On Common Ground: Winter 2007

Diversity
SmartGrowth &
C
ensus Bureau figures tell us that our young families and fewer moderate-income people.
nation is becoming more diverse and in Likewise, large-lot zoning results in large, expen-
many places there is no longer a majori- sive houses targeted toward a narrow range of the
ty population. Communities across the nation, well population. More generally, zoning combined with
beyond larger metropolitan areas and immigration marketing methods have resulted in the “one price
gateways, are becoming more diverse as their point” subdivision, segregating families by income.
African-American, Hispanic and Asian populations An often discussed, but seldom pursued, aspect
increase. of Smart Growth is its value as a tool toward inclu-
In the nation’s fastest growing metropolitan sion and increased social equity for disadvantaged
areas, from 2000 to 2004, minority groups con- minorities. For most of the 20th century, develop-
tributed to the majority of population gains. ment patterns, from urban disinvestment to subur-
National growth centers such as Las Vegas, ban sprawl encouraged by single-use zoning, rein-
Atlanta, Orlando and Phoenix are now prominent forced Americans’ tendency to live among others
centers of minority population growth. like themselves—similar income level, same racial
Yet in spite of the increasing overall diversity of group, maybe even the same ages or household
our cities and suburbs, when we view the nation on type. Increasingly, many people are seeing Smart
a local neighborhood scale, America’s minority Growth as an approach that can increase the diver-
populations are still largely segregated from the sity of our neighborhoods. But diversity will not
majority white population. Growth planning in happen automatically.
many communities can reduce the choices people Some Smart Growth methods may naturally
have about where they live. Communities that use achieve more inclusion—mixed-use zoning could
zoning to exclude apartments will have fewer be used to provide a wider range of housing types

2 ON COMMON GROUND WINTER 2007

and prices, which could encourage a greater mix-
ing of household incomes and sizes. Transportation
options, such as better transit and better facilities
for pedestrians and bicyclists, would allow those
without the means to own or operate a car the abil-
ity to fully participate in economic and social
opportunities. Reducing sprawl can bring needed
reinvestment to disadvantaged older neighbor-
hoods, bringing a range of incomes and new oppor-
tunities to former pockets of poverty. But without a
serious focus on inclusion and diversity, Smart
Growth development, whether it takes the form of
new “greenfield” towns or redevelopment or infill pattern of growth, as one tool to bring people
in older neighborhoods, could result in more of the together across racial and class lines. Coupled with
predominant pattern of segregation in America. policies and approaches that reduce racial barriers
People who care about inclusion and diversity and provide increased economic opportunities for
are viewing Smart Growth, which supports a minorities, Smart Growth can get us closer to our
greater diversity and connectivity in the physical ideal of one America.

For more information on NAR and Smart Growth, go to www.realtor.org/smartgrowth.

On Common Ground is published twice a year by the Government Affairs office of the NATIONAL
ASSOCIATION OF REALTORS® (NAR), and is distributed free of charge. The publication presents a wide
range of views on Smart Growth issues, with the goal of encouraging a dialogue among REALTORS®, elected
officials and other interested citizens. The opinions expressed in On Common Ground are those of the authors
and do not necessarily reflect the opinions or policy of the NATIONAL ASSOCIATION OF REALTORS®, its
members or affiliate organizations.

Editor Special Issue Co-Editor
Joseph R. Molinaro Fred Underwood
Manager, Smart Growth Programs Manager of Diversity Programs
NATIONAL ASSOCIATION OF REALTORS® NATIONAL ASSOCIATION OF REALTORS®
500 New Jersey Avenue, NW 500 New Jersey Avenue, NW
Washington, DC 20001 Washington, DC 20001

Distribution
For more copies of this issue or to be placed on our mailing list for future issues of On Common Ground,
please contact Ted Wright, NAR Government Affairs, at (202) 383-1206 or twright@realtors.org.

WINTER 2007 ON COMMON GROUND 3

W
hen many Americans look at their neighbors, they
see themselves. Same skin. Same income. Same—

Heading
more or less—house.
Sometimes it’s by choice. Other times it’s due to lack of
choice. Either way, it’s segregation based on race and class.
And in many communities, it remains a fact of life.
“There are a lot of willing integrationists in American socie-
ty, but when you try to find a stable, racially integrated neigh-
borhood, there’s not a lot of choice there,” said Sheryll Cashin.
Cashin, a law professor at Georgetown University, is the
author of “The Failures of Integration: How Race and Class are

toward
Undermining the American Dream.” Segregation may not be

Diversity
the law of the land, said Cashin, but after decades of policies
and practices that sanctioned and promoted it, segregation
based on race and class still dictates housing patterns in many
communities. Changing that, she said, will take a conscious
effort.
“There’s been a high degree of intentionality around [segre-
gation] and I don’t think you can counter that by accident,” she
said. “If you want inclusion … you have to have policies that
reflect that.”
As inclusion advocates pursue their agenda, Cashin believes
they have a natural—if not always recognized—potential ally
in supporters of Smart Growth. And vice versa.
“The goals of Smart Growth align with the goals of people
who care about creating inclusion,” she said. “It’s not always
obvious these people should work together, but they should.”
Smart Growth Smart Growth is most often viewed as a tool to address
sprawl, congestion and wasteful consumption of land and
resource. Can Smart Growth also address issues of race and
addresses race class in housing patterns?
“I think that it has the potential to do so, but the whole issue
and class issues of race and class has to be part of the discussion at the begin-
ning,” said Carlton Eley, a member of the Planning and Black
By Brad Broberg Community Division of the American Planning Association.
“It can’t be an afterthought.”

6 ON COMMON GROUND WINTER 2007 WINTER 2007 ON COMMON GROUND 7

Over the next 25 to 30 years, the U.S. will need regated?” he said. “You wall yourself off and
an estimated 45 million new housing units. At the maybe I do the same.”
same time, the U.S. is moving toward the day Given the gains achieved by the civil rights
when it will become a majority minority country. movement, segregated housing patterns are no
The question, said Xavier de Souza Briggs, is how longer about blatant denial of rights. They’re
will America grow—together or apart? about lack of choice. Everybody—in theory—is
Briggs is an associate professor of sociology and free to live wherever they want. In reality, choices
urban planning at the Massachusetts Institute of are limited by what’s affordable. If the only afford-
Technology and author of “The Geography of able housing for low-income populations—typical-
Opportunity: Race and Housing Choice in ly disproportionately minority—is concentrated in
Metropolitan America.” He considers the need to specific neighborhoods, that’s segregation.
expand housing choice “the most important invis- “I think we still have to work at this experiment
ible policy issue in America today.” we call civil rights and inclusion and diversity,”
Briggs calls it an invisible problem because said Eley. “It’s all about choice.”
“most white Americans don’t think housing dis- It’s not just about choices denied, though. It’s
crimination is much of a problem anymore and also about choices made. As people climb the lad-
many black Americans are ambivalent about inte- der, said Cashin, the holy grail of housing is to
gration.” Much, however, is at stake, said Briggs. continually “buy into the best neighborhood you
“What kind of a democracy can we be if we’re seg- can afford”—neighborhoods typically located far-

If you want inclusion …
you have to have policies that reflect that.


