A Final(ish) Note on Inclusionary Zoning

Just when we finally thought the inclusionary housing compromise pushed forth by the Board of Supervisors was signed, sealed, and (eventually) delivered, a raft of last-minute state legislative maneuvers and dubious editorializing emerges to undermine the very concept of inclusionary zoning (IZ) and stymie its effective implementation in San Francisco.

A local pro-real estate blog recently took a swing at this issue by alleging that their bête-noire, SF Supervisor Aaron Peskin, negotiated an increase in the required percentage of subsidized affordable housing not to help families in danger of displacement, but rather to pad his own bottom line as a landlord**. This sort of conspiracy theorizing from groups pushing the editorial line of construction über alles is pretty derivative at this point, but let’s dig into some of the more substantive charges behind opposition to IZ policies.

Claim: With inclusionary requirements, fewer market-rate units are produced than would have been otherwise. Yes. The Berkeley Urban Displacement project estimated that each additional constructed below-market rate (BMR) unit is twice as effective at combating displacement than a market-rate unit. With inclusionary zoning, the level of subsidized affordable housing constructed via requirements on private development is ultimately going to be dictated by developers, who may choose to offset the losses from subsidized rental units by building fewer units than they would have theoretically built otherwise, in return for delivering the affordable units to San Franciscans immediately in danger of displacement. Professional linguists at the Oxford English Dictionary define this esoteric phenomenon as a “tradeoff.”

State Senator Scott Wiener’s recent amendment to Assemblymember Phil Ting’s AB 915 is unintentionally illustrative of how the “private” side of “public-private partnerships” (and their political boosters) can ultimately sabotage permanently affordable construction. The original San Francisco-only bill requires projects that are granted market-rate density bonuses to build additional affordable units so as to pencil out to the locally required percentage. What that means is that a project could build to the 18% requirement and receive a density bonus for additional construction that brings the overall percentage down to an estimated 13%. The original bill would require that this be brought back up to 18%, but Wiener’s amendment allows California to override this back down to 13% should they conclude that any market-rate housing would be lost as a result, despite knowing full well that inclusionary requirements are fundamentally a tradeoff-based policy.

Claim: Inclusionary zoning does not deliver affordable housing at the scale required, even with increased percentages. Also yes! San Francisco’s inclusionary program has produced several thousand units since 2002; when these units come online, the applications can number up to 30, 40, or even 50 applicants per unit.

Unfortunately, many inclusionary opponents look to the overriding power of state legislation to force construction in rich, exclusionary neighborhoods, which sounds great until you realize that their efforts will also undermine input from tenants in working-class neighborhoods who use community approval mechanisms to push developers for more subsidized affordable units. Some inclusionary opponents are also funded or supported by interests that stand to lose big money in a scenario where the public, fed up with compromises that result in fewer affordable units, could acquire land and oversee the construction of larger-scale publicly controlled below market-rate housing.

Without concurrently pursuing effective tenant power and land use democratization as political goal, many IZ opponents are ultimately aligned with those already poised to capitalize off the revaluation of existing land; suffice it to say these interests are not going to prioritize equity over profitability. Much of the recent political dialogue around upzoning proposals in San Francisco’s west side falls into this trap, with the ultimate result of taking land from (sometimes) well-off homeowners to give to even-more-well-off developers, with no concurrent planning to ensure that the new community will be in any way affordable or inclusive beyond a reduced percentage of affordable units.

Claim: There are other solutions that would work better to construct affordable units. Yes! Unfortunately those solutions require funding, and while seeking additional funding is an immediate necessity, we are still operating in a climate where HUD is facing $7 billion in cuts from the Trump administration. California state law, meanwhile, prohibits the levy of local income taxes that could fund local affordable housing. On top of these obstacles, enough money must be raised via taxation for municipalities to compete with the entire private market, local and international, to acquire both land and pre-existing housing.

Inclusionary zoning policy is but one ameliorative tweak to a housing-for-profit system that needs deep structural change. It is, unfortunately, considered the most viable option in a post-Reaganite ideological climate that prefers public-private partnerships such as IZ and density bonuses over truly democratized land use policy via collective forms of ownership and development. Inclusionary zoning units pegged to area median income (AMI) can also exclude low-income tenants since the area used for the calculation is usually metro area-sized and includes richer locales. In a gentrifying neighborhood where AMI sharply rises, AMI-pegged housing policy can run the risk of shutting out the very people it aims to protect.

Claim: We don’t need IZ. Upzoning for density in and of itself would create more integrated and affordable neighborhoods. NOPE. Zoning changes are not in and of themselves guarantors of affordability, let alone justice, in housing. Upzoning without planning for racial and economic justice won’t deliver us into a mixed-income urbanist utopia either, as much as many market urbanist types would like to think they do. Tenants who still have access to limited Section 8 funding often find they are excluded from residence in up-and-coming neighborhoods due to rampant discrimination, as the exclusionary redlining of the past (strategic disinvestment from urban neighborhoods, especially communities of color) gives way to the exclusionary bluelining of the present (strategic investment in those same communities to push those same residents out of now-desirable cities, in favor of attracting wealthier, and usually whiter, ones). Veteran urban planner Peter Marcuse outlines this in discussing the social and personal ethics of gentrification:

Rezoning a particular area to allow more housing to be built in such fashion that the net proportion of higher income households is significantly increased in the community, displaces families, both on the parcels on which it is built, and those priced out of the community by the impact of increased land values resulting from the new construction for the richer will further, not reduce, segregation as the net result.

Ultimately, IZ is not in and of itself a solution for the equitable distribution of housing. Still, beware of snake oil salesmen prioritizing ostensibly “progressive”, colorblind, class-blind, and deregulatory policy over the immediate construction of affordable units. Any attempt to coax equitable outcomes from the for-profit housing market necessitates tradeoffs; the idea that San Francisco’s working class should be denied viable opportunities for subsidized housing today to build the maximum theoretical amount of unsubsidized housing tomorrow isn’t just logically unsound but morally irresponsible.


**(Editorial disclaimer: This author was involved with Supervisor Peskin’s 2015 campaign, but was sadly ineligible to attend the Secret Landlord Conspiracy Committee as s/he is a tenant).


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