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HomeMy WebLinkAboutSubmittal-Daniella Levine StatementMy name is Robert Diznoff, with the Human Services Coalition, located at 260 NE 17th Terrace. I'd like to read the following on behalf of HSC CEO Daniella Levine, who regrets that she cannot be here today. Daniella Levine Statement to Miami City Commission on Miami 21 Thursday, June 28, 2005 HSC absolutely agrees with the main premise of Miami 21 — that we need better planning, walkable streets, mixed-use communities, and a more uniform zoning and permitting system. These factors all undoubtedly do lead to a more vibrant civic life in a city such as Miami. But if these are the only real changes to Miami's civic and social life brought about by Miami 21, then we will be missing a huge opportunity to address some of our city's more urgent social problems. As you all know, Miami 21 creates a Public Benefits Program, in which large projects may purchase more build -able space by building parks or affordable housing, or contributing to the Public Benefits Trust Fund. This replaces the current bonus density program, under which all of the money goes into the Affordable Housing Trust Fund. And although the Mayor and this Commission have done a commendable job in building affordable housing over the last several years, I'm afraid we're still a long ways away from being able to house our workforce safely and affordably. According to the Shimberg Center for Affordable Housing, which the Department of Community Development uses for its planning purposes, in 2005 there were almost 27,000 households in Miami that were paying more than half their incomes on housing, and so needed some kind of assistance. There is no way we are going to be able to meet that need without implementing a much more aggressive policy to build new affordable housing. Let's think more creatively. Why not require that all residential projects over a certain size — say 15 units, for example — make a certain portion of their units available to low- or middle-income households? Miami 21 already requires that medium -to -large -size buildings contribute to the environment by meeting green building standards; why not make sure they also contribute to the long-term economic viability of the city, by contributing units to affordable housing? Cities across the country have used this kind of inclusionary zoning to attract and maintain a viable, vibrant working class in the midst of escalating home prices. There's no reason Miami could not do the same — indeed, it is one of the policies recommended in the City's Comprehensive Plan for Affordable Housing. Miamians need and deserve decent, affordable housing in addition to a livable, green city with effective planning. Miami 21 creates the opportunity to make both happen: a beautiful, efficient, green physical space supported by the diverse, inclusive society that will ensure its long-term success. I urge you to heed the Planning Advisory Board's call to "strengthen the affordable housing component" of Miami 21 before passing it. I'm handing out some documents that can provide more details as to how. SUBMITTED INTO THE PUBLIC RECORD FOR ?`MPza ON 6as. o9 . Miami 21 Talking Points We are in a housing crisis • The City's consolidated plan states that HALF of all Miamians qualify for housing assistance based on income alone. We are the most cost -burdened city in the country. • The City has done a lot in the last several years to create and maintain affordable housing, but if a much more aggressive policy is not enacted, we will always have a need that far outweighs the supply. Miami 21 presents a great opportunity • If we are going to plan our city for the next 100 years, how can housing workers not be a huge part of the plan? • The motto of Miami 21 is "your city, your plan." My plan includes a place for me to live. • The goals of Miami 21 are great, but they're incomplete. They mention "economic inclusion," but how can we include people of different incomes if they have no place to live? • All the economic analyses of Miami 21 talk about the need for affordable housing as an integral part of economic development. • There is no silver bullet to fix the housing crisis, but strengthening the affordable housing portion of Miami 21 will go a long way towards making a difference. Mandatory Inclusionary Zoning is ZONING POLICY that is very effective in creating affordable housing • All residential projects over a certain size (e.g. 15 units) and/or residential projects built anywhere that's been up -zoned, MUST make a certain portion of those units affordable to low- and moderate -income households. • The units can be built off-site, or in -lieu payments may be made into a fund, BUT the best outcome is that the units get built on-site. • Mixed -income communities are the most effective way to fight crime, raise test scores, and provide a lot of affordable and workforce housing to a community that desperately needs it. Public Benefits Funds need Public Oversight • Money changes hands a lot of times in the current Miami 21 plan: first from developer to PBTF, then to AHTF or Parks Fund, then to whoever is going to develop the park or affordable housing. • The only one of these three boards that currently has an oversight structure is the AHTF, through the Housing and Commercial Loan Committee. • The PBTF should have a community oversight board that oversees the expenditures of ALL monies that originate in the PBTF. A portion of Public Benefit Funds should be earmarked to be spent on affordable housing. • The City's current bonus density program pays ALL funds into the Affordable Housing Trust Fund. Therefore, the structure of the public benefits fund under Miami 21 represents a NEW SOURCE OF FUNDING for parks. • According to the Planning Department's estimate, payments into the AHTF last year in exchange for bonus density totaled $8.5 million. Undert�►�i�I�i�TO THE PUBLIC RECORD FOR TEMrz> ON OAlo-- Program, those projects would have contributed $18.9 million for the same amount of bonus square footage. • The current payment structure — ALL OF WHICH GOES INTO THE AHTF — represents about 45% of what the payments will be for similar amounts of space under Miami 21. • In order to get MORE MONEY FOR AFFORDABLE HOUSING, Commissioners should dedicate at least 70% of PBTF to affordable housing every year — leaving the other 30% as a NEW SOURCE OF REVENUE for parks. SUBMITTED INTO THE PUBLIC RECORD FOR ITEM?2.-,�- ON 41,)-slo� . . ....... .. .. . ....... .. Dow Aftrdabb Hmft Sqpoftm, =lm t 17. -c' lz'� =-,,, f j'x.L ft, ilt' "� P�t 7. It , fIV Nil shcomly, =770377L 7177 F. -T717 F,777, SUBMITTED INTO THE PUBLIC RECORD FOR KEY PRINCIPLES OF INCLUSIONARY HOUSING ITEC nfVl F .->- ON (oog d) . In its most basic terms, inclusionary housing requires or encourages market -rate housing developments to include a percentage (usually 10 to 20 percent) of homes affordable to lower- and moderate -income households. Inclusionary poli- cies take the form of either a local ordinance, a General Plan policy, or a permit approvals process that requires or rewards affordable housing projects. While NPH and HBANC hold differing views on the merits of inclusionary housing, the following are key principles upon which our organizations agree: • Providing an adequate supply of housing is a societal responsibility. • Local communities with inclusionary housing programs have a responsibility to contribute tangible and substantial resources so that the cost of providing affordable housing is spread fairly across the community. • Affordable housing policies that maximize resources by providing more hous- ing opportunities or deeper levels of affordability at the same or less cost should be encouraged. • Traditional inclusionary housing policies that require the development of "like - for -like" units distributed uniformly throughout the market -rate development are often not the most effective or efficient way of providing affordable housing. • To increase effectiveness and efficiency, inclusionary housing programs should provide flexibility and allow a range of alternative methods of providing affordable units. RECOMMENDATIONS FOR JURISDICTIONS WITH INCLUSIONARY HOUSING PROGRAMS Market -rate builders should be provided with a choice of several options for producing the affordable homes. The builder should not be required to demonstrate the financial infeasibility of traditional inclusionary requirements in order to use one of these options and, so long as the relevant criteria for a particular option are met, the builder should not be required to obtain approval by the local jurisdiction on a case-by-case basis. HOUSING TYPE AND DESIGN FLEXIBILITY Market -rate builders should be able to satisfy an inclusionary requirement by providing alternative for -sale housing types, such as duets, townhouses, or condominiums. Builders should have the option of clustering the units onsite or building offsite (see Offsite Construction, page 4). Market -rate builders