The goals of Smart Growth align
with the goals of people who care
about creating inclusion.
ther and farther from the city and filled with hous- the Federal Housing
es of similar price and people of similar class. Administration (FHA)
“Most people think of [segregation] as the natural once instructed all
state of the real estate market.” private lenders who
In any discussion about segregation, there’s an offered FHA-backed
elephant in the room that many people pretend loans that it was “nec-
isn’t there. “Fear of black people in numbers is a essary that properties
contributor to sprawl,” said Cashin, herself an continue to be occu-
African American. “People don’t want to admit it, pied by the same spe-
but I think that drives a lot of outward movement. cial and racial class-
Any metropolitan area that has a black population es,” said Cashin.
approaching 20 percent has … very strict patterns Today, that would
of racial segregation.” be against the law, yet
Briggs agrees. “That fear is there,” he said. many neighborhoods
“Everybody is comfortable with some diversity. It’s still suffer the conse-
just a question of where the threshold is.” quences of that form
Out-and-out racism is not necessarily driving of segregation, said
the fear. In fact, Briggs calls young white renters Cashin. Meanwhile, a
“the market’s great integrators.” They appreciate host of other policies
the affordability, diversity and energy found in and practices contin-
inner-city neighborhoods—which is also where ue to perpetuate seg-
low-income and minority populations tend to be regation. They include zoning codes that preclude
concentrated, he said. affordable housing, lack of public and private
Everything changes, however, when renters investment in low-income neighborhoods and the
start thinking about buying a home and raising a steering of black and Latino buyers to “appropri-
family. That’s when things like property values ate” areas, said Cashin.
and school test scores begin to drive their housing If that’s the how-come of segregated housing
decisions. “It’s a bit of a confidence game played patterns, what is the why-care?
out on a grand level,” said Briggs. “People say, I’m “If you think about what America stands for—
not prejudiced, but I’m going to [choose a neigh- freedom, equality, everybody who works hard
borhood] based on what other people’s prejudices should be able to progress—our best view of
might be.” America is never going to come to pass if we don’t
In the past, the institutional forces shaping seg- achieve racial and economic inclusion,” said
regated housing patterns were blunt. For example, Cashin.
The nitty-gritty is this, said Briggs. Segregated
housing patterns limit access to opportunities for

Kentlands in Gaithersburg, Maryland


Beall’s Hill in Macon, Georgia You get racial
inclusion through the
collaborations you build.
auxiliary units built over the garages or at the rear
of full-size homes—that rent for as little as $750 a
month, said Thadani. “They’re referred to as a
Trojan Horse to increase density,” he said.
Auxiliary units add affordable housing to
Kentlands without changing the look and feel of
the neighborhood from the street, Thadani said.
Beall’s Hill is an old residential neighborhood
next to Mercer University. To boost the supply of
walking-distance housing for university staff/fac-
ulty and employees of a nearby medical center, the
university and the city of Macon enlisted
Ayers/Saint Gross to create a master plan for the
neighborhood that would renovate old homes and
low-income and/or minority populations. By limit- build new ones. The university is offering a sub-
ing choice in housing, segregation limits choice in sidy to employees—17 percent of the final closing
education, employment and overall quality of price of a home up to a maximum of $15,000.
life—all of which lag where poverty dominates. Many Beall’s Hill homes sat on 200-feet-deep
“What’s at stake is the ability of people to function lots with vast back yards. To create more density,
in healthy ways,” he said. the lots were split into 100-foot-deep parcels and
Count Cashin among those who consider Smart new streets built between the subdivided lots. The
Growth a possible remedy—“if it’s done wisely and result is a neighborhood where carefully designed
with a degree of intentionality,” she said. “I know new homes of 600 to 2,800 square feet blend seam-
what Smart Growth stands for, but the results can lessly with renovated historic mansions of 3,000
vary on the ground.” square feet. “We were very conscious of not being
With its emphasis on density, infill develop- able to tell from the street level that this house was
ment, access to public transportation and—most different than that house,” said Thadani.
importantly—diverse housing types, Smart Growth Kentlands and Beall’s Hill show it’s possible for
brings a lot to the inclusion table. Rather than cre- Smart Growth to provide economic inclusion in the
ating neighborhoods for a single class of people— housing market. At the end of the day, however,
be it high-income or low-income—Smart Growth people are still free to make up their own minds
creates neighborhoods where choices exist for about where they want to live. “Just because you
both. expand choice doesn’t mean people will avail
In some cases, Smart Growth creates affordable themselves of that choice,” said Briggs.
choices in affluent communities. In others, it cre- That’s especially true for racial inclusion. “I
ates upscale choices in less affluent communities. don’t know how you can encourage one racial
Either way, it fosters a less segregated housing group over another,” said Thadani.
market. Dhiru Thadani can point to successful It definitely can’t be mandated, said Cashin.
examples of each. “No way constitutionally or philosophically would
Thadani, a principal with Ayers/Saint Gross it make sense to set aside [private] housing specif-
Architects and Planners in Washington, D.C., ically for racial or ethnic groups,” she said. “The
helped design Kentlands, a New Urban communi- only way you get racial inclusion is through the
ty in Gaithersburg, Md., and Beall’s Hill, a rede- collaborations you build.”
velopment project in Macon, Ga. Both feature a The goals of advocates pushing racial inclusion
variety of housing choices—not just in the same and those promoting Smart Growth represent “a
community but on the same block. convergence of self-interests” that should motivate
In Kentlands, $500,000 homes sit next to them to become close allies, said Cashin. Smart
$225,000 homes. That’s a small step toward Growth—at least on paper—expands choice in the
expanding choice. A bigger one is “granny flats”— housing market. Meanwhile, inclusion—or rather


the “racially identifiable populations” the move- Take, for example, sprawl. It isn’t just a blight on
ment serves—expands Smart Growth’s political the landscape or a strain on infrastructure. It steers
support for the land-use policies it requires. investment, development and people away from
“I think we still have to work at fostering a inner-city neighborhoods, which suffer according-
sense of parity across communities,” said Eley. ly. “I would say that they’re the biggest victims of
“Civil rights is often viewed as a means to an end. sprawl, yet they don’t have a voice in development
Financial literacy is another important tool. In the patterns at all,” said Trenholm. “We really feel like
end, it’s all about choice.” these groups … need to be represented in some of
That’s exactly what the Coalition for Livable the policy decisions happening here.”
Communities is doing in Memphis, Tenn. The Inclusion is not just the right thing, it’s what
coalition is a community-based network that is many people want, said Cashin. “Right now,
promoting Smart Growth “from an equity perspec- there’s more demand for racially integrated neigh-
tive,” said Emily Trenholm, executive director of borhoods than neighborhoods to fill the demand,”
the Community Development Council of Greater she said. “If you build it, they will come. You may
Memphis. “People in low-income neighborhoods not get everybody, but there’s a lot of people who
are very focused on neighborhood issues,” said want their children to grow up in diversity.”
Trenholm. “They don’t step back and think about Brad Broberg is a Seattle-based freelance writer special-
how some of the these bigger issues affect their izing in business and development issues. His work
neighborhoods.” appears regularly in the Puget Sound Business Journal
and the Seattle Daily Journal of Commerce.

