Presentación Nico Calavita


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Presentación Nico Calavita

  1. 1. Politicas que promueven la integracion residencial urbana: El caso de Estados Unidos y Europa Santiago de Chile, Jueves 11 de Septiembre Nico Calavita, Professor Graduate Program in City Planning San Diego State University
  2. 2. I - Inclusionary Housing in the US <ul><li>II - Inclusionary Housing in Europe </li></ul><ul><li>III - Residential integration </li></ul><ul><li>IV - Concluding remarks </li></ul>
  3. 3. I - Inclusionary Housing in the US <ul><li>What is IH? Linkage Fees? </li></ul><ul><li>Origins and evolution </li></ul><ul><li>Characteristics </li></ul><ul><li>IH cost-offsets and land value recapture </li></ul>
  4. 4. What is Inclusionary Housing ? <ul><li>Inclusionary Housing (also called Inclusionary Zoning) is any program that uses the local zoning authority or the development approval process to require or encourage the inclusion of affordable housing in market-rate residential development </li></ul><ul><li>IH not only produces affordable housing, but also fosters socially integrated communities </li></ul><ul><li>IH programs can be mandatory or voluntary </li></ul>
  5. 5. What are Linkage Fees? Linkage Fees are paid by developers of non-residential development to build affordable housing They are called linkage fees because of the link between a new hotel, a winery, etc., and the hiring of new workers at wages that make it impossible for them to afford market-rate housing
  6. 6. Origins and Evolution <ul><li>What are the origins of IH and how has it evolved? </li></ul><ul><li>Multiple strands, mostly traceable to the turmoil of the 1960s and early 1970s </li></ul>
  7. 7. 1960s - Civil rights movement Riots in major American cities <ul><li>1968 Kerner Commission “...two separate societies…”  Challenge to Segregation </li></ul><ul><li>Exclusionary Housing  Paul Davidoff Suburban Action Institute </li></ul><ul><li>Legal challenges </li></ul>Outcome: Efforts to foster socioeconomic integration
  8. 8. Environmental Movement Questioning of the idea that growth is good, that growth is inevitable Emphasis on Quality of Life Outcome: Growth management and expansion of exactions to make developers pay for the costs of growth
  9. 9. Exactions and Development Impact Fees (DIFs) Exactions: Exactions are payments made by a developer to local governments for the right to develop to offset the impacts of development Exactions can include Development Impact Fees, the dedication of land for public facilities, linkage fees, etc.
  10. 10. Decline in Federal funding for affordable housing in the 1970s and 1980s Outcome: States & localities are left to fend for themselves to provide affordable housing
  11. 11. Affordability Problems During the late 1970s interest rates exploded and housing prices rose much faster than incomes, especially in places such as California and the Washington, D.C. metropolitan area Outcome: Interest in IH as a mechanism to produce affordable housing
  12. 12. In summary: 1) growth management and concern for QOL legitimized higher levels and new forms of &quot;exactions;&quot; 2) housing cost crises at the same time that the Federal government practically eliminated affordable housing programs forced lower levels of government to intervene and; 3) exclusionary zoning practices and failure of efforts to foster socioeconomic integration pointed to the need for new approaches All these factors combined to give impetus to IH in the 1970s
  13. 13. Evolution IH spread quickly to counties surrounding the Washington metropolitan area and to many localities in the State of California, areas with serious affordability problems; <ul><li>and to the state of New Jersey, as a result of court decisions that declared that zoning was being used to exclude (through large lot zoning) lower-income households and protect property values </li></ul>
  14. 14. The New Jersey Supreme Court declared that <ul><li>each municipality should provide their regional fair-share of affordable housing </li></ul><ul><li>Over 10,000 Affordable Homes produced </li></ul>
  15. 15. What are the recent trends in IH? <ul><li>Real estate boom of the 2000s </li></ul><ul><li>Housing cost crises, especially in coastal areas </li></ul><ul><li>Outcome: Increasing numbers of IH programs in many parts of the country </li></ul>