should be able to satisfy an inclusionary requirement by providing rental housing, provided that the project meets the inclusionary percentage and income targets applicable to rental projects. Again, the builder should have the option of clustering the units on the project site or providing for the units offsite (see Offsite Construction, below). LAND DEDICATION Market -rate builders should be able to satisfy an inclusionary requirement by donating land to the local government or a non-profit housing developer, subject to the following: The builder and city should ensure that through an upzoning or density bonus the dedicat- ed site will accommodate more affordable units or units at a deeper affordability level than the inclusionary requirement would have provided; Where rental housing is to be constructed on the dedicated site, the site should accommo- date at least 40 affordable units; If the dedicated site is such that it requires "extra" LAND DEDICATION ATN `�j2Sl ,' construction costs—such as the need to do podium At Corona Ranch in Petaluma, CA, the market -rote builder provided land development or steel construction—in order to accom- to Eden Housing insteod of directly developing the inclusionary homes, modate the required number of units, the market -rate making it possible to create 74 apartments ofirordable to families earning builder should bear the extra cost, including any offsite below 60 percent of area median income ($28,000- $53,000), ogering rents ranging from $427 to $861 per month (1 BR -48R). improvements, environmental remediation or provision of utilities. In most other situations, the land ded itself will satisfy the inclusionary requirement; The dedicated site is located within the same ju tion as the project or within a defined subregion The dedicated site should have all land -use enti ments secured prior to completion of the market units. If the local jurisdiction unreasonably refuses to approve the necessary entitle- ments, the builder should be able to pay in -lieu fees. OFFSITE CONSTRUCTION Market -rate builders should be able to choose to satisfy an inclusionary requirement by pro- viding for the units to be constructed outside the project location, subject to the following: 4 SUBMITTED INTO THE PUBLIC RECORD FOR ITEM Ta -a ON1L. • The offsite location is either comparable to the project site or will result in either greater levels of affordability or a greater number of affordable units than the inclu- sionary requirement would have provided; The affordable units should be developed concurrently with the market -rate homes. POOLING AND CREDIT TRANSFERS • Two or more market -rate builders should be able to pool resources to satisfy their inclusionary requirement through a single affordable housing project; • Market -rate builders that build "extra" affordable housing units (i.e., more than required by the inclusionary ordinance) should be able to use the additional units as credits for meeting future inclusionary requirements in the jurisdiction or a defined subregion; SUBMITTED INTO THE PUBLIC RECORD FOR OFFSITE CONSTRUCTION AT WQM Villa Loma Apartments was made possible because the City of Carlsbad CA allowed the homebuilder to partner with the non-profit BRIDGE Housing to develop the inclusionary homes offsite, but near the market -rate horses. BRIDGE Housing created 1, 2, 3 and 4 bedroom apartments for 344 house -1 holds earning at or below 30 and 60 percent of the area median income. I • Market -rate builders that build "extra" affordable housing units should be able to sell the additional units as credits to other builders in the same jurisdiction or a defined subregion; • The "extra" units should be built before they can be treated as credits; • Non-profit builders should also be able to sell credits to market -rate builders for projects and/or units that are not being funded by the local government. The affordable homes should be entitled before or concurrently with the market -rate development acquiring the credits; • Non-profit builders should be able to acquire and improve existing market -rate develop- ments and restrict future rents to very -low income households and sell the units as credits to other builders in the same jurisdiction or a defined subregion. This option should only be allowed if: a) households served are at or below 50 percent of median income; b) the property undergoes extensive renovations; c) number of units acquired and renovat- ed is at least double that of the standard inclusionary requirement; d) affordability is guaranteed for a period of at least 55 years; and e) tenant relocation is appropriately addressed. 5 IN-[ iEU i`Ee5 kT W9JJ& At Old Elm Village, the City of Petaluma provided non-profit Burbank Housing Development Corporation with financing made possible by in -lieu fees gathered from various market -rate developments. It resulted in deeper affordability than required by the ordinance. Old Elm Village provides 87 affordable homes ranging from studios to 4 -bedroom duplex town - houses for a mix of households earning 30, 40,50,-60, and 70 percent of area median income, affordable to F_ single persons with incomes as low as $13,000 all the way up to families of six with incomes of about $59,000. It incorporates a belt of commercial space and two- thirds of the space is devoted to a subsidized child care facility sery - ing families from Old Elm and the surrounding neighborhood, a IN -LIEU FEES SUBMITTED INTO THE PUBLIC RECORD FOR ITEM�z_> Market -rate builders of projects with 50 units or fewer should be able to choose to satisfy an inclusionary requirement by paying a fee in lieu of directly developing the units. This option should be available to the developer without having to demonstrate that other options are infeasible." RECOMMENDED LOCAL COMMUNITY CONTRIBUTIONS Local governments fulfill a crucial role in the creation of affordable housing. Below are some key actions that local governments should take to demonstrate a broader commitment to addressing the affordable housing shortage. 1. Funding • Make consistent efforts to pass local affordable housing assistance bonds or other meas- ures to meet the existing community's fair share of the burden of providing affordable housing. • Either waive development impact fees and processing fees for inclusionary units or pay for them through discretionary local funds such as redevelopment funds or the general fund. * HBANC and NPN do not have a common position on in lieu fees for projects with more than 50 units. • Where a redevelopment agency exists, increase to at least 50 percent the tax increment devoted to affordable housing programs. (Current law requires a 20 percent low- to moder- ate -income set-aside for housing.) 2. Zoning • Provide at least one density bonus for each unit of affordable housing required. • Exempt inclusionary units from building permit caps and growth allocation processes. • Proactively "pre -entitle" (general plan and zoning) the sites identified in the housing ele- ment as affordable housing sites. • Make appropriate surplus publicly owned land available for affordable housing. 3. Program Administration • Local governments should provide a dedicated staff and budget to administer the program or contract with a competent entity to do so. • This responsibility includes up -front assistance to homebuilders and prospective buyers/renters in the sales/rental process as well as long-term monitoring of the inclusion- ary homes. • In the case of for -sale inclusionary units, in which the developer makes a good faith effort to sell the unit but it remains unsold after 90 days, the local government should either: a) purchase the unit at the restricted price and take over marketing; or b) give permission to sell the unit at market -rate and capture the difference. For option A, the local government must close on the unit within 120 days from completion. For option B, the program should be structured so that there will be an incentive to obtain true market value for the unit. • The cost of program administration should not come from fees or other exactions imposed on builders. CONCLUSION Throughout California, public officials and private citizens are struggling to find ways to address the affordable housing crisis. Together, NPH and HBANC want to ensure that the dialogue about solutions is being informed by a set of principles effective and efficient at shaping public policies that will work for builders, cities and residents. California has long led the nation in innovative approaches to addressing the affordable housing crisis, and, by working together, NPH and HBANC believe that we can find common ground to help solve the problem in the near future. SUBMITTED INTO THE PUBLIC RECORD FOR 7 ITEM vz.a ON.I�J�b o-� . I ACKNOWLEDGMENT'S NPH HBANC S.�fif Staff: Dianne J. Sp adding, Executive Director _ Joseph -Perms_ PresidenCCEO - Geeta Rao. Policy D3rq or 'Paul Campos: t/ice-President of GAvernrrrer�tal Evelyn S i .ws. Program Ccordki attrr Affairs &Genera{ Cocrrset lnchisionary Housing tr i fi6tive " :: i ` Jai Bedecarra `Director of Communications & Tina Cluong. Commuhications & Programs Director ( j Member Services I Policy Comlittee. 