There’s a lot of people who want their
children to grow up in diversity.


Gentrif ication Is it the blueprint for
neighborhood improvement
or displacement?
By Heidi Johnson-Wright


F
or some, it can signify many positives: activity and a sense of community. This scenario
affordable, unique housing stock with has a heavy impact on the residents. Political lines
eye-catching architectural details, funky are drawn and strange bedfellows come together.
little boutiques and delightful ethnic eateries, brag- Urban pioneers move in—the privileged, the edu-
ging rights about a cool zip code. cated, artistic types—attracted by a variety of hous-
For others, it means nothing but negatives: ris- ing options, access to transit, cultural aspects, the
ing rents, a sense of invasion, changing neighbor- energy, the funkiness.”
hood identity and an uncertain future. “The people who move in—the artists, then the
Gentrification is one of those words that can trig- hipsters, then the yuppies and the very affluent—
ger a variety of reactions and opinions, though its are attracted to the same things that drew the orig-
most basic definition is very simple: “people of inal residents, but they are less dependent upon
higher income moving into a neighborhood.” them. What are amenities to those who move in
were necessities for those who were displaced,”
After said Grant.
But not everyone agrees on the phenomenon of
displacement.
Lance Freeman, professor in the urban planning
program at Columbia University, believes that dis-
placement is not always an automatic, pejorative
result of gentrification.
“Some people claim to find high amounts of dis-
placement, and you would think this is pretty wide-
spread. But the studies I’ve seen don’t seem to
show a lot of displacement,” said Freeman.
In Freeman’s recent book, “There Goes the
‘Hood,” which focuses on black, inner-city neigh-
borhoods, he states that “… indigenous residents
do not necessarily react to gentrification according
to some of the preconceived notions generally
attributed to residents of these neighborhoods.
Before Their reactions are both more receptive and opti-
mistic, yet at the same time more pessimistic and
Martindale on the Monon, distrustful than the literature on gentrification
Indianapolis, Indiana
might lead us to believe.”
Freeman doesn’t dispute that negative things
It can come in var- can sometimes result from gentrification, yet he
ious forms and indis- cites communities—Boston’s Dudley Street and
putably signals downtown Brooklyn—that have employed success-
change, but just what ful programs and mechanisms to turn the negatives
those changes are into positives.
and whom they affect In a 2005 issue of Poverty & Race, published by
can range across a the Poverty & Race Research Action Council, for-
very broad spectrum. mer Berkeley, Calif., Mayor Gus Newport wrote
“Urban change is always a traumatic process, about his tenure as the director of Boston’s Dudley
and is part and parcel of cities themselves. The Street Neighborhood Initiative (DSNI.) His con-
issues become: what is the rate of change? Who are tention is that, in the long run, public affordable
the losers, and do they have ways of adapting?” housing resources speed up gentrification and dis-
said Benjamin Grant, planner, urban designer, placement. Therefore, community land trusts
writer and teacher in the Urban and Regional (CLTs) are a better solution.
Planning Program at San José State. “Through a series of policy firsts, DSNI became
Looking to his own stomping ground—the San the first community nonprofit organization in the
Francisco Bay area—Grant references the San country to be awarded eminent domain powers
Francisco Mission District as an example. over vacant land in a 1.3-square-mile area of the
“This type of gentrification involves an immi- city of Boston,” wrote Newport.
grant neighborhood of residents who are primarily “The CLTs long-term interest in the land and
renters. Before gentrification, it’s a thriving neigh- property assures that this balance of interests is
borhood with jobs, access to transit, commercial maintained and community wealth is retained. The


Residents were able to create a vibrant
multicultural community.
value of public subsidies used to develop the The development’s potential affects upon the
affordable housing is permanently tied to the hous- local community have caused a hue and cry, and
ing, thus recycling subsidy dollars from owner to served as a catalyst for a deal that’s been struck
owner, assuring long-term affordability and com- between the developer, Forest City Ratner and
munity benefit.” ACORN, the Association of Community
“Through the community-controlled land trust, Organizations for Reform Now, the nation’s largest
the residents were able to create a vibrant multicul- community organization of low- and moderate-
tural community, developing hundreds of afford- income families, working together for social justice
able homes and providing an opportunity for resi- and stronger communities.
dents to personally benefit from the community “When Atlantic Yards was originally proposed, it
revitalization they themselves planned,” Newport contained only market-rate rental housing and con-
wrote. dominiums. Between 1990 and 2000, the African
Atlantic Yards, a proposed mixed-use Frank American population of the area surrounding
Gehry and Laurie Olin-designed development in Atlantic Yards decreased by 17.2 percent. For more
downtown Brooklyn, will include housing, offices, than a decade, we had seen new high-rise condo-
retail and a boutique hotel surrounded by seven- miniums popping up across the downtown
plus acres of public open space, plus an arena for Brooklyn skyline—pushing out longtime residents
Brooklyn’s NBA franchise, the Brooklyn Nets. and exacerbating the area’s housing affordability
While it has yet to be built, Atlantic Yards has crisis,” said Bertha Lewis, executive director of
sparked substantial controversy. New York ACORN.


When you have diversity, Eric S. Friedman, a REALTOR® and developer in
St. Louis, Mo., believes in the importance of
it brings new energy and maintaining diversity in creating a real community.
“What happens when we don’t have a sense of
an improved economy to community? It does something to the fabric of our
the community. society when we must drive everywhere instead of
walking. This affects everything, from crime right
down to one’s personal health,” said Friedman.
“Through months of negotiations we arrived at “When you have diversity, it brings new energy
New York City’s first legally binding Community and an improved economy to a community. This
Benefits Agreement and a groundbreaking helps people to take advantage of the value of
Memorandum of Understanding between ACORN diversity. To attract diversity, it helps to have range
and Forest City Ratner about the housing compo- of types and prices of housing in a community.”
nent of the project.” Friedman has been very involved in getting a
Lewis said under the agreement, half of Atlantic 25-percent state historic tax credit and other tax
Yards’ 4,500 rental units will be offered at afford- incentives passed in Missouri.
able rates. Unlike many NYC affordable apart- “We’ve been a throwaway society. Look at how
ments that have a limited range of unit types, this we treat natural resources. The same applies to
development will have different apartments that buildings. The (historic tax credit) program can
can accommodate household sizes from one to six. bring great economic rewards. The program sup-
All 4,500 units, including the 50 percent made ports the renovation of historic properties and
affordable, will be rent stabilized. buildings in a historic district and includes home
“More than anything, in an era of increasing ownership, multifamily housing, rental housing
housing segregation, Atlantic Yards will be one of and requires high renovation standards. The tax
the only neighborhoods in Brooklyn where families credit goes to developers as incentives to renovate,
of all backgrounds will be able to really live and especially in a high construction cost market,
grow together,” she said.

