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How to make inclusionary zoning actually inclusive

Opinion: Columns

February 5th, 2019 11:37 AM

The Oak Park Village Board will talk about creating an inclusionary housing ordinance to provide affordable units in new developments or money to help fund them elsewhere. Meanwhile, an all-affordable housing development (above) has been approved for the corner of Oak Park Avenue and Van Buren Street. (Image courtesy of The Community Builders, Inc)

By Daniel Lauber

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Next Monday the Oak Park village board will discuss a draft inclusionary zoning ordinance from staff not supportive of inclusionary zoning. It's important that the trustees and the public understand the key elements needed for an effective inclusionary zoning ordinance.

Inclusionary zoning gets housing built without any taxpayer subsidy that households of modest incomes (teachers, retired seniors, nurses, small business owners, first responders, librarians, village staff, recent college graduates, physical therapists, etc.) can afford, namely housing that costs them less than 30 percent of their monthly income.

Nearly every multifamily development proposal in Oak Park has sought to include more units than the underlying zoning allows. So developers enter ill-defined negotiations with the village to exceed this number. Lacking an inclusionary zoning ordinance, Oak Park has painfully failed to get much affordable housing included in these new developments in which most Oak Parkers couldn't afford even a studio apartment.

An effective and legal inclusionary zoning ordinance, establishes a formula that permits a developer to exceed the number of units the zoning permits so that:

20 percent of all the units in the development are affordable to nurses, retired seniors, teachers, and others of modest income at no cost to taxpayers, and

The developer gets to build more market rate units than the underlying zoning allows.

The result is that affordable units are built without any taxpayer subsidy, the developer makes a larger profit, and greater property tax revenues are generated. Instead of having to enter arbitrary negotiations with the village, an effective inclusionary zoning ordinance gives prospective developers certainty as to how many affordable units they must produce to receive zoning approval.

 

Essential elements

To be effective, Oak Park's inclusionary zoning needs to:

Apply to all new construction that exceeds the number of dwelling units the zoning ordinance permits as of right. Legally, inclusionary zoning can be required only when a development exceeds the density the zoning ordinance allows as of right.

Include a formula that enables the developer to build more market rate units than the underlying zoning allows while requiring that no less than 20 percent of all units be inclusionary, affordable dwellings.

Maintain affordability for at least 99 years, with village options to renew. The affordable housing crisis won't end in our children's lifetimes.

Establish "in lieu payments" that are at least as great as the cost of building a new unit, currently $365,000, and with increases over time. A core goal of inclusionary zoning is economic and racial integration which is not achieved when a developer makes "in lieu" payments rather than include affordable units. Too many inclusionary zoning codes like Evanston's, require a "in lieu" payment much lower than the cost of building a new unit, removing any incentive to build an economically and racially integrated development.

Require annual reporting of racial composition like the village did for decades along with inclusionary, affirmative marketing.

Be mandatory. Voluntary inclusionary zoning consistently fails to produce affordable units.

Apply to the entire village; greater profits under inclusionary zoning should attract new construction to difficult to develop areas.

Place limits on resale prices of inclusionary condo units to keep them affordable to the same targeted income group.

There are a slew of other policy choices that make for effective inclusionary zoning. These policy decisions should have been made before staff was instructed to draft the ordinance.

A responsible village board will take the time to fully air and discuss these policy decisions with the public rather than rush to a vote.

Daniel Lauber, AICP, is a former Oak Park senior planner.