  16. 16. Smart Growth, New Interest in Urban Living Emphasis on densification, infill and redevelopment of already urbanized areas IH from the suburbs expands to the cities
  17. 17. IH is being applied not only to new development, but also to existing buildings when Condo Conversions occur With condo conversions existing (many times affordable) rental apartments are converted into ownership (condominium) units Affordable housing is lost
  18. 18. Emphasis on redevelopment, &quot;infill&quot; and densification can lead to gentrification In redevelopment areas IH can become an important mechanism to insure that at least a small percentage of the units remain affordable to low-income households. Outcome: IH as a tool for fostering mixed-income communities in the suburbs acquires new importance in urban areas
  19. 19. Inclusionary Housing Programs and Production… <ul><li>California </li></ul><ul><ul><li>170 Programs Statewide </li></ul></ul><ul><ul><li>34,000 Affordable Homes produced by about 34 programs between 1974 and 2004 </li></ul></ul><ul><ul><li>Over 29,000 Affordable Homes Produced by IH in California Since 1999 </li></ul></ul><ul><li>D.C. Metro Area (Big Box Counties) </li></ul><ul><ul><li>15,000 Affordable Homes produced by 4 programs between 1974 and 2004 </li></ul></ul><ul><ul><li>More than 5 programs now and growing (including D.C. itself) </li></ul></ul><ul><li>Massachusetts </li></ul><ul><ul><li>Over 118 local IH programs as of 2002 </li></ul></ul><ul><ul><li>Over 25,000 Affordable Homes produced by Chapter 40B over 30 years </li></ul></ul><ul><li>New Jersey </li></ul><ul><ul><li>Over 250 “de facto” programs </li></ul></ul><ul><ul><li>Over 10,000 Affordable Homes produced between 1985-2000 from local IH </li></ul></ul>
  20. 20. Characteristics of IH Programs <ul><li>IH programs share the following characteristics: </li></ul><ul><li>Inclusionary percentage or set-aside requirements </li></ul><ul><li>Income targets </li></ul><ul><li>Alternative compliance </li></ul><ul><li>Length of affordability </li></ul><ul><li>Incentives or cost-offsets </li></ul>
  21. 21. I NCLUSIONARY PERCENTAGE IH programs require that a percentage of the units in a development be affordable. Generally the requirements vary between 10 and 20 percent with the most frequent inclusionary percentage being 10 percent . <ul><li>INCOME TARGETING </li></ul><ul><li>IH programs require that inclusionary homes be targeted to one or more pre-determined income groups. Rental units are targeted most frequently to low-income households (earning 51-80 percent of Area Median Income - AMI), while for-sale units are most frequently targeted to moderate-income households </li></ul>
  22. 22. LENGTH OF AFFORDABILITY How long before the housing units are allowed to return to the market? <ul><li>ALTERNATIVE COMPLIANCE/FLEXIBILITY </li></ul><ul><li>Programs typically offer developers one or more alternatives to constructing affordable units within the market-rate project. Most common are “in-lieu fees,” allowing a developer to pay a fee instead of building the units </li></ul><ul><li>Developers treasure flexibility in meeting their requirements. Many programs allow developers to construct affordable units off-site or to build units different from those in the development. </li></ul>
  23. 23. La Costa Paloma, Carlsbad California
  24. 24. <ul><li>Montgomery County, Maryland </li></ul><ul><li>The building on the left contains four IH units </li></ul>
  25. 25. <ul><li>Fairfax County, Virginia </li></ul><ul><li>The building on the left contains four IH units </li></ul>
  26. 26. DEVELOPER INCENTIVES <ul><li>Typically local governments provide the private sector with a variety of incentives to offset the cost of providing affordable housing. These may include: </li></ul><ul><li>density increases (“density bonuses”) </li></ul><ul><li>impact fee waivers or deferral </li></ul><ul><li>fast-track permit approval </li></ul><ul><li>lower parking requirements </li></ul><ul><li>the relaxation of one or more design restrictions such as reduced street widths and setbacks, or other regulatory concessions </li></ul><ul><li>favorable financing may be made available </li></ul>
  27. 27. IH cost-offsets and land value recapture <ul><li>Are incentives and cost-offsets really necessary? </li></ul><ul><li>It should be remembered that practically all these incentives come at a public cost . For example: </li></ul><ul><li>DIFs waivers, reductions or deferrals </li></ul><ul><li>Density bonuses. They have the potential to be both the most attractive to the developers and the most damaging to the public at large </li></ul>