Neighborhood clean-up day,
Indianapolis, Indiana


where there can be extra costs like
asbestos abatement and environ-
mental issues,” Friedman said.
As Friedman points out, gentri-
fication doesn’t always equate to
tearing down buildings in old
neighborhoods and replacing
them with out-sized monolithic
structures, as sometimes hap-
pened during the first wave of
American urban renewal. With tax
credit programs and creative Indianapolis Mayor, Bart Peterson, looks on
redevelopers, restabilizing a as Navonda Adams, lifelong resident of
neighborhood can include pre- Martindale on the Monon, speaks in support
serving its character and scale. of the neighborhood gentrification.

As a former four-term mayor of
Indianapolis, author and Urban
Land Institute Joseph C. Canizaro Chair for Public
Policy, William H. Hudnut, III understands a thing Restabilizing a neighborhood
or two about gentrification and effective approach-
es to it.
can include preserving its
“Cities are becoming more sensitive to these
issues. You don’t just go in and slash and burn. You
character and scale.
go in and save,” said Hudnut.
“The government has an obligation, as well as When Martindale developer Mike Higbee
developers, to work with people and appropriately arrived on the scene four years ago, he saw a once
relocate them in the same neighborhood, if their thriving community with strong history of home
homes must be taken in creating permanently ownership blighted with abandoned cars, trash and
affordable housing or other development projects. overgrown weeds. But he knew things could turn
If redevelopment allows for homes to be saved, around without displacing those who wanted to
then there needs to be partnerships with communi- stay. The key was the approach.
ty development corporations or other nonprofits to “It took us two years to assemble the land, which
procure grant funds for restoring the properties.” had enough empty lots to re-knit the fabric of the
Hudnut’s advice to communities facing these neighborhood. Then we had to earn the trust of the
issues is to employ patience and respect for the existing homeowners. We went door to door telling
residents. the residents that no one would be uprooted; no
”As the mayor of Indianapolis, my mantra was one’s home would be taken. We also brought in a
‘avoid the acute angle.’ Don’t let things degenerate community development corporation to get funds
into a ‘me versus you’ situation. Come to the table to rehabilitate some of the homes,” said Higbee.
and see what we can work out,” he said. Since those early days when the median house
Regarding the emotional chord that gentrifica- value was $26,000, they’ve built 22 houses which
tion can strike, Hudnut thinks that it’s gotten a have caused the average area home value to jump
bum wrap. to $185,000. Of the new homes built, 40 percent are
“People start wailing and weeping and gnashing affordable and 60 percent are market rate.
their teeth. I think you can say ‘three cheers for With each successive year, they hope to be
gentrification,’ especially when it serves to coun- adding 40 to 50 more. Townhomes, apartments, and
teract abandonment, increase the tax base and sta- a live/work district are also planned. Some folks
bilize a neighborhood.” have already moved in to this neighborhood near a
As a good example of a project that utilizes bike/hike trail, and they include lawyers, artists
Smart Growth principles to achieve these goals, and an airline mechanic.
Hudnut points to Martindale on the Monon, a Said Higbee: “We’re not building housing; we’re
revival of a historic downtown Indianapolis neigh- in the business of building a neighborhood.”
borhood with new single-family housing. Heidi Johnson-Wright frequently writes about Smart
The first 15 home sales happened to be made to Growth and sustainable communities. She and her
white young professional trendsetters moving into husband live in a restored historic home in the heart of
Miami’s Little Havana. Contact her at:
a neighborhood comprised largely of African hjohnsonwright@yahoo.com.
American senior citizens.


The Key to
Family Housing
Smart Growth opens the
door for affordable family
housing options
By Christine Jordan Sexton


H
omes are where jobs go at night. It’s not The reason is simple, says Hamilton, vice presi-
a saying California REALTOR® and dent and manager of Alain Pinel REALTORS®
developer Jim Hamilton originally branch in Los Altos and 2005 president of the
coined, but it is a turn of phrase that has helped California Association of REALTORS®. Without
guide his belief that family housing is the fabric of affordable housing options for their employees,
a diverse, thriving, well-planned community. employers will relocate their firms. When the jobs
In short, without family housing a community’s leave, the workers and their families will follow.
social and economic success are at risk. “One thing families create and children create is
the future,” Hamilton said. “Who is going to fill
into the community and take over the community
as we get older and retire if we don’t have children
in the environment? Who is going to be there?”
Yet resistance to including family housing in
communities is commonplace. Exclusionary zoning
requirements like oversized lots block affordable
options from being built. They also drive up the
costs of the home and contribute to widespread and
ill use of land. Exclusionary zoning essentially
undermines the efforts to build high-density,
mixed-use developments that offer a variety of
housing options to meet different income levels.
Consider Massachusetts. It is the only state to
lose population the last two years and it ranks in
the bottom five nationally in housing production. It
is considered the most expensive housing market
in the nation, and it is a prime example of an area
where affordable family housing is slipping away.
Through exclusionary zoning requirements—
namely large lot requirements—communities there
have routinely opposed the inclusion of affordable
family housing for the local school teacher and his
family of four or the area firefighter and her three
children.
Communities cite any number of reasons for
opposing family housing options, such as more
traffic congestion, increased demand on infrastruc-
ture and increased local taxes to pay for schools.
A January 2006 study conducted by the
Massachusetts Housing Partnership and the MIT
Center for Real Estate indicates that half of the
30,387 new single-family homes built between
1998 and 2002 were built on lots of nearly an acre
or larger. In the Western United States, the study
indicates, the typical new house is built on about

Without family housing,
a community’s social
and economic success
are at risk.


