DC Campaign for Mandatory Inclusionary Zoning

Getting mandatory inclusionary zoning adopted in DC requires a modification of zoning and land use laws. On November 17, 2004 the Campaign for Mandatory Inclusionary Zoning submitted a text amendment to the Zoning Commission that proposes a mandatory IZ policy for the District of Columbia.

Our proposal is well researched, based on an analysis of development patterns and housing needs in the District. It is also informed by a national analysis of inclusionary zoning policies in place in hundreds of communities around the country, the findings of which can be found in the report Expanding Housing Opportunity in Washington, DC: The Case for Inclusionary Zoning. Our policy proposal holds great promise for meeting the affordable housing needs of low and moderate-income families in the District.

Click here for a two-page summary of the policy proposal in PDF format:

Click here for the proposed text amendment in PDF format.

Click here for the report, Expanding Housing Opportunity in Washington, DC

KEY COMPONENTS
Affordable Housing Set-Asides	Inclusionary requirements shall apply to both ownership and rental projects with ten (10) or more dwelling units with the following percentages of units set aside as affordable: 15% of the market rate units for new construction other than mid and high rise structures 12% for mid and high rise structures (defined as buildings of 5 or more stories, of concrete and/or steel frame construction, with elevator service). 7.5% for substantial rehabilitation projects This law would become applicable to developments in the downtown development district, which is currently zoned out to the Congressional height restrictions, as of, January 1, 2008.
Developer Compensation and Cost Reduction Strategies	Developers can elect to take a matter-of-right density bonus calculated at approximately 20% extra FAR, provided through an affordable housing overlay in multi-family zones. In order to reduce housing construction costs and promote less costly transportation alternatives in covered development projects: Condo/cooperative fees should be split to separate out essential building operation and maintenance costs from recreational and amenity costs to reduce the fees for the affordable units. Parking requirements should be reduced and “unbundled” from purchase and rental prices. Developers may use less expensive interior finishes on affordable units.
Income Targeting & Household Selection	Half of units must be affordable to households at 50% of Area Median Income (currently $42,700 for family of four) and half at 80% of Area Median Income ($68,320). To make units affordable to lower income households: • The DC Housing Authority and qualified non-profits have the first right to purchase or rent up to 40% of inclusionary units. • Any of the rental units not optioned by the DCHA or nonprofits that are affordable to households at 50% AMI will be prioritized for a separate lottery of Housing Choice Voucher holders on the IZ waiting list who indicate interest in the units. If there are no voucher holders to rent them, the unclaimed portion of the 40% IZ units would be distributed to the general applicant pool. Residents of inclusionary units shall be determined by lottery based on unit and household size from income-qualified applicants. Residents must recertify their eligibility on a bi-annual basis.
Construction Requirements and Alternatives	Developers are required to build inclusionary units within the larger market rate development. • Production of affordable and market rate units should proceed simultaneously. • Exceptions will be made only when the developer can demonstrate that on-site development would create undue economic hardship. The major examples of hardship include but are not limited to: ? Retirement housing communities with expensive, bundled services, ? Developments with high condo fees that cannot be reduced to “affordable” levels even after non-essential amenity and recreational costs are separated out in order to meet the affordability required for targeted income groups. When exceptions are granted, the administrative agency may authorize the developer to • construct the same number of units off-site, either within the same Ward or within two miles of the development project, or • make an “in-lieu” payment to the Housing Production Trust Fund equal to the difference between the average market price of the unit and the price that would be affordable to a qualified applicant. A developer may apply for an exemption from the requirements of the program where compliance would deprive the developer of all economically viable use of the property.
Design Standards for Inclusionary Units	Affordable units must be similar to and compatible with market rate units in outward appearance and in number of bedrooms, but size of affordable units may be reduced to a minimum standard, e.g. for apartments, the minimum sizes could be: Efficiencies at 450 sq. ft One bedrooms at 600 sq. ft. Two bedrooms at 850 sq ft. Three bedrooms at 1,050 sq. ft. Four bedrooms at 1,120 sq. ft. Townhouse, multiplex, and single family units would generally be larger than these minimums due to developer design and compatibility goals. Interior finishes, appliances, and amenities need not be compatible with market rate units.
Affordability Control Periods	To build a stock of affordable housing, encourage neighborhood stabilization, and promote economic and racial diversity: Owner-occupied affordable units shall be affordable to income qualified families for 20 years, with annual increases in sales prices determined by the administering agency, based upon the Metro Area CPI. Owner-occupied housing sold after 20 years will provide the seller with half the appreciated value of the home that remains after allowing for (1) the increase in CPI multiplied by the cost of the unit for the length of ownership and (2) repayment to the owner for capital improvements. The other half of the proceeds from the sale will flow to the Housing Production Trust Fund to support the production of affordable housing. Rental Housing will remain affordable for 50 years and rents can be increased annually at no more than the increase in the Metro Area CPI. These rate increases will be set annually by the Mayor, based upon recommendations by the Department of Housing and Community Development.
Administration and Enforcement	Qualification, selection, and referral of households to inclusionary units shall be conducted centrally by DHCD, which shall be empowered to administer the IZ policy and appropriately resourced to carry out its responsibilities. A portion of the proceeds from “in-lieu” payments and post-control period resale proceeds flowing to the Housing Trust Fund can be used for the administrative and marketing expenses of running the IZ program. DHCD will monitor effectiveness of IZ policy implementation and report regularly to the Council and the public. Affordability restrictions will be applied through covenants recorded against the inclusionary units.