CAMBRIDGE, MA - Inclusionary housing, a policy by which developers provide for the construction of affordable housing, can be used effectively to reduce economic segregation at a time of rapid gentrification in neighborhoods across the United States, according to a report published by the Lincoln Institute of Land Policy. And it can be deployed while avoiding the negative economic impacts and legal concerns often cited by critics, according to the report.
"In hot-market cities, skyrocketing housing prices push middle class and low income residents far away from well-paying jobs, reliable transportation, good schools and safe neighborhoods," said Lincoln Institute President George W. "Mac" McCarthy. "Inclusionary housing alone will not solve our housing crisis, but it is one of the few bulwarks we have against the effects of gentrification—and, only if we preserve the units that we work so hard to create."
The report, Inclusionary Housing: Creating and Maintaining Equitable Communities, charts a path forward for local policymakers who are grappling with the effects of gentrification, but who are wary of overburdening developers, impeding new housing construction, or inviting legal challenges. Through a review of literature and numerous case studies, author Rick Jacobus offers solutions for overcoming the major political, technical, legal and practical barriers to the adoption of inclusionary housing.
"More than 500 communities have used inclusionary housing policies to help maintain the vibrancy and diversity of neighborhoods in transition, and we've learned much along the way," Jacobus said. "Research shows that if programs are thoughtfully designed and implemented, they can be a valuable tool at a time when affordable housing is desperately needed."
Inclusionary housing is a strategy that taps economic gains from rising real estate values to create affordable housing. Many inclusionary policies require a certain percentage of residential units in new developments to be affordable to lower-income residents, while others rely on developer fees, or provide for the construction of off-site affordable housing.
Chief among the concerns citied by critics is the potential for inclusionary housing to impede new construction by making development less profitable. However, many cities have avoided such impacts by allowing flexibility in how developers comply and offering incentives, such as the ability to build at greater densities, according to the report.
Some of the key findings and recommendations in the report include:
Contrary to popular perception, rapid construction of market rate housing actually fuels the need for more affordable housing by changing the character of neighborhoods.
The most successful policymakers have built public support and worked closely with private developers in the crafting of inclusionary housing policies.
Offering flexibility and incentives to developers can prevent negative economic impacts, but these tools need to be used judiciously.
Inclusionary housing has been challenged in court, but programs can be designed to minimize legal risks.
Follow-up, in the form of enforcement and stewardship, is critical. Some communities have created thousands of affordable homes, only to see them disappear after subsequent sales.