In order to maintain
successful family housing
in developed areas,
people need to abandon
the conventional ideas.

one-quarter of an acre of land and in the South the
typical new home lot is one-third of an acre.
The study notes only one out of four communi-
ties outside the metropolitan area had any multi-
family developments of five or more units during
the same four-year period.
It’s startling statistics like that which helped per new or rehabbed unit—also will be paid to the
lead to the passage of 40 S and 40 R, new regula- developer once the permit for the new or rehabbed
tions in Massachusetts that deal with growth and is issued.
family housing in a New Urbanism, Smart Growth 40 S is meant to work more like an insurance
context. policy and won’t trickle into the community unless
The first of the new laws—40 R—pays a commu- the school district incurs a deficit due to an influx
nity willing to build housing in high density areas. of 40 R housing.
The community gets paid an incentive for zoning Thirty-five years before the new Smart Growth
the units and then gets state Smart Growth incen- laws, the Massachusetts Legislature passed
tive money again when the buildings are complete. Chapter 40 B, or the comprehensive permit law. It
40 S is an incentive to pay for any additional encourages communities to have 10 percent of
educational costs related to school-age children their housing stock available for households whose
who come from the 40 R produced housing. income is 80 percent or less of median for the area.
Thirty-five communities are actively working on When communities don’t meet those standards,
implementing Smart Growth zoning districts under developers can apply locally for streamlined “com-
chapter 40 R and as of October 3, six Smart Growth prehensive” permits to build mixed-income hous-
zones had been approved by local governing bod- ing so long as they are willing to commit at least 25
ies, said Eleanor White, president of Housing percent of the units for residents with below-aver-
Partners, Inc., an affordable housing consulting age incomes.
firm based in Massachusetts. Nonetheless, when developers try to override
40 R incentive dollars—which range from a low local zoning under Chapter 40 B, “communities
of $10,000 for 20 new units to a high of $600,000 for often fight tooth and nail, except for age-qualified,
more than 500 units—can begin flowing to the (55 and older) projects that don’t produce chil-
communities almost immediately. An additional dren,” said David Wluka, president of the
“one time density bonus payment,” set at $3,000 Massachusetts Association of REALTORS®. The


ing happening’ is not an option. People tend not to
understand.”
In California, Hamilton and his partner, Dan
Niemann, developed the $25 million El Centro
Lorento, a community housing center developed
along with the not-for-profit organization Search to
Involve Filipino Americans. Although the building
was allowed under zoning requirements, it was met
with a firestorm of opposition from neighborhoods
more than one mile away. Today there is a waiting
list for the residences.
“The day it opened it was filled to capacity,” said
Hamilton, who also is a partner in Neimann
Properties.
In order to maintain successful family housing
in developed areas, people need to abandon the
conventional ideas in favor of flexible zoning mod-
els. Family housing could be built near the oversize
parking lots employers are willing to build to ease
parking woes or even over the parking lots if zon-
ing was more forward thinking. Employers would
have to start playing a role in order for scenarios
like that to play out, Hamilton said, adding that
communities and municipalities also would need to
One thing families work with the employers to help make it all hap-
create and children pen.
“That takes an awful lot of players getting
create is the future. involved,” Hamilton said.
Developer businessman Cortez Carter gives
Chicago high marks for prioritizing family housing
rejected project is then sent to the state Housing in the redevelopment projects occurring there.
Appeals Committee for review which takes prece- Carter is the president of the Chicago-based
dent over local rules. Quest Development Group, a fully integrated con-
In the battle to provide affordable housing, 40 B struction firm with expertise in affordable housing,
has been described by many as the stick. 40 R and among other things. He recently built 25 two-unit
40 S are seen as the carrots. family homes in Auburn Gresham and the sur-
That’s a description that Wluka considers rounding area. The homes there consist of a two-
“unfortunate,” because he believes that 40 B is a story, three-bedroom owner’s unit as well as a two-
smart planning tool when applied properly with bedroom, ground-level rental unit. Both the
community support. Either way, Wluka said towns owner’s and the renter’s unit are self contained.
in Massachusetts need to be more involved with Carter holds the units out not only as family
better managing their growth. housing, but stresses that units like those also
“You can take command of what’s going on, or encourage home ownership. And it is a way to
you can sit back and let it happen to you; but ‘noth-


Thirty-five communities [in
Massachusetts] are actively
working on implementing
Smart Growth zoning districts.
make home ownership more affordable for many ship.” The majority of those buying homes from
families. The self-contained renter’s unit can be Quest Development are former tenants who lived
leased to a family member, Carter says, noting that in family housing. “It’s not about who is buying,”
pooling funds with a family member divides up the says Cortez. “It’s about buying and bringing fresh
family’s financial burdens. Additionally, the people in.”
renter’s unit could be rented to a non-family mem-
Christine Jordan Sexton is a Tallahassee-based freelance
ber and rental income comes in to offset the costs of reporter who has done correspondent work for the
the mortgage. Associated Press, the New York Times, Florida Medical
Carter says homes such as the ones in Auburn Business and a variety of trade magazines, including
Gresham offer families “new forms of home owner- Florida Lawyer and National Underwriter.


A Balance of

Opportunity Mixed-income housing
provides a place for every
economic background
By Jason Miller

O
ne of the hallmarks of a healthy commu- income housing,” says Emily Talen, associate pro-
nity is a balanced mix of housing fessor of urban and regional planning at the
options at a variety of price points, University of Illinois at Urbana-Champaign. “The
which in turn encourages economic diversity first addresses the fairness of it: Mixed-income
among its residents. In the late 19th and early 20th housing should be developed as a broader social
century, this diversity was the default setting in goal because doing so provides a more equitable
most American neighborhoods. But as use-based distribution of resources. You’re not concentrating
zoning took hold after World War II, it gradually one group in one area with limited resources, while
morphed into the current default system, which concentrating another group in another area with a
often segregates residential areas by price point, separate group of resources. It’s the geography of
effectively creating pods of wealthy homeowners, opportunity, equity, fairness; you want to promote
middle-class homeowners and those less fortunate. ‘the American Way.’ In doing so, you build toler-
Today, mixed-income neighborhoods—both new ance because there is daily contact among neigh-
and revitalized—that follow the tenets of Smart bors.
Growth and New Urbanism are beginning to “The other response takes the approach of
demonstrate the wisdom of returning to a more urbanist Jane Jacobs. Neighborhoods with an equi-
income-integrated development model. While the table mix of housing options help to foster innova-
jury is still out regarding how much healthier tion, creativity and economic growth. These neigh-
mixed-income neighborhoods are as compared to borhoods provide fertile media for cross-fertiliza-
their segregated, conventional suburban counter- tion of cultures and ideas.”
parts, anecdotal evidence and a growing body of But these assertions—which are the backbone of
empirical studies seem to point to certain realities: proponents’ arguments for mixed-income hous-
• Mixed-income neighborhoods alleviate the ing—are not supported by all housing policy
adverse effects of high concentrations of experts. According to the findings of a 2002 report
poverty, including negative behavior; and by Alastair Smith, who wrote the paper as a Master
• Mixed-income neighborhoods offer more life of Public Policy candidate at the Kennedy School of
chances and encourage positive, upwardly Government of Harvard University, mixed-income
mobile behaviors. housing doesn’t necessarily alleviate poverty and
“There are two categories of responses when the effects typically associated with it. While admit-
addressing the question of the necessity of mixed- ting to a scarcity of empirical data to support either