3 Poliey Committee: Carol Galante, BRIDGE Housing,,- Layne Marceaid, Shea Homes Chris Glaudei Mercy Nousl ' Cb146 i'6 Greg Mix. William Lyon Homes John Lovirv. Burbank {-lousing Development Corp Mike Meyer, Greenbriar Homes Communities Londa Mandolini, Edea Housing Kile;Morgan Jr.; Ponderosa Homes :. Betty Pagett,, EAH, Inc. Dennis O'Brien; The O'Brien Group .:` Fran'Wagstaff, Mid -Penins Housing Coalition Cheryl O'Connor, VVarmington Hames Jeffre} Schroeder: Ponderosa Homes 3. i J. Christian;Truebridge,. Shapell Homes About NPH'- About HBANC Since 1979, the Non -Profit Housing Association The Home Builders Association of Northern California of Northern California (NPH j has worked to advance (HBANC) is a professional association comprised of affordable hoiasir3 as the foundation for thriving home builders, developers, trade contractors, suopli- ind€victuals_ families and neighborhoods. h ers, and related industry specialists who are dedicated ` to the, advancement of the home building, industry in As the collective voice of those who support, guild the Bay Area, � fihance anti,mar'mage-affordable housing,_NPH pro- : 'rotos.the, proven methods of the norm-profit'sector andfoeuse� government:policy on housing solutions. 369 Pine Street,Suite 850 200 Porter Drive, #200 San -Francisco, CA 94104 San Ramon, CA 94583 1eIX415);989 8160 .,. Tel (925) 820-7526 www'na>3profithousing.org v wvv.hbane.org . Plioto BRIDGE Housing Burbank Housing, Eden Housing it}AAC Co ppratic . 20,15, 2--,D6 NPH and HB..kNC. AlLnghts fesi?rged. Affordable Housing and the Miami 21 Form Based Zoning Code SUBMITTED INTO THE I. OVERVIEW: BASICS OF FORM ZONING AND MIAMPUBLIC RECORD FOR ITEMT>z_--)- ON c,1.51 o� Miami 21 is a complete overhaul of the city's current zoning code. It entails a comprehensive approach to land use and urban planning by implementing a form based code. Form based codes strive to achieve a specific urban form.by primarily focusing on controlling the physical form of buildings, rather than the usage of those buildings. FN 1. Miami 21 controls the shape and configuration of buildings and the relationship of buildings to each other, to streets, and to open spaces in an effort to create a greater mix of housing, commercial and retail uses. The drafters of Miami 21 feel this will further "transit and pedestrian oriented communities" while preserving certain environmental amenities such as green space and natural areas. FN2. In other words, Miami is attempting to reverse the trend of development sprawl and create eclectic, walkable clusters of development modeled after traditional "Main Streets" found in this country before the post World War II race to the suburbs. As form based codes are becoming more popular in cities around the United States, it is important to understand a few things about them. Form based codes seek to achieve a "community vision based on time -tested forms of urbanism." FN3. Whereas conventional zoning focuses on regulating development through the segregation of land uses and,.:coatrolling density; form based zoning seeks to regulate the character of development.; This is done through a regulating plan that designates the appropriate volume_ of development and its interaction with public spaces, rather than its usage. Form based codes often include building form standards, which regulate the configuration, features and functions of buildings, as well as public spaces and street standards, which specify details about sidewalks, street trees and street furniture among other things. Proponents of form based code argue that they work well in established communities because they essentially codify the neighborhood's existing "DNA". FN4. Because form based codes regulate development of individual buildings, they encourage development by multiple property owners. Advocates claim this creates a diversity of architecture, materials, uses and ownership within a given neighborhood by encouraging. development by many, smaller property owners rather than large "mega -projects". FN5. In this case market demand often determines how a building will be utilized. Proponents also point out that form based codes are often much shorter than traditional zoning legislation making them easier for non-professionals to read and understand. FN6. Miami's current zoning code has 361 allowable uses, many of them extremely redundant, and Miami 21 limits the available uses to 46. Reducing the number of allowable uses makes Miami 21 much easier to use, understand and implement. Miami 21 utilizes zones known as "transects" which dictate the type and volume of buildings allowed within that transect. Miami 21 incorporates six transect zones: natural, rural, sub -urban, general urban, urban center, and urban core as well as a multi-purpose "district" zone used for structures such as college campuses and airports that cannot be incorporated into a regular transect. Miami 21 also streamlines the building permitting process for allowable uses within each transect. When implemented, Miami 21 will create numerous commercial and high density residential clusters surrounded by decreasing densities of residential development. In theory, each cluster will be like a SUBMITTED INTO THE PUBLIC RECORD AOR ITEM Fe -_i ON (al-aekl I small town allowing residents to walk from their homes to nearby shopping, dining and parks. However, for all the good Miami 21 will do for the city of Miami, there is one glaring omission; a strong commitment to providing affordable housing for the City's lower income workforce. II. INCLUSIONARY ZONING AND MIAMI 21's AFFORDABLE HOUSING COMPONENT As real estate prices around the country, and in South Florida in particular, are on the rise, many residents of cities are finding it harder and harder to find safe, adequate housing near their place of work. In the Housing Element of its Comprehensive Plan, Miami -Dade county estimates that it will need to build 123,000 affordable units between 2000 and 2025 to satisfy the areas demand for affordable housing. FN7. Currently, Miami 21 only addresses affordable housing in section 3.11, known as the Public Benefits Program. As opposed to numerous other municipalities which require affordable housing units make up a certain percentage of new development, Miami 21 merely encourages the development of affordable housing through a bonus program. Furthermore, the bonus program is only available in the T6 Urban Core zone, and the T5 Urban Center Zone (and only then when the T5 zone abuts a "District" zone). The Public Benefits Program is intended "to allow bonus building capacity in T6 zones in exchange for the developer's contribution to specified programs that provide benefits to the public." FN8. Along with affordable housing, the other programs to which developers may contribute are public parks and open space, green buildings, SUBMITTED INTO THE PUBLIC RECORD FOR ITEMS ON-(, historic preservation, and the redevelopment of brownfields. Each program operates differently, but the general idea is that if the developer provides either on site space for one of the public benefits, or donates into a fund for the development of the benefits elsewhere, they are allowed bonus building capacity. For each square foot of affordable housing provided on site, the developer is allowed two square feet of additional area up to the maximum bonus height. However, for each square foot of affordable housing provided off site (or a donation of the cash equivalent to the Housing Trust Fund) the developer is allowed one addition square foot of area up to the maximum bonus height. The obvious problem with this system is that the option to provide affordable housing is within the developer's discretion. As drafted, Miami 21 allows a developer in a T6 zone, at a minimum, to develop an eight story building with up to 150 units per acre by right. FN9. This means that as long as the planned development meets all other applicable standards of the Miami 21 Code (volume, setbacks, etc.), a building permit must be issued as a matter of right. In some areas of Miami, a developer can build up to 48 stories without participating in the Public Benefits Program. FN 10. However, the developer that wishes to utilize the Public Benefits Program must proceed through additional procedural steps to receive an administrative warrant. FN 11. The process for obtaining an administrative warrant is more cumbersome than that of obtaining a permit by right. It includes a preliminary meeting with the Zoning Administrator and the Planning Director, informal courtesy notice and hearing, and a review and approval process with the Planning Director, and, if the project is above 200,000 square feet, it must also be approved by the Coordinated Review Committee. FN12. With these additional procedures come additional costs the developer can simply SUBMITTED INTO THE PUBLIC