Mandatory Inclusionary Rezoning Could Solve New York’s AH Problem

New York housing advocates are calling for mandatory inclusionary zoning that requires developers to include affordable housing into new developments.

New York's current inclusionary zoning program is a voluntary, incentive-based program that gives developers the option to build affordable housing in designated areas of the city, or create or preserve affordable housing elsewhere in the community, in exchange for additional building permits, even tax breaks and other city subsidies.

As of today voluntary inclusionary affordable housing represents less than 2% of all multifamily building permit applications in New York.

The voluntary program must be improved, said Benjamin Dulchin, executive director of the Association for Neighborhood and Housing Development, because when the city rezones a neighborhood to include an allowance to build taller and denser, “the value of a developer's land is increased dramatically with the stroke of a pen.”

Rezoning also causes displacement pressures and the loss of rent-regulated housing, he said, so as a public tool that creates private value, “it can, and should, be an effective tool for permanent affordable housing as well."

ANHD and Council Member Brad Lander released two reports that review New York's inclusionary zoning program. While "Creating Affordable Housing Through Inclusionary Zoning in New York City," reviews the performance of the program from its inception in 2005, a ANHD white paper entitled “Guaranteed Inclusionary Zoning: Ensuring Affordability Is a Part New York City's Future,” lays out a road map for policymakers.

The Guaranteed Inclusionary Zoning report outlines a plan to require that all large- and medium-sized developments set 20% of units as affordable housing without accessing city funds. It found that the city could reasonably generate 4,000 affordable units per year by instituting guaranteed inclusionary zoning, which would create approximately 32,000 affordable units over the next eight years.

After implementation on the West Side of Manhattan and Brooklyn waterfront, the study found “the inclusionary zoning program has proven to be an effective and efficient means of generating affordable housing units.” 

It helped increase the stock on the West Side to 19% of total units at 1,441 affordable units, and another 13% of total units in the Greenpoint and Williamsburg areas of Brooklyn, to 949 affordable units.

But very few inclusionary housing units were created in other areas even during significant developments.

"The up-zoning of vast stretches of New York real estate has created a tremendous windfall for developers, many of whom bought and held land in anticipation of exactly this type of massive unearned gains,” said Joan Byron, director of policy at the Pratt Center for Community Development. “Guaranteed inclusionary zoning would ensure that a small fraction of those gains, created by public action, are used to create a public benefit.” Permanently affordable housing and stable manufacturing space help upkeep neighborhoods and their diversity in the long run, he added.

Guaranteed inclusionary zoning is critical to the future of New York’s affordable housing production, agreed Deborah Howard, executive director, Pratt Area Community Council, and at the same time mandatory inclusion of affordable housing into up-zoning or rezoning of areas ripe for development that boost property values enables the private sector to provide “a highly needed public benefit.”