24 ON COMMON GROUND WINTER 2007 Oak Hill, Pittsburgh, Pennsylvania WINTER 2007 ON COMMON GROUND 25

Mixed-income housing should be
developed as a broader social goal.
camp’s assertion, Smith’s report references studies Kansas City were studied, each with a differ-
that are inconclusive at best with regard to the role ent mix of incomes; residents interviewed gen-
that mixed-income housing plays in healing the rift erally described “low or very low levels of
between the haves and the have-nots in America neighboring, even lacking the ability to name
today: their immediate neighbors.”
• One study addressed a deteriorating public- It should be noted that the above studies were
housing project in Chicago, which was rede- not performed in comparison to conventional sub-
veloped into Lake Parc Place; only moderate urban developments (CSDs); i.e., no interviews
levels of interaction were found among resi- were conducted to demonstrate the level of interac-
dents after redevelopment; tion among neighbors in the same regions’ CSDs.
• Various developments in New York City, Few Smart Growth or New Urban practitioners
Boston, Chicago and the Bay Area of would claim that mixed-income housing is a silver
California were studied; interaction between bullet that will solve the ills of the ever-widening
income groups was “unclear” or “difficult for income gap in the U.S. Indeed, any type of housing
the authors to gain;” and project often takes years, even decades, to come
• Seven other mixed-income developments in into its own and become the best—or the worst—it
Boston, New Haven, Conn., San Francisco, can be. But a growing number of projects funded
Oakland, Montgomery County, Md., and with a wide range of public and private moneys are
providing environments that encourage economic,
social, mental, physical and even spiritual well-
Oak Hill, Pittsburgh, Pennsylvania
being for their residents.

Tools of the trade
Creating this income diversity comes at a cost.
“The idea of mixed-income housing goes against
the land market in America; it’s radically different,”
says Talen. “We can’t just expect that if we build
free-market housing, things will work out [for low-
income families]. Most of the time, mixed-income
housing is accomplished using outside money.”
That funding can come in dozens of forms,
including city funds, local or housing authorities,
corporations, private foundations, housing advoca-
cy groups and other related nonprofits, low-income
housing tax credits, or a federal source, such as the
HOPE VI program, which aims to fund projects
that provide a mix of public housing, affordable
housing and market-rate housing. Mixed-income
housing projects that don’t use some form of public
funds are
Crawford Square, Pittsburgh, Pennsylvania extremely rare;
even those that
purport to be
These purely market-
neighborhoods based usually
have benefited
provide cross- from some form
of taxpayer
fertilization of funding during
their financing
cultures and ideas. stage.


It’s development where
almost anybody can live.
Playing by the “rules” of the market years to com-
But market-based projects do exist; from the plete. The
small to the large. master plan
Throughout our nation’s housing history, the for this proj-
individual homeowner had the right idea. ect calls for diverse housing types that include
Homeowners knew their neighborhood and their townhouses; three, four, five and six flats; and mid-
community’s housing market. They knew how to rise buildings. More than 1,300 units will be built
tap into their property value—that if they convert- as part of the plan for Stateway redevelopment. In
ed their houses’ upper floors into affordable apart- the end, Stateway Gardens will offer 439 units at
ment flats or built an additional unit over the market rate, 437 units as affordable housing and
garage, there were plenty of people willing to rent 439 public housing units.
from them. These accessory dwelling units (ADUs),
traditionally known as granny flats, supplemented Power of partnership
income and made for a nice retirement income dur- Developer and property manager McCormack
ing the 1940s and 50s. ADUs naturally promoted Baron Salazar (MBS), based in St. Louis, Mo.,
mixed housing and offered affordable housing for takes a “team” approach when building and revi-
working-class families. Today, these types of units talizing mixed-income neighborhoods. For more
are making a comeback. Homeowners still find the than 20 years, the firm has worked with residents,
extra income appealing and developers are includ- neighborhood groups, financial institutions, foun-
ing them in Smart Growth plans. Communities and dations, state and local governments and federal
cities across the country are finding these units an agencies, pulling together funds and nurturing
appealing option to meet higher-density require- political will to create better neighborhoods that
ments and to promote the diverse neighborhoods bring together residents from virtually every eco-
many homebuyers would like to see return and nomic stratum.
now seek out. “From a market perception, it’s development
Market–based, mixed-income projects exist on a where almost anybody can live,” says Executive
larger scale as well. One such effort, Stateway Vice President Vince Bennett. “[The mix of housing
Gardens, developed by Stateway Associates LLC, is options] helps us to avoid the perception that a
located on the western edge of Chicago’s development is only affordable product. Plus, all of
Bronzeville community. The 33-acre Stateway site our units have market-rate amenities, so the conti-
was originally built in 1958, and consisted of 1,644 nuity of quality is maintained throughout the
public housing units in eight high-rise buildings. development.”
Only two of these buildings are left; they currently McCormack Baron Salazar developed the first
house about 600 residents and will eventually be HOPE VI project, Centennial Place, in the down-
demolished. The first six buildings to be demol- town commercial district of Atlanta, Ga., using a
ished will be replaced by a lower density, mixed- mix of funds from HOPE VI, local city/state funds,
income community. private equity and a first mortgage. Begun in 1996
The redevelopment plan for Stateway Gardens is Centennial Place is nearing completion with four of
divided into four phases and will take up to six its five phases out of the ground. It replaces the


Mixed-income
housing provides
choices for persons
of all incomes and
stages of life.

