Affordable Housing, Community Development, Reports and Publications

Inclusionary Housing Policies Survived through Housing Downturn

Center for Housing Policy

Despite the housing downturn, inclusionary housing policies throughout America remain fairly strong according to a new report from the Center for Housing Policy. The report, After the Downturn: New Challenges and Opportunities for Inclusionary Housing, released in February 2013, defines inclusionary housing as “policies that either require developers to offer lower-priced units in otherwise market rate developments, or encourage their inclusion through incentives.”

Inclusionary housing (IH) is one of many tools used to create affordable housing in towns and cities but it has the advantage of creating affordable housing in areas with lower poverty rates when compared to many state and federal housing programs. Being located in areas with lower poverty rates has been correlated with higher performing schools. In addition, IH is a tool that can be used to create affordable housing without the need for public subsidies. These reasons contributed to the increased popularity of IH in the early 2000’s when housing prices skyrocketed. Since the downturn of the housing market most IH policies are still in place.

According to the report, of the 400 or so mandatory inclusionary policies that were in place in 2007, only 8 have been discontinued. The author postulates that the resilience of the IH programs is due to the fact that most of those policies are based in areas with relatively strong housing markets and with strong local constituencies that provide additional support during weak economic times. While few IH programs were discontinued, there has been little IH production since the downturn.

Going forward the author lists 8 challenges to Inclusionary Housing Policies:

  1. The growing difficulty of applying inclusionary housing to rental properties.
  2. The elimination of redevelopment in California undermined many inclusionary housing policies.
  3. New inclusionary housing policies have become harder to pass.
  4. As development continues to shift toward infill settings, policies written for Greenfield developments may need adjusting.
  5. Rising homeownership association and condominium fees
  6. Many policies will need to be more creative to serve very low and extremely low income households.
  7. It may get harder to support inclusion through in lieu fees.
  8. It is still difficult to sell inclusionary ownership units in some places.

Click here to read the full report After the Downturn: New Challenges and Opportunities for Inclusionary Housing 


Filter News By