RECORD FOR ITEM?Z-- - ON& ?]of . avoid by electing not to participate in the Public Benefits Program. Moreover, even if a developer chooses to utilize the Public Benefits Program, she could elect to provide open space or build a certified "green" building. Both of these options could be more enticing to a developer wishing to maximize demand in a very competitive market. The obvious solution to the affordable housing problem is to include a mandatory inclusionary zoning component within the Miami 21 ordinance. Simply put, mandatory inclusionary zoning programs have been more successful than voluntary programs in creating affordable units. FN13. Inclusionary zoning refers to planning ordinances that require a percentage of new construction be affordable to low and moderate income families. These are commonly referred to as "set asides". Inclusionary zoning ordinances are currently in place in more than 200 communities, large and small, across the United States. One area where mandatory inclusionary zoning ordinances have worked quite well is the Metro -Denver area of Colorado consisting of Denver, Boulder, Lafayette and Longmont. By requiring "set asides" from new developments, these cities are using the power of the private market to create much needed affordable housing units. Like Miami, Boulder has little vacant land available, and most future development likely will be in the form of redevelopment and mixed-use property. FN14. In 2000 the city passed a mandatory inclusionary housing ordinance requiring 20 percent of new housing to be affordably priced for low-income households. FN 15. Through the first 4 years, 380 affordable units were built as a result of this ordinance, and 98 percent of the occupants already lived or worked in Boulder as teachers, nurses and other service sector workers. �" SUBMITTED INTO THE PUBLIC RECORD FOR ITEMT>z-a ONU� Prior to mandating that affordable units must be built as a percentage of new development, Boulder had unsuccessfully tried other programs to meet its affordable housing needs. In 1991 the city passed an ordinance whereby a developer could receive subsidy funds in exchange for providing affordable units. FNIT In other words, this was a voluntary program in which the developer was not required to provide any affordable housing units, much like the proposed Miami 21 Public Benefits Program. Boulder scrapped this program in 1995 in favor of a new ordinance because the voluntary program had failed to produce a significant number of units. The 1995 ordinance limited the number of market -rate building permits and created strong incentives for developers to include affordable units within their developments. FN18. This program also was ineffective, and was replaced in 2000 by the current, and effective, mandatory inclusionary zoning ordinance. The town of Davidson, North Carolina approaches affordable housing from a different perspective. The town considers affordable housing to be a "public facility" along with law enforcement, fire protection and community parks, and addresses these needs in its Adequate Public Facilities Ordinance. The town found that market -rate housing creates the need for commercial and service sector employment, which in turn creates a need for affordable housing. Therefore, the city found that requiring a certain percentage of new development be affordable was the best way to ensure affordable housing development kept pace with market -rate housing. This method ensures that public facilities needed to support new residential development meet the city's level of service standards, and enhance the "livability and profitability of market -rate housing in the community." FN 19. As you can see, there are multiple ways to go about requiring iUBMITTED INTO THE `UBUC RECORD FOR 7M TZ.,> ONJ M-O affordable housing, but the important thing is recognizing the need for affordable housing and implementing policies to ensure its construction. III. LEGAL CHALLENGES TO MANDATORY INCLUSIONARY ZONING Keeping in mind that Miami has an affirmative duty under the Housing Element of the 1985 Florida Growth Management Act to provide adequate housing for present and future residents; why doesn't Miami include a mandatory affordable housing component within the Miami 21 code? Miami officials say the reason is twofold. They believe that requiring the production of affordable housing as a part of the base code will force the City to defend Miami 21 against takings claims and potentially expose the City to substantial liability. Officials also believe the proposed voluntary Public Benefits Program "should entice significant participation and realize considerably more affordable housing units than the existing system provides." FN20. I believe they are wrong on both counts. In both California and New Jersey mandatory inclusionary zoning ordinances were challenged as unconstitutional takings of private property, and the highest courts of both states upheld the constitutionality of the ordinances. The California Supreme Court found that a generally applicable inclusionary zoning ordinance "warrant[s] the more deferential review... generally accorded to legislative determinations." FN21. The California Supreme Court based its decision upon the reasoning of the United States Supreme Court in Agins v. City of Tiburon. In A ins the Court held that a "general zoning law" would not, on its face, affect a taking if it "substantially advanced legitimate SUBMITTED INTO THE PUBLIC RECORD FOR , ITEMT2-)- ONAL,?-glcl. state interests," and did not deny an owner all "economically viable use of his land." FN22. These two cases read together show that a reviewing court will likely be very deferential to a legislative determination that mandatory affordable housing is in the best interests of the public. Under this standard of review, the City could very easily defend an inclusionary zoning aspect of Miami 21 that applies to all development. It must only show that creating affordable housing for low and moderate income families is a legitimate interest, and that the inclusionary zoning ordinance in question would advance that interest while not denying the landowner all economically viable use of his land. The city of Miami clearly has a legitimate interest in ensuring that decent and affordable housing is available to all of its citizens (given the fact that the state has created an affirmative obligation on local governments to do so) and a mandatory inclusionary component to Miami 21 would substantially advance that interest. Developers and property owners burdened by a mandatory affordable housing ordinance will likely argue that the ordinance is subject to the higher level of scrutiny proposed by the Supreme Court in its famous Nollan/Dolan decisions. Both Nollan and Dolan involved property owners seeking to improve their respective properties. As a condition to development approval, they were required to dedicate property to a public agency. Under this test, which places an increased burden on local governments to justify their policies, a municipality must show "that construction of market -rate housing created a need for affordable housing and then would need to make specific findings to demonstrate the `rough proportionality' between [each] project's specific impact on the SUBMITTED INTO THE PUBLIC REGARD FOR e ITEM Pz> ON 6 �e 1 0-7 , need for affordable housing and the inclusionary requirements imposed [upon that project]." FN23. If this test applied to every ordinance limiting or burdening a property owners development rights it would clearly place a great burden on local governments. Consequently, the Supreme Court, in City of Monterey v. Del Monte Dunes, Ltd., appears to have limited the application of the Nollan/Dolan test to government imposed exactions (where individualized fees are negotiated with a single developer), not legislatively enacted zoning ordinances, and lower courts have followed suit. FN24. In Florida, matters are further complicated by the Bert Harris Property Rights Act, § 70.001, Florida Statutes, which provides a cause of action to private landowners for government action that inordinately burdens the use of real property. An argument can be made that a mandatory inclusionary zoning requirement may cause a diminution in value of certain properties because developers can no longer sell all available units at market rates. Therefore the inclusionary zoning ordinance must provide bonuses for complying with the ordinance which are designed to preclude the developer from losing opportunities to build market rate housing. Density bonuses will accomplish this goal because they allow the developer to build a certain number of additional market rate housing units depending on the number and location of affordable units built. In effect, a density bonus will result in affordable housing units being built at no cost to the developer because they remain able to build the same amount of market rate housing as if the inclusionary zoning ordinance were not in place. This, in