Park DuValle, Louisville, Kentucky

aged Techwood Homes (built in 1936) with a
neighborhood that provides 40 percent of its hous-
ing to market-rate buyers, 40 percent to public
housing residents and 20 percent to tax-credit
investors—investors who purchase tax credits from
the original holder of those credits, often a develop-
er, for a to-be-determined sum on the dollar. For
example, a brokerage firm could be a tax-credit
investor. The tax credits generate equity in a deal;
the investor purchases the credits by putting capi-
tal—i.e., cash—into the partnership.
“We typically go into difficult-to-develop areas,”
says Bennett. “That’s our niche.”
Democratic treasures
One such project is Pueblo del Sol, a mixed-
income housing development in Los Angeles, Calif. “Mixed-income housing provides choices for
A joint effort between MBS, The Related persons of all incomes and stages of life to live in a
Companies of California, The Lee Group, Inc. and community from childhood to retirement,” says
the Housing Authority of the City of Los Angeles, Donald Carter, president of Urban Design
Pueblo del Sol marked a turning point in the his- Associates (UDA) in Pittsburgh, Pa. “They are a
toric east Los Angeles neighborhood of Boyle historic American tradition and a democratic treas-
Heights. Previously occupied by the Aliso Village ure. They work.”
public housing complex, the That passionate philosophy has played out in
site had deteriorated two UDA projects in particular. Pittsburgh’s
beyond repair. Pueblo del Crawford Square is one of many steps toward
Sol now offers an attractive rebuilding Pittsburgh’s Lower Hill District. A suc-
mixed-income community cessful rebuilding of a residential neighborhood,
consisting of 377 rental Crawford Square is a low-income housing tax cred-
units and 93 home owner- it project that is 50 percent tax credit and 50 per-
ship units. On the rental cent market rate. Even though more than 50 per-
side, 60 percent is public cent of the units are subsidized, no visual distinc-
housing; 40 percent falls tion is apparent in either the architecture or the
under the tax credit and character of the neighborhood. A total of 500 units
affordable housing umbrel- of mixed-income housing have been built here,
la. On the housing for-sale including a mix of rental and for-sale units, with a
front, 70 percent is market wide range of prices.
rate and 30 percent is pub- In Louisville, Ky., the Park DuValle neighbor-
lic. The neighborhood also hood is an even more visually arresting story. Once
includes two community dominated by 1,100 public housing units, vacant
centers, plus proximity to an land and abandoned houses, Park DuValle has
elementary school and a become a stable, mixed-income community. A total
future MTA Gold Line (light of 513 units of mixed-income/mixed-finance rental
rail) stop and a proposed units and 341 home ownership units have been
Capitol Hill, Washington, D.C. built or are under construction.
new high school.


Capitol Hill, Washington, D.C.

Park DuValle has attracted a wide range of
income levels. Market-rate units are immediately
adjacent to rental houses, with a high percentage of
low- and very-low-income families. But most
importantly, the development has changed the
image of the larger area in which it is located, from
one of abandonment and decay to that of a vital and
desirable neighborhood. As a result, adjacent
neighborhoods are experiencing revitalization,
and, for the first time in generations, new retail and
community services are being attracted to the area.
This kind of success doesn’t just happen, says
Carter. “A mixed-income project requires multiple
sources of financing, including traditional bank
financing, tax credits, state housing loans, and phil-
anthropic grants and loans. In terms of management, They [mixed-income
the two principal concerns are high-level mainte-
nance of the property and screening of residents.”
neighborhoods] are a
Transforming the troublemakers
historic American tradition
Allequippa Terrace was Pittsburgh’s largest and and a democratic treasure.
most troubled housing project. Its original 1,799
units were one-third vacant, physically deteriorat- The Townhomes on Capitol Hill vary from two to
ing and crime-ridden. Enter Corcoran Jennison four stories, which maintains architectural consis-
Companies (CJC), a Boston-based developer that tency with the range of building dimensions in the
partnered with Beacon Companies and the Capitol Hill Historic District. And the project,
Allequippa Terrace Resident Council to redevelop designed by Weinstein & Associates architectural
the community. The result: Oak Hill, which firm, based in Washington, D.C., looks as good as it
includes mixed-income family rental housing and a lives. Its handsome brick facades earned it the
major reconfiguration of the street plan, which American Institute of Architects’ Honor Award for
opens the community to the surrounding neighbor- Urban Design Excellence and the Urban Land
hood. Additional off-site home ownership opportu- Institute Award for Excellence.
nities for residents help to reinforce the city’s efforts
to stabilize neighboring communities by improving The final measure
the existing housing stock for occupancy.
Presently, the promise of mixed-income housing
Funded in part by a HOPE VI grant, the city of
has not yet been fully realized. We don’t know
Pittsburgh, low-income housing tax credits and the
beyond a reasonable doubt how much better design
Urban Redevelopment Authority of Pittsburgh, the
and integrated price points contribute toward
82-acre project will offer 816 rental units and 275
improved behavior, interpersonal connectivity and
home ownership units at its completion. By the end
upwardly mobile economic positions in life.
of 2006, a new community center will be complet-
However, urbanism is not a quick fix. Often, it
ed in cooperation with the Pittsburgh Housing
can take decades to plot a new course and steer in
Authority.
a new direction the massive machinery of develop-
In Washington, D.C., CJC transformed the for-
ment and social detriments it sometimes brought.
mer Ellen Wilson public housing project into 134
After all, it took decades to get it moving on its cur-
limited-equity, cooperative residential units called
rent course. Still, having seen and experienced
The Townhomes on Capitol Hill. Located in the his-
what the first attempts at public housing have
toric neighborhood of Capitol Hill, the Ellen Wilson
engendered, revisiting a mixed-income model of
project was condemned in 1988. In 1991, a group of
development seems the wisest approach, one that
neighbors and business people formed the Ellen
will help to reintroduce an element that has been in
Wilson Community Development Corporation and
short supply in low-income housing projects for
began the site’s redevelopment in 1997. With $26
decades: hope.
million of HOPE VI grant money, CJC undertook
the project as development advisor and handled Jason Miller is a freelance writer, editor and publishing
the construction, marketing and management of consultant based in Concrete, Washington.
the community.


Pros
W
orking as a firefighter, school teacher, retail
salesperson or entry-level professional has never
been considered dishonorable in America.
Wanting to live in a healthy community with access to the
best jobs, schools, cultural activities, transit and more has
always been viewed as a worthy pursuit in this nation.

VS.
But with a vast number of jobs offering middle to low
wages and a great amount of new housing being built in
price ranges reachable by only the middle and upper class,
the gap between workforce wages and desirable neighbor-
hood affordability is widening each day.
From large urban centers to new growth areas, the police
officer and the other backbones of the workforce cannot
begin to dream of buying even a one bedroom condo or a
small cottage.
To try to level the playing field, hundreds of cities have
created inclusionary zoning (also known as inclusionary
housing) as a way to create a percentage of affordable units
intermingled with the market-rate units and their skyrock-
eting price points.
Inclusionary zoning has dozens of forms, but most typi-
cally a development with a certain threshold of units—often
10 or more—is required to offer affordable units—usually 15
percent—to households earning roughly between 60 to 120
percent of the area median income.