  28. 28. Density bonuses have been criticized because they: <ul><li>Invalidate existing regulations </li></ul><ul><li>2) Are likely to lower the level of service of public facilities and infrastructure </li></ul><ul><li>3) Stifle citizen participation </li></ul>
  29. 29. Is there an alternative? <ul><li>Yes, you can get IH out of rising </li></ul><ul><li>land values, out of: </li></ul><ul><li>Plusvalias </li></ul><ul><li>Plusvalias are increases in land value resulting from public actions, such as rezonings or construction of public facilities </li></ul>
  30. 30. Plusvalias are generally considered unearned or undeserved. Why? <ul><li>It is, therefore, “socially desirable to capture all or part of the increased value for the public sector” (Martin Smolka and Fernanda Furtado, “Mobilizing Land Value Increments for Urban Development: Learning from the Latin America Experience” - 2002) </li></ul>
  31. 31. It seems then that there are two different choices in dealing with the costs of IH <ul><li>IH with cost-offsets and incentives </li></ul><ul><li>(the public pays) </li></ul><ul><li>IH as a land value recapture mechanism when applied at the time of rezonings </li></ul><ul><li>(the landowner pays) </li></ul><ul><li>Let’s look at how European countries have approached this issue </li></ul>
  32. 32. II - Inclusionary Housing in Europe <ul><li>Why 20 years after the US? </li></ul><ul><li>Ireland </li></ul><ul><li>Spain </li></ul><ul><li>England </li></ul><ul><li>Residential integration </li></ul>
  33. 33. IH is booming <ul><li>IH started in the U.S. in the 1970s, but it spread to Europe and Canada in the 1990s and 2000s; </li></ul><ul><li>and also to such far-flung places as India, South Africa, New Zealand and Australia. </li></ul><ul><li>The global spread of IH reflects a larger policy shift under which governments increasingly look to developers to shoulder the wider societal costs of development. </li></ul>
  34. 34. To analyze these new approaches in Europe (Italy, Spain, France, Great Britain, Ireland) and Canada and compare them with those in the U.S., Alan Mallach and I are conducting comparative research with the support of the Lincoln Institute of Land Policy
  35. 35. A trend initiated only about ten/fifteen years ago Why? <ul><li>Counterintuitive </li></ul><ul><li>We would expect more government intervention in Europe </li></ul>
  36. 36. Enter privatism and the retrenchment of the public sector <ul><li>Reduction in public expenditures </li></ul><ul><li>Cutbacks in social housing programs </li></ul><ul><li>Devolution </li></ul><ul><li>Market-based solutions </li></ul>
  37. 37. Planning and regulation <ul><li>IH: “Getting housing through the planning system” </li></ul><ul><li>In the past, planning and affordable housing provision were separate (generally) </li></ul><ul><li>Housing Associations/nonprofits/local councils competed with the private sector for developable land </li></ul><ul><li>With IH, instead, the private developer provides the land, the housing or money </li></ul>
  38. 38. IRELAND <ul><li>LATE 1990s: Housing crisis of huge proportion </li></ul><ul><li>POLITICAL RESPONSE </li></ul><ul><li>Part V of the Planning and Development Act , 2000 </li></ul><ul><li>It allowed that a specified percentage (not more than 20%) of land zoned for residential and other uses, be transferred at existing use value to the local authority for social and affordable housing production. </li></ul>
  39. 39. “ It represents a community and planning gain or return against the windfall profits arising from the development of land” (Brooke, 2005. Building for Inclusion? Housing Output and Part V of the Irish Planning and Development System) <ul><li>It was immediately referred by the President of Ireland to the Supreme Court under the provisions of Article 26 of the Constitution of Ireland (1937) </li></ul><ul><li>Is Part V constitutional? </li></ul>
  40. 40. YES <ul><li>The Court accepted the concept of “betterment” (The Great Britain term for plusvalias ) </li></ul><ul><li>“… The owner may be required to cede some part of the enhanced value of the land deriving both from its zoning…and the grant of planning permission…” </li></ul>