turn, keeps the developer economically whole and ensures that the inclusionary zoning ordinance does not burden the property in any economic fashion. SUBMITTED INTO THE PUBLIC RECORD FOR ITEMvz- -1- ON 0 �e o-7. ' IV. "AS APPLIED" CHALLENGES AND A SOLUTION While mandatory inclusionary zoning ordinances clearly pass constitutional muster and do no not constitute takings on their face, property owners may argue that the ordinance as it applies to their property (known as an "as -applied challenge) constitutes an unconstitutional taking without just compensation. One way around this argument would be for the city of Miami to have data showing the correlation between new development and the need for affordable housing, much like the city of Davidson (i.e. new development creates a need for teachers, police officers, etc. all of whom must live somewhere). After showing that new development creates a need for affordable housing, Miami could also provide bonuses in return for providing housing (as a way around the Bert Harris Act), and also include an administrative opportunity for an individual property owner to rebut the showing that his proposed project creates a need for affordable housing. The easiest way to implement this program would simply be to mandate the public benefits program as it applies to affordable housing. This will keep developers whole, and the administrative warrant procedures are already in place to allow a property owner to show that her new development does not create a need for affordable housing. SUBMITTED INTO THE PUBLIC RECORD FOR '° ITEM rz_a ONU A I �-7 . 1. Definition of a Form -Based Code. www.forTnbasedcodes.org/definition,html 2. Miami 21 Fact Sheet, City of Miami Planning Department. www.miami2l.M 3. Definition of a Form -Based Code supra Note 1 4. Peter Katz, Eight Advantages to Form -Based Codes. www.fon-nbasedcodes.org/advantages.htlnl 5. Ibid 6. Ibid 7. Adopted Components Comprehensive Development Master Plan — October 2006 Edition, Miami -Dade County at page III -1. http://www.miamidade.gov/planzone/cdmp.asp 8. Miami 21 Draft Code Public Hearing -First Reading 2007-06 § 3.11.1 9. See Id. Table 3 10. See Id. § 3.11.1 11. See Id. § 7.1.2.4 12. Ibid 13. Barbara E. Kautz, Comment, In Defense of Inclusionary Zoning: Successfully Creating Affordable Housing, 36 U. S F. L. REV. 971 (2002) 14. Jessica L. Webster, Success in Affordable Housing: The Metro Denver Experience, www.bpichicago.org 15. Ibid 16. Ibid 17. Ibid 18. Ibid 19. Davidson Adequate Public Facilities Ordinance § 18.1(c) 20. Email from Javier Fernandez, Office of Mayor Diaz, City of Miami, May 2007 SUBMITTED INTO THE PUBLIC RECORD FOR ITEM -P2 ON �as o�• 21. Home Builders Ass'n of Northern California v. City of Napa, 108 Cal. Rptr. 2d 60 (Ct. App. 2001) 22. Agins v. Tiburon, 447 U.S. 255, 260 (1980) 23. See Kautz supra note 13 at page 993 24. Ibid SUBMITTED INTO THE PUBLIC RECORD FOR ITEMFz- )- ON &,)-f o. SUBMITTED INTO THE IC3 PUBLIC RECORD FOR Community Benefits Coalition ITEMn-� ONc >f 10-7 Affordable Housing Component of Miami 21 Must Be Strengthened May 18, 2007- Working Document Miami 21 is a comprehensive plan for the future development of Miami. It proposes an overhaul of the city's zoning code, to create a Miami that is based around mixed-use, walkable, livable neighborhoods. The City's Planning Advisory Board recommended that the City Commission pass Miami 21, under the condition that the affordable housing component be strengthened. A coalition of affordable housing advocates has formed to propose suggestions to strengthen Miami 21. After press coverage, meetings with Commissioners, the planning department, and the Mayor's office, we have made some advances. • Miami 21 will now state that the funds from the Public Benefits Fund that are designated for use on affordable housing will go into the Affordable Housing Trust Fund. • The Mayor's office supports a Commission action to establish an annual guaranteed set- aside for affordable housing. • The City will begin to track the income levels of persons who are accessing city - sponsored affordable housing projects. • Guidelines against flipping properties are now explicitly part of Miami 21's affordable housing component. Despite these changes, however, the Public Benefits Program still does not do enough to ensure that Miami has a sustainable source for affordable housing. The following changes must be made to the Public Benefits Program before Miami 21 passes: 1. More opportunities must be created to provide affordable housing or contribute to the building of affordable housing Since it is limited to projects being built in already dense areas that want more density to build higher than they would otherwise be allowed, the proposed public benefits program will apply to too few projects to be a reliable source of funding for — or creation of — affordable housing. In order to address Miami's affordable housing crisis, the building of affordable housing should be incentivized Solution: Contributions to the Public Benefits Program must be mandatory for more projects. ommun ty BenefSfs Coplitior:. Co;:tac, info CAla lt: i' Qg::iail ^i7t' t3 C.iC-5640 4 VthY.�Biw QP3 YlL.^.ii ha1Va0:'KS.0'Q 2. More community accountability The proposed ordinance provides no guidelines for community oversight of funds collected for affordable housing. Solution: An independent community board must oversee the funds that the city collects for affordable housing. This board must be established concurrent with the implementation of the Miami 21 ordinance, and should represent a diversity of community interests. 3. Define affordable as affordable for working and poor people The Affordable Housing Trust Fund (AHTF) was created to assist eligible households to purchase housing, and to assist developers in building new affordable housing and rehabilitating old housing. However, the guidelines for the AHTF are far too broad in defining whom its funds are meant for. By including households up to 150% of Area Median Income (which is well above the income of an average Miamian) and failing to specify how funds should be dedicated within that range, the guidelines fail to ensure that it will meet Miami's most critical housing needs. Solution: The Affordable Housing Trust. Fund guidelines should be re -written to only go up to 120% of AMI, and to ensure that the majority of funds are used to help finance housing for people at or below 80% ofAMl, including Extremely Low -Income, Very Low -Income, and Low - Income populations 4. Guaranteed annual fundinLy for affordable housing Under the current, pre -Miami 21 rules, ALL money contributed by developers who want to build bonus stories.goes towards affordable housing. Under Miami 21, these funds would be used to build green space as well as affordable housing, with the City Commissioners deciding annually how the money from the Public Benefits Fund should be divided between the two. There is no guidance in Miami 21 as to how the funds should be spent, which puts commissioners in the untenable position of annually deciding whether they want to build parks or build houses. Miamians need and deserve both. Solution: Miami 21 must guarantee that at least 70% of expenditures from the Public Benefits Fund go to housing every year. SUBMITTED INTO THE PUBLIC RECORD FOR ITEM rza ON CC3 The Community Benefits CoaiiJon is Jobs Vhtii jusl;,:e, M a3ri'• Worker's Ct., ntr. ACORN, HurT#an .Seivices Coalition. Sour ` Fiorl�^aa IntS fait VVorKvr Justice. .Rower U Center fO .a%�. �qe. ,A4O"8''S Fund * L-ai^,. La County, c'o'tCc 1Eu3' �CS.iC,ES o^C^he miami-Dal-e ( curly Gomim ssiar) "OrVonii il, and. f`i8P-CK—j Cent -a' L8vv' C.S)unc... fz'd'CC, j Pes^ears!`: OrgamZ-a4t:m F!U Resealclh ins[li_! c On. JOC:c ana Economic P;ivy SUBMITTED INTO THE Make affordable housing part of Miami 2PUBLIC RECORD FOR Daniella Levine Pu ITEM a-- ON.& � o-7 Published in the Miami Herald Tuesday, May 5, 2007 � www.hscdade.ors No one can say that Miami. 