mer Ellen Wilson public housing project into 134 After all, it took decades to get it moving on its cur- limited-equity, cooperative residential units called rent course. Still, having seen and experienced The Townhomes on Capitol Hill. Located in the his- what the first attempts at public housing have toric neighborhood of Capitol Hill, the Ellen Wilson engendered, revisiting a mixed-income model of project was condemned in 1988. In 1991, a group of development seems the wisest approach, one that neighbors and business people formed the Ellen will help to reintroduce an element that has been in Wilson Community Development Corporation and short supply in low-income housing projects for began the site’s redevelopment in 1997. With $26 decades: hope. million of HOPE VI grant money, CJC undertook the project as development advisor and handled Jason Miller is a freelance writer, editor and publishing the construction, marketing and management of consultant based in Concrete, Washington. the community. WINTER 2007 ON COMMON GROUND 29
  23. 23. Pros W orking as a firefighter, school teacher, retail salesperson or entry-level professional has never been considered dishonorable in America. Wanting to live in a healthy community with access to the best jobs, schools, cultural activities, transit and more has always been viewed as a worthy pursuit in this nation. VS. But with a vast number of jobs offering middle to low wages and a great amount of new housing being built in price ranges reachable by only the middle and upper class, the gap between workforce wages and desirable neighbor- hood affordability is widening each day. From large urban centers to new growth areas, the police officer and the other backbones of the workforce cannot begin to dream of buying even a one bedroom condo or a small cottage. To try to level the playing field, hundreds of cities have created inclusionary zoning (also known as inclusionary housing) as a way to create a percentage of affordable units intermingled with the market-rate units and their skyrock- eting price points. Inclusionary zoning has dozens of forms, but most typi- cally a development with a certain threshold of units—often 10 or more—is required to offer affordable units—usually 15 percent—to households earning roughly between 60 to 120 percent of the area median income. CONS Smart Growth experts debate inclusionary zoning strategies in an effort to win diverse affordable neighborhoods By Steve Wright 30 ON COMMON GROUND WINTER 2007 WINTER 2007 ON COMMON GROUND 31
  24. 24. Sacramento, California Inclusionary zoning is the means to preserving a healthy mix of diverse incomes, ethnicities and workforces. Quite often, such mandatory inclusionary hous- than approximately 11,000 affordable units since its ing requirements come along with developer program began in 1974.” incentives such as increased density, expedited Derek Camunez, president elect of the Denver permitting and reduced or waived inspection fees. Board of REALTORS®, is not sure inclusionary zon- To some, inclusionary zoning is the means to ing mandates are addressing the affordable hous- preserving a healthy mix of diverse incomes, eth- ing problem. nicities and workforces in increasingly pricey “We believe that mandating affordable housing municipalities. is not nearly as effective as providing builder To others, inclusionary zoning is an impediment incentives such as tax breaks, creative zoning for to growth, an interference with the free market and higher densities and speeding up the permitting an exceedingly expensive cost-per-unit way of inte- process for providing access to affordable housing,” grating lower incomes into high land-value areas. he said. Susannah Levine and Adam Gross of Chicago’s “Denver’s annual report on the inclusionary Business and Professional People for the Public Building Ordinance is finding that the affordable Interest believe in the power of inclusionary hous- housing stock is not significantly increasing. ing. Moreover, the city is discovering that they are not “Inclusionary housing is an extraordinarily effec- getting the desired cross-cultural families taking tive and efficient way for cities to create affordable advantage of this housing stock that they had housing,” they said. Author, consultant, former mayor hoped.” of Albuquerque David Rusk has calculated that if the Thomas M. Menino, serving his fourth term as 100 largest metropolitan areas in the United States mayor of Boston, believes inclusionary zoning is had adopted typical inclusionary housing programs working in his historic, densely-developed and (a 15 percent set-aside on 10 or more units), between very pricey city. Since 2000, Boston has used inclu- 1980 and 2000 those 100 programs would have pro- sionary zoning to foster economic diversity through duced 2.6 million affordable units. That’s almost affordable housing. twice as many units as were built using the most pro- “Neighborhoods accept them well and they are ductive federal affordable housing program, the Low well scattered about,” Geoffrey Lewis, a project Income Housing Tax Credit. Montgomery County, manager with the Boston Redevelopment Authority, Md., which has the longest-running inclusionary said of market-rate buyers’ willingness to have housing program in the country, has created more affordable units created next to them. 32 ON COMMON GROUND WINTER 2007
