Challenges

Misconceptions. The strongest opposition to an IZ policy comes from private developers, the real estate community and public officials opposed to affordable housing. Some of the arguments made against inclusionary zoning include:

• IZ Dampens Private Development. David Paul Rosen and Associates' recent, long-term study of the impact of California inclusionary housing programs on market rate housing production found that not a single program had a negative effect on housing production.  In fact, most jurisdictions with inclusionary programs saw an increase in housing production (sometimes dramatically). The longitudinal analysis examined data on annual housing starts over a twenty-year period (1981-2000) for 28 cities with inclusionary housing programs in Orange, San Diego, San Francisco, Los Angeles, and Sacramento counties, as well as for the state in general. The effect of inclusionary programs was compared to the effects of other variables, namely changes in the prime rate, the 30-year mortgage rate, the unemployment rate, the area median home prices, and the 1986 Tax Reform Act.
• IZ Commits an Illegal "Taking". Some argue that inclusionary zoning is a form of "taking" since the requirements to construct affordable units diminish profits. The Home Builders Association of Northern California sued the city of Napa on these grounds in September of 1999. The court found in favor of the city, stating that the incentives offered by the inclusionary zoning ordinance (as well as the possibility of a waiver in cases of extreme hardship) provided enough benefits and options to developers that the ordinance could not be considered a taking. The Home Builders Association did not appeal the case. The lesson is that various forms of compensation granted to developers offset the costs associated with producing affordable units. See: Home Builders Association of Northern California v. City of Napa
• IZ Promotes Over-Development and Congestion .  Another contention is that density bonuses produce over-development and congestion. There is no evidence that inclusionary zoning has produced such negative effects. An effective counter-argument is that IZ policies promote reasonable density in development, leading to less sprawl and the preservation of open space.
• Private Developers Are Not Responsible for Producing Affordable Housing . Opponents argue that the production of affordable housing is the responsibility of the public sector, and that inclusionary zoning unfairly shifts this responsibility to the private sector. Important counter-arguments include that developers benefit from public investments in infrastructure, and they receive compensation for developing affordable units.