21 is not an ambitious project. Through a studied overhaul of the city's zoning code, Mayor Manny Diaz and the design firm Duany Plater-Zyberk are trying to engineer no less than a complete overhaul of the social and civic life of Miami. • They want people's lives to be centered on neighborhoods rather than cars. • They want those neighborhoods to offer variety in the types of services available, so that residents' day -do -day needs can be met locally. • They want better public transportation and wide boulevards with inviting, shady sidewalks. • They want a regular, predictable, efficient zoning code that allows Miami to grow denser in a planned, controlled way, and that doesn't change on a moment's political whim. It is difficult to argue with these goals. Miamians have long lamented the amount of time we spend in cars and the social isolation that it breeds. And the widespread abuse of our chaotic zoning code is no secret. But if these are the only real changes to Miami's civic and social life brought about by Miami 21, then we will be missing a huge opportunity to address some of our city's more urgent social problems. I am thinking, in particular, about our unquenched need for affordable housing. Miami 21 includes a portion known as the Public Benefits Program, which will allow developers in dense urban areas to build larger than they otherwise would in exchange for providing public benefits (which include building affordable housing, building park space, cleaning up a brownfield, building the project to "green" standards, preserving a historical site or paying into a fund that provides money for these types of projects). By serving as a catch-all for all public benefits, the fund pits the interests of all those important aspects of city life against one another. But more important, the Public Benefits Program of Miami 21 is too modest in scope. It could encourage the construction of affordable housing in far more development projects than it already does, with obvious and vital benefit. Cities across the country have used this kind of inclusionary zoning to attract and maintain a viable, vibrant working class in the midst of escalating home prices. There's no reason Miami could not do the same. As the proposal stands now, buildings more than 50,000 square feet would have to obtain certification from the National Green Building Council that they meet certain minimum standards of environmental sustainability. In contrast, the only time the public benefits piece comes into play is when already -large buildings want to "buy" the rights to build bigger than the zoning code would normally allow. Diaz demonstrated courage and vision when he noted in his State of the City address that we are at a critical moment in the environmental history of our planet and must start taking long-term ecological sustainability into account when planning the development of Miami (which is particularly threatened by the effects of climate change). But the need to house our swelling population is no less pressing and no less important in planning the future viability of our city and its economy. I hope that city commissioners will be equally bold and visionary when they hear the Miami 21 proposal on May 24 and strengthen the affordable -housing component. Miamians need and deserve decent, affordable housing in addition to a livable, green city with effective planning. Miami 21 creates the opportunity to make both happen: a beautiful, efficient, green physical space supported by the diverse, inclusive society that will ensure its long-term success. Daniella Levine is executive director of the Human Services Coalition. SUBMITTED INTO THE PUBLIC RECORD FOR ITEMP.-,)- ON �1-4lo-7 . SUBMITTED INTO THE PUBLIC RECORD FOR ITEM?z�­ ON (o 9 Nine Lessons for Inclusionary Zoning Keynote Remarks of David Rusk' to the National Inclusionary Housing Conference Washington, DC October 5, 2005 Over the past 13 years I have spoken on inclusionary zoning (IZ) in over 100 communities and have actively worked on about a half dozen local campaigns. I would like to share my thoughts on where inclusionary zoning is today, what its potential could be, and nine lessons I've learned on how to get from what is to what could be. Where are we? From studies by others, such as Non -Profit Housing Association of Northern California and BPI, I've compiled a master list of IZ communities. The criteria for getting on my list are pretty exacting: 1) the IZ law must be mandatory, not voluntary; 2) it must cover all residential construction a ove ace am minimum project size, or "trigger point;" and 3) it must be jurisdiction -wide (not just targeted on certain areas). On my list are 134 cities, towns, and counties with 13.2 million residents in Census 2000. That means that almost five percent of our country's population now lives in communities that mandate mixed -income housing as a part of new housing developments. My list is undoubtedly an undercount. • I don't cover Massachusetts adequately due to insufficient data about many towns' inclusionary housing policies; • I haven't caught up with events in Illinois where the legislature enacted the Affordable Housing Planning and Appeals Act of 2003 — an extraordinary achievement for the housing advocates, led by BPI. The Act requires every one of Illinois' 2,824 counties, cities, and townships to have at least 10 percent affordable housing. An increasing number of local governments are adopting IZ laws to meet that goal; 1 David Rusk has been a speaker and consultant in over 120 metropolitan areas. A former mayor of Albuquerque, New Mexico legislator, and federal Labor Department official, he is author of Cities without Suburbs, Baltimore Unbound, and Inside Game/Outside Game. He is a founding board member of the Innovative Housing Institute. Information on inclusionary zoning and other reports, articles, and presentations can be accessed on www.davidrusk.com. "A • I refuse to list anything in New Jersey as long as Regional Contribution Agreements (RCAs) are in effect. RCAs were authorized by the state legislature to allow wealthy suburbs to sell back up to half of their "fair share" affordable housing quota to poor cities, thus escaping their court-ordered constitutional duty under the Mt. Laurel doctrine; and • I haven't listed New York City where a community coalition of thirty organizations has been successfully pressuring the city council to set aside 20-30 percent for affordable housing in recent major upzonings on a case-by-case basis. IZ's Potential What could IZ achieve? I have simulated "what -if' scenarios for the USA's 100 largest metropolitan areas. What if mandatory IZ laws had been in effect throughout these metro areas for the past en ears. I assumed a 15 percen se -asi e(ffFmost common standard) and a trigger point of ten or more units (the most common provision) that would cover about 80 percent of all new construction. Between 1980 and 2000, 21.8 million new housing units were built in these 100 metro areas. IZ would have yielded 2.6 million inclusionary units – almost twice sin _ e omes as wer�bui �ufiliz�ing owHousin ax Credits (that HUD says e en of all a fordab e ousing ui t). That would have met about 40 percent of the affordable housing need, according ToTne National Hous!ng on erence. Furthermore, suppose all these communities implemented Montgomery County's policy of having its public housing authority buy or rent one-third of the inclusionar units to extend the assistance to very ow - an extreme y- ow income families (less than 50 percent and less than 30 percent of Area Median Income, respectively). This would have reduced levels of economic segregation in these 100 metro areas by 37 percent — In hot housing markets with relatively low concentrations of poverty, such as Charlotte, Las Vegas, Orlando, Raleigh-Durham, and West Palm Beach, economic segregation could have been totally eliminated. In slow housing markets with high concentrations of poverty, economic segregation could have been reduced by 13 percent in Buffalo, by 16 percent in Cleveland, Detroit, Milwaukee, and Newark, and by 19 percent in Philadelphia. SUBMITTED INTO THE PUBLIC RECORD FOR ITEMT>z--D- ON 0-76 2 SUBMITTED INTO THE PUBLIC RECORD FOR ITEMP2-.;i- -,ON (o Housing Policy Is School Polic IZ would have an even bigger impact on economic school segregation, which has been rising steadily in this country. Practically any child from a family earning less than 70 percent of Area Median Income qualifies for federal free and reduced -price meals. I have studied, for, example, all 392 elementary schools in the 17 school districts of metropolitan Denver. If those 17 school boards adopted policies to achieve reasonable economic balance within each district's elementary schools, economic school segregation would be reduced by about 20 percent. But if school board policies were complemented by metropolitan -wide IZ, the combination W ould reduce economic schoo segregation by 75 percent — levels lower than in Sweden or The Netherlands, very economically egalitarian societies. That would have a dramatic impact on low-income children's test scores. Studies I have done for the Albuquerque, Madison, Baltimore, and five major Texas metro areas show that, for example, the difference between a poor child's attending a school where 80 percent of classmates are also poor, and that child's attending a school where 80 percent of classmates are middle-class would, on average, be a 13 to 15 percentile improvement in the child's test scores. Housing policy is school policy. Where a child lives largely determines educational opportunities — not so much in terms of how much money per student the local school district is spending, or pupil/teacher ratios, or school facilities, etc. but rather in terms of who their classmates — and, through inclusionary housing, playmates — are. Nine Lessons for Achieving IZ Such projections of IZ's potential impact are just exercises in mathematics. How do we get from here to there realistically? Let me suggest nine lessons based on my experiences. Lesson #1: Enact a mandatory, not voluntary. TZ law_ Voluntary programs don't produce much inclusionary housing. T'he`y simply give spineless public officials political cover that "they've done something" while it's "business as usual" for builders — but for only another five or ten years. Lesson #2: Advocate IZ primarily as m Ling workforce ousin needs rather than advancing social justice. A winning s ogan is "Anyone good enough to work here is good enough to live here." At Empower Hampton Roads' pro-IZ rallies, hundreds of people wave signs saying "MIZ MR is good for BIZ" as well as "MIZ is good for KIDZ." ("MIZ" means "mandatory inclusionary zoning." Lesson #3: However, advocate firmly (if more quietly) that IZ must serve the full range of workforce housing needs. IZ must not only help young police okers, firefighters, and teachers (for whom it is easy to rally public support) but your community's hospital orderlies and nursing home aides, convenience store clerks, and school janitors. Lesson #4: Be fair to builders. An IZ law must be a "win/win," helping meet both the community 'sneed for workforce housing and protecting the private homebuilders' profitability. At best, builders should be able to make a profit on the inclusionary units themselves. At worst, the bottom line should be revenue neutral for the entire development. Builders must not suffer any economic loss through IZ compliance. Assuring fairness requires that the local government provide a menu of cost -offsets. Density bonuses are the most important. In MET, ensrty bonuses s ou d be proportionally greater than the inclusionary set-aside so that the builder can reap the benefit of some bonus market -rate units. Other important cost -offsets are reducing or waiving certain city fees, modifying or waiving park dication or pparking requirements, providing flexibility on subdivision design (e.g. reduced street widths, etc.), and ex e ite processing of plats and permits ("time is money"). Lesson #5: Use other public subsidies to achieve deeper affordability. Even with all the cost -offsets, most builders cannot bring production costs below what families at 50-60 percent AMI can afford. The best strategy for extending IZ assistance to nursing home aides and convenience store clerks, for example, is to adopt Montgomery County's policy: have your housing authority or other public agency buy (or rent) one- third of the IZ units.2 Lesson #6: Focus on getting an area's first IZ law adopted. Neighbors do follow the leader. On my list, 34 municipalities were the first 2 The Montgomery County Housing Opportunity Commission has purchased 1,722 for - sale units and annually rents from 1,000 to 1,500 rental units for very low- and extremely low-income households. For thirty years the county's economic segregation index has been low and stable (right around 27 on a scale of 0 to 100). Fairfax County adopted the same policy, but has lagged in implementing it, purchasing less than 100 IZ units. Its economic segregation index rose from 22 to 33 in the same three decades. Fairfax County is now purchasing at least 25 inclusionary units a year. SUBMITTED INTO THE PUBLIC RECORD FAR ITEM F2.i ON & J2fo�, SUBMITTED INTO THE PUBLIC RECORD FOR ITEM ONd,,e1c)--) to adopt an IZ law; they averaged 17 percent of their county's population (some were less than 1 percent). Other cities subsequently enacted IZ laws so that IZ coverage now averages 52 percent of county populations. Lesson #7: Counter fears and bad information with facts. The fear most commonly voiced is that inclusionary housing will Examples of bad information are two studies of inclusionary zoning by the Reason Public Policy Institute, a libertarian think tank. They were commissioned by two California homebuilders associations4 and purport to prove that IZ caused reductions in homebuilding activity after adoption. However, for an organization that exalts the "free market" and is opposed ideologically to government regulation, Reason PPI chose to examine trends only in those cities that had IZ laws and not in non-IZ cities in their markets. I have done so for the Orange County study. I examined long-term housing trends not only for the five IZ cities but for the other 29 cities in Orange County (plus seven Census -designated Places within the unincorporated area of Orange County). What I found was that decline in housing production was highly correlated with relative residential density at the outset of each period studied. In other words, cities with a lot of developable land experienced high levels of homebuilding; in cities where developable land was growing scarce, homebuilding dropped off. There was no correlation with whether or not a community had enacted an IZ law. In many cases, groELng scarcity of land and risin housin costs were the stimulus or enacting IZ laws. 3 Two such studies are "The House Next Door" (www.inhousing.org/housenex.htm) by the Innovative Housing Institute (IHI) and the Greater Washington Research Council and "Effects of Mixed -Income, Multi -Family Rental Housing Developments on Single - Family Home Values" (htip://mit.edu/cre/researchihai/pdf/40B report HAI 0405. d�fl by the Massachusetts Institute of Technology's Center for Real Estate. 4 Patrick Maier, IHI's executive director, was advised by a buddy on the staff of the National Association of Home Builders, "Don't expect NAHB to ever support inclusionary zoning. It just isn't in our DNA." To provide a forum for pro-IZ homebuilders, IHI has received seed money from the Ford Foundation to explore organizing "inclusionary homebuilders associations." They would not seek to supplant NAHB chapters but rather be a locale for a) exchanging best practices on building inclusionary housing, b) developing model IZ ordinances, and c) encouraging builders to share their pro-IZ experiences with other communities considering enacting IZ laws. Lesson #8: Organize broad-based, pro-IZ coalitions. Getting your local government to enact an IZ law isn't just a matter of marshalling the right arguments and evidence. It's a political decision. You've got to have a critical mass of political power to move your city council or county commission to act. , But your job has only begun when you succeed in getting your local government to enact an IZ law. You've got to constantly follow through to make sure IZ is effectively implemented. That means that you've got to hold local officials to their commitments both to the affordable housing advocacy community and to the homebuilders. For example, you'll have to stand up in planning commission and city council meetings to make sure that they are granting -the density bonuses promised homebuilders in the face of NIMBY -ism -fueled opposition from neighborhood groups. A deal is a deal, and an effective IZ law must be a good deal for homebuilders. Lesson #9: Fight for Statewide IZ laws: A half dozen states have laws that encourage inclusionary housing in various ways. California, New Jersey, Massachusetts, Connecticut, Florida, and Virginia come to mind, but no state has yet passed an unambiguous, mandatory IZ law. Ultimately, the only way to get metropolitan -wide coverage is for state law to require it. Jim Crow by income is steadily replacing Jim Crow by race. As racial segregation slowly diminishes, economic segregation increases — with heavy racial and ethnic implications. IZ is the most direct tool to attack economic segregation. Mixed -income neighbor oo s are the best housing policy. Mixed -income neighborhoods ate the best school policy. Mixed. income neighborhoods are the est anti-crime po icy. Mixed -income communities are the best anti- tisca isparities policy. When we convene again in our next national inclusionary housing conference, let's have doubled that list of inclusionary communities. Thanks you. SUBMITTED INTO THE PUBLIC RECORD FOR -TEM pz_a ONr,42iLO , 1.1 SUBMITTED INTO THE PUBLIC RECORD FOR ITEMPz.