All year, Portland has had a crucial civic conversation about how to improve housing affordability and production. A pressing need was identified: workforce housing. This isn’t just important to the “workforce” segment of our community, but to every segment. And it isn’t just in the interest of the business community, but of the entire community.
In February, the chamber assembled a task force to examine the issues in housing affordability and production, with a focus on the workforce segment.
In its report, the task force found that an inclusionary zoning mandate cannot – and should not – be discussed as a stand-alone reform. The city agreed and came up with a list of incentives and rewards, calling it the “Encourage” approach.
We view the “Encourage” measures as sound policies that will produce housing stock. But some people still want to impose the inclusionary zoning mandate. Here are 10 reasons why we shouldn’t.
• The chamber supports the housing goals of the city. The “Housing” section of the Comprehensive Plan contains six policies, 33 objectives and 129 actions. Inclusionary zoning is not one of them.
• Confirmed by imminent construction of 440 apartments at midtown, as well as several other market-rate projects, the chamber has confidence in the market’s ability to correct some of its deficiencies.
• If inclusionary zoning is an experiment, it is a risky one because it cannot provide conclusive findings as to its results. At both the Planning Board and the City Council’s Housing Committee, a frequent question was “How has inclusionary zoning worked in other cities?” This cannot be answered.
Certainly inclusionary zoning “works” when a 30-unit complex is built and three of the units that accrue are in the workforce demographic. But establishing causality is impossible. Who’s to say whether three or 30 or 300 workforce units might have been built without the inclusionary zoning scheme in place?
• The report explored communities in Massachusetts, California, Florida, Maryland and other places. The findings warn of unintended consequences from something as powerful as inclusionary zoning. They show that if any affordable housing gains could somehow be attributed to inclusionary zoning, they are, at best, modest.
• Of the 99 surveyed communities in Massachusetts with inclusionary zoning, only 21 reported having some affordable units built. Importantly, there is no way of knowing if that number is a success – whether more units might have been built without inclusionary zoning.
• In the San Francisco area, where inclusionary zoning was adopted earlier (median of 1992), almost all of the 65 municipalities did report that some affordable housing was built (no causation). Yet the median annual production of affordable housing for each municipality was only nine units a year.
Here in Portland, with no inclusionary zoning mandate, there have been 2,000 units permitted since 2002. This equates to 165 units per year, and we know that significant numbers of those have been affordable.
• There is great promise in the reforms, incentives and rewards being discussed as part of a comprehensive “Encourage” approach to production and affordability. So let’s try them. Problems require that we prescribe solutions, but we must be careful not to overprescribe. Portland should resist the risky, heavy-handed mandate approach in favor of deploying the “Encourage” remedy, which is sure to produce results.
• Many developers will seek to avoid the inclusionary zoning mandate (and its $100,000-per-unit penalty) by building projects that are unaffected: nine or fewer units. Height and density deliver valuable economies of scale and good land use.
If, under an inclusionary zoning scheme, Portland experiences a disappointing trend to nine-unit buildings, height will effectively become irrelevant, and density will erode as precious land is squandered in a proliferation of small buildings.
• Some developers want to build low-income-specific housing, and with that choice they accept the administrative exercises that come with it. Vouchers, income verification and other vagaries are part of the program. Quality market-rate developers who are not equipped to perform those functions will flee Portland under an inclusionary zoning scheme.
• Under inclusionary zoning, the income verification component will not only be a byzantine chore, it will become inconsequential.
Renters will easily game a system either willfully or inadvertently as their marital status, livelihood and roommate situation affect their incomes and their ability to pay. Those few inclusionary zoning winners lucky enough to occupy an inclusionary zoning-created unit will want to keep it, and may game the system to do so.
Let’s all count to 10. Say “yes” to Encourage. Say “no” to Mandate.
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