  25. 25. City leaders realize a strong middle class is going to be important to the continued vitality of Boston. “Our mayor wanted economic diversity through- In Sacramento, where the percentage of afford- out the neighborhoods,” he added. “They (city able homes fell from a high of 70 percent to a recent leaders) realize a strong middle class is going to be rock-bottom low of less than 10, inclusionary zoning important to the continued vitality of Boston. The is applauded. Desmond Parrington, a planner with political leadership has been very strong. It under- the city of Sacramento, said nearly 2,000 affordable stands that if we don’t get housing costs under con- houses and rental units have been created through trol, it will be detrimental to our economy.” the capital city’s inclusionary legislation. Lewis cautioned that inclusionary zoning The city’s Mixed Income Ordinance, created in requires a strong housing market to make it work, 2000, seeks to “prevent segregated communities noting “if the market isn’t strong, developers will through economic integration.” It also “aims to look at inclusionary as the thing that’s killing the provide affordable housing that fits the character of project.” market-rate neighborhoods.” The ordinance In Housing Supply and Affordability: “Do Affordable Housing Mandates Work?” published by the Reason Public Policy Institute and funded by a grant from the Home Builders Association of Northern California, researchers Benjamin Powell and Edward Stringham found data that suggests inclusionary zoning is a failure in Northern California because it: • Produces few units. “The 50 Bay area cities with inclusionary zoning have produced fewer than 7,000 units.” • Has high costs. “The total cost for all inclu- sionary units in the Bay area to date (is) $2.2 billion.” • Makes market-priced homes more expensive. “In high market-rate cities … inclusionary zoning adds more than $100,000 to the price of each new home.” • Restricts the supply of new homes. “In the 33 cities with data for seven years prior and seven years following inclusionary zoning, 10,662 fewer homes were produced during the seven years after the adoption of inclusionary zoning.” • Costs government revenue. “The total present value of lost government revenue due to Bay area inclusionary zoning ordinances is upwards of $553 million.” Although some builders and researchers are skeptical of inclu- sionary zoning’s impact on the free market, more cities are enacting inclusionary ordinances each year. While the San Francisco Bay area homebuilders are chafing at the affordable housing requirements, another urban center in California is Hollywood Palms, championing its inclusionary San Diego, California housing model. WINTER 2007 ON COMMON GROUND 33
  26. 26. The program has been successful at creating new mixed-income communities. requires that “The biggest pitfall is pushing income limits any new resi- down too low,” McIlwain said. “The advice I can dential devel- give is [to use inclusionary zoning] for working opment of 10 people, the workforce earning 80 to 100 percent of or more units area median income. Some other program can then include an be created to address affordable housing needs of affordable people below 80 percent of median income.” component. Most experts agree that it is more difficult to “[The pro- make inclusionary housing work in dense urban gram] has areas that are mostly built out. If the city is desir- been success- able and rapidly redeveloping, the premium on ful at creating buildable land drives the price up so high that it is new mixed- very difficult to squeeze in affordable housing. If income communities that might not otherwise be the city is stagnant or perceived as undesirable, created when new housing is built, due to the high any additional requirements, such as inclusionary price of land and construction costs in California,” zoning, may serve as a deterrent to much-needed Parrington reported. urban reinvestment. “It ensures that there are lower-income units Inclusionary requirements work best in new that are part of market-rate developments and that urban growth areas, producing the success stories those units are built concurrently with the rest of of Montgomery County, Md., and more recently, in the project.” Southern California. John McIlwain, a senior fellow at the Urban In San Diego, a voter-approved initiative made Land Institute, believes inclusionary zoning is a affordable housing a big part of the development piece of the puzzle, but not the complete solution. plan for the urban growth area to the north of the He agrees with homebuilders that more affordable core city. In that low-rise growth area, which start- housing is created through density bonuses than ed being developed in 2003, 20 percent of the hous- strict inclusionary requirements alone. ing must be affordable. “It won’t produce the amount of affordable hous- Todd Philips, director of the San Diego Housing ing that’s needed by a long shot, but it’s still a very Commission’s Policy and Public Affairs valuable tool if it’s done right,” he said of inclusion- Department, said the inclusionary zoning program ary zoning. for the north growth area has created nearly 1,000 McIlwain said cities start with the premise that affordable units and has a goal of creating another inclusionary zoning will provide affordable hous- 1,000 before build out is completed. ing without hurting the market. He said that is true in two circumstances: 1. A market so strong, that inclusionary housing can be imposed on developers and they will still make a lot of money. 2. The more likely scenario that the city gives developers something in return to offset the loss of profits associated with selling units below market price. “In most cases, bonus density is the key. That’s one way a city can do it without spending money,” he said. McIlwain said because high-rise condominiums are so expensive to build, it is often difficult to create affordable units within them. He also cautioned that a low-income family will not be able to keep up with the high monthly fees levied by high-rise condos. Rancho Del Norte, 34 ON COMMON GROUND WINTER 2007 San Diego, California