CONS
Smart Growth experts debate
inclusionary zoning strategies
in an effort to win diverse
affordable neighborhoods
By Steve Wright


Sacramento, California

Inclusionary zoning is the means to
preserving a healthy mix of diverse incomes,
ethnicities and workforces.
Quite often, such mandatory inclusionary hous- than approximately 11,000 affordable units since its
ing requirements come along with developer program began in 1974.”
incentives such as increased density, expedited Derek Camunez, president elect of the Denver
permitting and reduced or waived inspection fees. Board of REALTORS®, is not sure inclusionary zon-
To some, inclusionary zoning is the means to ing mandates are addressing the affordable hous-
preserving a healthy mix of diverse incomes, eth- ing problem.
nicities and workforces in increasingly pricey “We believe that mandating affordable housing
municipalities. is not nearly as effective as providing builder
To others, inclusionary zoning is an impediment incentives such as tax breaks, creative zoning for
to growth, an interference with the free market and higher densities and speeding up the permitting
an exceedingly expensive cost-per-unit way of inte- process for providing access to affordable housing,”
grating lower incomes into high land-value areas. he said.
Susannah Levine and Adam Gross of Chicago’s “Denver’s annual report on the inclusionary
Business and Professional People for the Public Building Ordinance is finding that the affordable
Interest believe in the power of inclusionary hous- housing stock is not significantly increasing.
ing. Moreover, the city is discovering that they are not
“Inclusionary housing is an extraordinarily effec- getting the desired cross-cultural families taking
tive and efficient way for cities to create affordable advantage of this housing stock that they had
housing,” they said. Author, consultant, former mayor hoped.”
of Albuquerque David Rusk has calculated that if the Thomas M. Menino, serving his fourth term as
100 largest metropolitan areas in the United States mayor of Boston, believes inclusionary zoning is
had adopted typical inclusionary housing programs working in his historic, densely-developed and
(a 15 percent set-aside on 10 or more units), between very pricey city. Since 2000, Boston has used inclu-
1980 and 2000 those 100 programs would have pro- sionary zoning to foster economic diversity through
duced 2.6 million affordable units. That’s almost affordable housing.
twice as many units as were built using the most pro- “Neighborhoods accept them well and they are
ductive federal affordable housing program, the Low well scattered about,” Geoffrey Lewis, a project
Income Housing Tax Credit. Montgomery County, manager with the Boston Redevelopment Authority,
Md., which has the longest-running inclusionary said of market-rate buyers’ willingness to have
housing program in the country, has created more affordable units created next to them.


City leaders realize a strong middle class
is going to be important to the
continued vitality of Boston.
“Our mayor wanted economic diversity through- In Sacramento, where the percentage of afford-
out the neighborhoods,” he added. “They (city able homes fell from a high of 70 percent to a recent
leaders) realize a strong middle class is going to be rock-bottom low of less than 10, inclusionary zoning
important to the continued vitality of Boston. The is applauded. Desmond Parrington, a planner with
political leadership has been very strong. It under- the city of Sacramento, said nearly 2,000 affordable
stands that if we don’t get housing costs under con- houses and rental units have been created through
trol, it will be detrimental to our economy.” the capital city’s inclusionary legislation.
Lewis cautioned that inclusionary zoning The city’s Mixed Income Ordinance, created in
requires a strong housing market to make it work, 2000, seeks to “prevent segregated communities
noting “if the market isn’t strong, developers will through economic integration.” It also “aims to
look at inclusionary as the thing that’s killing the provide affordable housing that fits the character of
project.” market-rate neighborhoods.” The ordinance
In Housing Supply and Affordability: “Do
Affordable Housing Mandates Work?” published by
the Reason Public Policy Institute and funded by a
grant from the Home Builders Association of
Northern California, researchers Benjamin Powell
and Edward Stringham found data that suggests
inclusionary zoning is a failure in Northern
California because it:
• Produces few units. “The 50 Bay area cities
with inclusionary zoning have produced fewer
than 7,000 units.”
• Has high costs. “The total cost for all inclu-
sionary units in the Bay area to date (is) $2.2
billion.”
• Makes market-priced homes more expensive.
“In high market-rate cities … inclusionary
zoning adds more than $100,000 to the price of
each new home.”
• Restricts the supply of new homes. “In the 33
cities with data for seven years prior and seven
years following inclusionary zoning, 10,662
fewer homes were produced during the seven
years after the adoption of
inclusionary zoning.”
• Costs government revenue.
“The total present value of
lost government revenue
due to Bay area inclusionary
zoning ordinances is
upwards of $553 million.”
Although some builders and
researchers are skeptical of inclu-
sionary zoning’s impact on the
free market, more cities are
enacting inclusionary ordinances
each year. While the San
Francisco Bay area homebuilders
are chafing at the affordable
housing requirements, another
urban center in California is Hollywood Palms,
championing its inclusionary San Diego, California
housing model.


The program has been
successful at creating new
mixed-income communities.
requires that “The biggest pitfall is pushing income limits
any new resi- down too low,” McIlwain said. “The advice I can
dential devel- give is [to use inclusionary zoning] for working
opment of 10 people, the workforce earning 80 to 100 percent of
or more units area median income. Some other program can then
include an be created to address affordable housing needs of
affordable people below 80 percent of median income.”
component. Most experts agree that it is more difficult to
“[The pro- make inclusionary housing work in dense urban
gram] has areas that are mostly built out. If the city is desir-
been success- able and rapidly redeveloping, the premium on
ful at creating buildable land drives the price up so high that it is
new mixed- very difficult to squeeze in affordable housing. If
income communities that might not otherwise be the city is stagnant or perceived as undesirable,
created when new housing is built, due to the high any additional requirements, such as inclusionary
price of land and construction costs in California,” zoning, may serve as a deterrent to much-needed
Parrington reported. urban reinvestment.
“It ensures that there are lower-income units Inclusionary requirements work best in new
that are part of market-rate developments and that urban growth areas, producing the success stories
those units are built concurrently with the rest of of Montgomery County, Md., and more recently, in
the project.” Southern California.
John McIlwain, a senior fellow at the Urban In San Diego, a voter-approved initiative made
Land Institute, believes inclusionary zoning is a affordable housing a big part of the development
piece of the puzzle, but not the complete solution. plan for the urban growth area to the north of the
He agrees with homebuilders that more affordable core city. In that low-rise growth area, which start-
housing is created through density bonuses than ed being developed in 2003, 20 percent of the hous-
strict inclusionary requirements alone. ing must be affordable.
“It won’t produce the amount of affordable hous- Todd Philips, director of the San Diego Housing
ing that’s needed by a long shot, but it’s still a very Commission’s Policy and Public Affairs
valuable tool if it’s done right,” he said of inclusion- Department, said the inclusionary zoning program
ary zoning. for the north growth area has created nearly 1,000
McIlwain said cities start with the premise that affordable units and has a goal of creating another
inclusionary zoning will provide affordable hous- 1,000 before build out is completed.
ing without hurting the market. He said that is true
in two circumstances:
1. A market so strong, that inclusionary housing
can be imposed on developers and they will
still make a lot of money.
2. The more likely scenario that the city gives
developers something in return to offset the
loss of profits associated with selling units
below market price.
“In most cases, bonus density is the key. That’s
one way a city can do it without spending money,”
he said.
McIlwain said because high-rise condominiums
are so expensive to build, it is often difficult to create
affordable units within them. He also cautioned that
a low-income family will not be able to keep up with
the high monthly fees levied by high-rise condos.

Rancho Del Norte,
34 ON COMMON GROUND WINTER 2007 San Diego, California

On Common Ground: Winter 2007

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