  41. 41. SPAIN <ul><li>Art. 47 of the Spanish Constitution: </li></ul><ul><li>“ All Spaniards have the right to enjoy decent and adequate housing…The community shall share in the increased values generated by urban planning policies of public bodies.” </li></ul>
  42. 42. Spain Housing costs skyrocketed late 1990s/early 2000 Housing speculation - Second homes Rapid influx of migrants, especially in Catalunia Higher job mobility, but lack of rental housing
  43. 43. Autonomous regions intervention - IH adopted in <ul><li>95 Basque </li></ul><ul><li>97 Madrid </li></ul><ul><li>99 Castillia Leon </li></ul><ul><li>02/04 Catalunia </li></ul>
  44. 44. Very similar programs <ul><li>They require that a certain percentage of the developable square meters of a project be dedicated to officially protected housing ( VPOs ), and a smaller percentage to controlled-price housing </li></ul>
  45. 45. Basque region with the highest % <ul><li>In urbanizing areas 70% (60 and 10) </li></ul><ul><li>Catalunia: 20% and 10% </li></ul><ul><li>These percentages are minimums </li></ul>
  46. 46. National -- Law 8, 2007 (Ley del Suelo) <ul><ul><ul><li>Allocates a minimum of 30% of the square meters designated for residential development in the urban development plans to a land reserve dedicated to a VPO housing regime; i.e., non-market housing </li></ul></ul></ul>
  47. 47. ENGLAND <ul><li>Basis for IH in England: </li></ul><ul><li>Nationalization of development rights under Town and County Planning Act (1947). </li></ul><ul><ul><li>“ Betterment” – increase in land value resulting from public action belongs to public </li></ul></ul><ul><li>Section 106 of the 1990 Town and Country Planning Act </li></ul><ul><ul><li>“ planning gain” - developer can be required to provide affordable housing under agreement with local authority </li></ul></ul>
  48. 48. <ul><li>IH process in England: </li></ul><ul><li>Local authority adopts general rules in LDF </li></ul><ul><li>Local authority and developer negotiate Sec. 106 agreement (may include participation of Housing Association and landowner) </li></ul><ul><li>Developer builds housing and/or makes financial contribution </li></ul><ul><li>(Rental housing) on completion, Housing Association buys units at price set in agreement and maintains as social rental housing </li></ul><ul><li>(Ownership housing) on completion, units sold to qualifying home buyers. </li></ul>
  49. 49. … Landowner expected to absorb (some part of) costs of social housing <ul><li>From Total and Law , the newsletter of the law firm of Thompson, Snell and Passmore, discussing planning obligations (exactions) and Section 106 requirements: </li></ul><ul><li>“ As inevitably, it falls to the landowner to fund these provisions by reduction of the sale price, there is often lengthy and sometimes acrimonious discussion as to the need and the amount of the provisions” (September 2004) </li></ul>
  50. 50. III - Europa & integracion residencial urbana <ul><li>“ Levels of segregation - racial, ethnic, and socio-economic - are generally lower in cities in European countries than in cities in the U.S.” (Sako Musterd, University of Amsterdam: “Social and Ethnic Segregation in Europe: Levels, Causes, and Effects” Journal of Urban Affairs) </li></ul>
  51. 51. Nonetheless <ul><li>Attention to integration problems, or to use the European term, “social exclusion,” arose about 20 years ago as a result of concerns over the effect of economic restructuring, globalization and immigration </li></ul>
  52. 52. <ul><li>Social exclusion is a multidimensional concept that forces policy-makers to go beyond the provision of income security, and to address social exclusion in several domains and different levels </li></ul><ul><li>Including the spatial </li></ul>
  53. 53. ALL countries analyzed attach great importance to IH as a mechanism to foster socio-economic integration, <ul><li>or “Social Cohesion” (Catalunia) or “Mixite’ Social” (France, Montreal - Canada), “Mixed-Tenure” (Ireland); “Mixed and Inclusive Communities” (England) with various degrees of enthusiasm, commitment & effectiveness </li></ul>
  54. 54. IV - Concluding thoughts <ul><li>IH has become an important mechanism for the provision of affordable housing in Europe </li></ul><ul><li>With the exception of France, all countries look at IH as a land value recapture mechanism </li></ul><ul><li>While the ways in which IH is applied vary, all countries view IH as a tool for fostering social inclusion </li></ul>