� ON -0,-)g) o,. Increasing Housing Opportunity in New York City The Case for Inclusionary Zoning r- Pol i c` L ink Lifting Up Ad Sat Works- A Report by PolicyLink and Pratt Institute Center for Community and Environmental Development Fall 2004 Increasing Housing Opportunity in New York City New York City neighborhoods are about to change dramatically. The administration of Mayor Michael Bloomberg is undertaking substantial redevelopment plans, neighborhood by neighborhood, which will alter the pattern of growth for generations to come. At the same time, New York City's housing costs have marched dramatically upward, making it increasingly difficult for many New Yorkers to afford housing. The proposed planning changes can either deepen the challenges of affordability, or set a new course toward ensuring a diverse, stable housing stock that serves the needs of the spectrum of New Yorkers. Inclusionary zoning—setting aside affordable units in new housing developments—offers New Yorkers a tool to guarantee.that the benefits of changes occurring in their communities will be fairly shared in the years to come. New York City's Affordable Housing Challenge A tight housing market. New York City's 7dffIItd ion as grown significantly in the last decade. Despite a recent boom, housing construction has been lagging far behind increasing demand. This has pushed up housing prices everywhere, and particularly in "hot" neighborhoods in Manhattan, Brooklyn, and Queens. The lack of housing is marked by extremely low vacancy rates, particularly for lower - rent units, growing waiting lists for subsidized housing, and record -high homelessness. PolicyLink/Pratt SUBMITTED INTO THE PUBLIC RECORD FOR. ITEM Pl,;L ON 6,-4oi. A{fflrr��dC.., � g. Incomes of New Yorkers have notes pac�nahousing cos _. _ e average income for New York renter households grew just 3 percent from 1975 to 1999, but the average rent went up 33 percent. Even with the new financial incentives and subsidy programs introduced by Mayor Bloomberg in late 2002, the demand for affordable units is growincZ far faster e suppy A segregated city. Housing that has been built in -the 15 years as amplified race and income segregation. Most market rate housing has been concentrated in the higher -income neighborhoods of Manhattan and Staten Island, while affordable housing was primarily built in the lower-income neighborhoods of Harlem, the Bronx, and Brooklyn. Housing is a key element in a family's ability to live in the city. Without new affordable housing in'mixed- income communities, low- and moderate -income households will be forced into overcrowded and lower quality housing situations or forced to move out of their neighborhoods. The Opportunity: Dramatic Neighborhood Redevelopment Plans The city of New York has significant power to shape patterns of development. Mayor Bloomberg has offered an ambitious set of redevelopment initiatives for New York City that include more than two dozen area -specific plans, in all five boroughs. These plans include: rezoning actions, targeted financial incentives, and public investments in infrastructure, transportation, 444 Increasing Housing Opportunity in New York City and parks, as well as sports, convention, and cultural venues. The proposed zoning changes will alter the type and density of developments (residential, commercial, and/or manufacturing) allowed in each neighborhood. The four major types of zoning changes being proposed are: • Rezoning manufacturing areas to allow residential/office use; • Upzoning business districts to encourage mixed-use (commercial and residential) development; • Balanced neighborhood rezonings to preserve community context while allowing growth; and • Downzonings to prevent larger -scale development The rezoning of manufacturing areas will transform formerly industrial warehouse and factory land to residential and commercial centers. Business district upzonings and balanced neighborhood rezonings will create new space for housing units in areas with strong market demand. The downzonings will affect substantial land area throughout New York City and threaten to significantly reduce the potential housing built in these neighborhoods. These redevelopment plans are likely to result in 40,000 units of housing in the next 10 years and as much as 80,000 total units. However, many communities are deeply concerned about the lack of affordable housing guarantees. This analysis estimates that without further action, fewer than 8 percent of the new ouslnq units create In ese areas­37717ely to be affordable to most New Yorkers. Benefits of Inclusionary Zoning Inclusionary zoning (IZ) requires or encourages developers to make a percentage of units in new housing developments affordable to low- and moderate -income households. IZ policies have been adopted by hundreds of cities around the country and have produced thousands of units of affordable housing in mixed -income communities. Multiple studies have shown that mandatory IZ programs o n amoen development an are economically feasi a or eve opers and property owners. b PolicyLink/Pratt SUBMITTED INTO THE PUBLIC RECORD FOR ITEMON olm LO -7, Benefits of inclusionary zoning include: Producing affordable housing for a diverse labor force; • Fostering mixed -income communities; • Insuring affordability in tight housing markets; and • Stretching scarce public dollars by leveraging market -rate construction. Recommendations This report analyzes the housing needs, development - opportunities, and market conditions in New York City, as well as the experiences of jurisdictions with IZ programs around the country. The recommendations for New York City are: Apply mandatory inclusionary zoning to all future neighborhood -wide zoning changes. Many of the proposed large-scale rezonings create n i enslty an and value increases or proe owners. The city can and should require that all developers receiving this benefit create some affordable housing units. Evidence from cities coast to coast makes it clear that mandatory IZ programs produce more affordable housing than voluntary ones. For New York City, mandatory IZ should be applied to the rezoning of manufacturing areas, to the upzoning of mixed-use business districts, and to residential areas that are rezoned for more density. Where downzonings limit development, they should be balanced with nearby density increases that contain IZ requirements. Maximize affordable housing production by offering inclusionary zoning incentives in high- density residential neighborhoods. In neighborhoods not going through dramatic rezoning, developers should have the opportunity to participate in New York City's voluntary inclusionary program. In particular, the program, which offers developers a modest density increase if they choose to include some affordable housing, should be expanded to wide streets and other appropriate areas within neighborhoods zoned from R6 to R9 (generally three to 17 story buildings). Increasing Housing Opportunity in New York City The program should also be amended to make it a more attractive option, including combining with public affordable housing subsidies. Implementing a vo un ary program will increase the viability of building on small sites. Design an economically feasible IZ program that allows developers to create affordable housing and make a profit. Developers benefit from inclusionary zoning through non -monetary cost- offsets—usually density bonuses. By utilizing appropriate cost -offsets, the parameters devised for New York City should take advantage of the significant density that will be granted through major rezonings to deliver units at deeper levels of affordability. A mandatory program can be crafted so that developers can achieve their profit targets. While the IZ requirement will be imputed into land costs — property owners wi s- 1111ene`riiirom zoning than Set income levels for affordable housing eligibility to reflect community housing needs; broaden eligibility by connecting IZ to other affordable housing resources. New York City has a wide array of affordable housing subsidy programs targeted to homeless and low-, moderate-, and middle-income households. An IZ program can be crafted to meet a similar range, and it can be adjusted to meet neighborhood needs. Combining IZ with t e ousing nice out er rogram (formerly Section 8) and other resources can extend the reach of the program. Maintain permanent affordability of inclusionary units. New York is currently at risk of losing tens of thousands of affordable housing units as the terms of earlier programs expire. This problem need not be repeated with inclusionary zoning. Because the benefit of greater density is permanent the program_ can reouire long-term affordability for inclusionary units. PolicyLink/Pratt Prioritize on-site development of inclusionary units to encourage mixed -income communities. In the neighborhoods where new housing opportunities are being created through rezoning, many residents are concerned about the lack of affordable units. Prioritizing the production of affordable units as part o arger mar a -ra e developments, or nearby in the same communi — rattier an a owing in- ieu payments or istant off- site units—wille p to mee is need and lead more ifforclable housing opportunity t roughout the city. Draft clear legislation and authorize consistent administrative oversight to manage the IZ program. New York City has a strong history of progressive public policy to create affordable housing, and of high-quality implementation of these programs. The city can build upon this experience, and upon the capacity of its housing and planning departments to establish a program that will succeed. By adopting these recommendations, the city of New York can guarantee that its redevelopment plans create thousands of units of affordable housing in mixed -income communities throughout the city. Residents, developers, employers, and the city at large will benefit for decades to come from the combination of growth and affordability made possible through inclusionary zoning. SUBMITTED INTO THE PUBLIC RECORD FOR ITEMFz_;i- ON6),,y16-7_,