Equitable Adaptation Legal & Policy Toolkit

Regulatory Tools for Housing

Regulatory tools like zoning ordinances and building codes, which govern uses of the land and regulate the building of structures, can form part of a comprehensive affordable housing and climate resilience strategy. For example, in Miami, the city’s strategy to address climate-induced gentrification includes the dedication of $100 million for affordable housing (part of a $400 million general obligation bond that funds municipal infrastructure projects)1 and the adoption of inclusionary zoning policies to promote denser development.2

Inclusionary Zoning Programs

An increasingly popular tool for city governments,3 inclusionary zoning (IZ) — also called “inclusionary housing” — generates affordable housing through the private market by requiring or incentivizing developers to designate a percentage of units in new housing projects at below-market rate (BMR).4 The majority of IZ programs are mandatory5 and required by law for developers to set aside affordable units in exchange for subsidies to the developer that can help offset the cost of producing affordable units to low-income households. By contrast, under voluntary IZ programs, developers provide affordable homes in exchange for density bonuses (the right to build larger and a higher number of units above existing zoning regulations), relaxed design guidelines, reduced property taxes, and other incentives.6

Aside from differences in mandatory or voluntary participation, other key distinctions in the design and implementation of local IZ programs may include:7 

  • the type of incentive in voluntary IZ programs (e.g., density bonuses, zoning variances, fee reductions);
  • whether the affordable units are developed on-site or at a different location;
  • the required percentage of affordable housing (most commonly between 10-20 %);
  • targeted income group;
  • whether the program applies to rentals or properties for sale; and
  • the geographic coverage of the program (i.e., whether the program applies to a specific location, housing type, or an entire jurisdiction).

Zoning Ordinances and Building Codes

In addition to IZ programs, cities can also incorporate climate resilience measures in zoning ordinances and building codes to increase the flood-resilience of new housing or retrofitted buildings.8 For example, ordinances may require increasing the freeboard standard for new construction in a 100-year floodplain, or the use of permeable surfaces surrounding the building to improve stormwater management practices. Zoning ordinances and building codes can also be used to prevent development of housing and other structures in flood-prone areas — for example in the floodplain or in-stream buffer zones — or require structures to be built to higher standards to account for future flood risks from sea-level rise. A 2019 study found that for, every dollar invested in adopting model building codes that include climate resilience, the country could save $11 in future disaster costs.9   

Considerations of Regulatory Tools for Resilient Affordable Housing

Economic
  • Developers may pass on the cost of selling or renting units at BMR to renters and buyers. Similarly, IZ policies may lead to a reduction in the construction of new homes. Research on the impact of IZ programs on the private market is mixed, with evidence indicating both a statistically insignificant impact in cities like San Francisco, as well as a correlation with increased housing prices and reduced construction in other cities.10
  • The efficacy of IZ programs is dependent on local housing market conditions. In general, stronger housing markets tend to produce more affordable units under IZ programs than weaker housing markets.11 

Environmental
  • IZ programs can be used to encourage higher density development in areas that are less at risk to climate change impacts, especially under programs that apply broadly across an entire city rather than concentrate on high-poverty areas that are more at risk of flooding and extreme heat.
  • Like other land-use strategies that increase urban density and reduce sprawl, IZ programs also bring environmental co-benefits such as reducing vehicle miles traveled and greenhouse gas emissions.

Social/Equity
  • IZ policies can lead to the creation and preservation of mixed-income neighborhoods by providing low-income residents with opportunities to enter and integrate into neighborhoods with greater economic, education, and employment opportunities.12 In additional economic integration, IZ may also lead to greater racial integration in communities.13
  • Moderately low-income residents, rather than the lowest-income residents, are more likely to benefit from IZ programs since most IZ policies target families that earn between 60 to 120% of the AMI.14
  • Building codes should apply consistently to all buildings within a community in order to avoid leaving behind certain structures and the people who live in them.

Administrative
  • IZ programs require limited to no subsidy from city governments. However, IZ programs are more readily adopted in states that grant home rule (where localities have increased local autonomy) or expressly authorize local IZ programs.15 
  • IZ programs that permit off-site construction of BMR units (as opposed to requiring on-site units) may face less opposition from developers and landowners.16
  • IZ programs are one approach out of many options to address the nationwide housing shortage and should be implemented concurrently with other policies suggested in this chapter. Although the use of IZ has become increasingly popular, the number of affordable housing stock produced through IZ programs varies significantly across jurisdictions.17

Legal
  • IZ programs that are required by law have been shown to produce more affordable housing than programs that are voluntary and incentive-based.18
  • Zoning ordinances and mandatory IZ programs may face opposition from developers and builders who challenge the constitutionality of IZ laws under the takings clause of the Fifth Amendment, which provides that “private property [shall not] be taken for public use, without just compensation.19
  • A zoning or building code may not comply with the American with Disabilities Act (ADA) if it requires the elevation of new construction in a flood zone without also requiring structural modifications (e.g., ramps) that can improve access for disabled persons.

 Lessons Learned

  • IZ programs that encourage developers to build BMR units on the same site as non-BMR units can facilitate better racial and economic integration of residents. Additionally, requiring on-site affordability can help ensure that affordable housing is available in specific areas that enhance access to other resources, for example, green space, public transit, and jobs. On-site development is usually less expensive than other affordability requirements, including building BMR units off-site or contributing to a local affordable housing fund.20 
  • IZ programs that are adopted on a city-wide basis, as opposed to targeting specific neighborhoods, can reduce the likelihood for developers to concentrate the affordable units in neighborhoods that face increased exposure to climate change impacts like flooding, or are far away from public transit and job opportunities.

 

 

1. The City of Miami, Miami Forever Bond, View Source (last visited July 23, 2020). | Back to content

2. Anna Cash et al., Climate Change and Displacement in the U.S. – A Review of the Literature, Urban Displacement Project 25-26 (April 2020), View Source. | Back to content

3. Approximately 70 percent of existing inclusionary zoning programs have been created after 2000. As of 2016, IZ laws have been passed in 866 jurisdictions across 25 states and Washington, D.C. Of these programs, approximately 80 percent are located in California, Massachusetts, and New Jersey. Emily Thaden & Ruoniu Wang, Inclusionary Housing in the United States, Lincoln Institute of Land Policy (September 2017), View Source. | Back to content

4. The price of BMR units is typically determined by the area median income (AMI). The number of BMR units required under an IZ program differs according to the size of the project — generally, projects with under ten units are exempt from IZ requirements, while an increased number of units would trigger proportionally more requirements. Benjamin Schneider, CityLab University: Inclusionary Zoning, Bloomberg CityLab (July 18, 2018), View Source. | Back to content

5. Robert Hickey, Lisa Sturtevant, & Emily Thaden, Achieving Lasting Affordability through Inclusionary Housing 4, Lincoln Institute of Land Policy (2014), View Source. | Back to content

6. Katy Miller, Questions to Consider Regarding Inclusionary Zoning Policy, United States Interagency Council on Homelessness (May 17, 2017), View Source. | Back to content

7. Stockton Williams et al., The Economics of Inclusionary Development, Urban Land Institute (2016), View Source. | Back to content

8. U.S. Envtl. Prot. Agency, Smart Growth Fixes for Climate Adaptation and Resilience (January 2017), View Source. | Back to content

9. Natural Hazard Mitigation Saves: 2019 Report, National Institute of Building Sciences (2019), View Source | Back to content

10. Kriti Ramakrishnan, Mark Treskon, & Solomon Greene, Inclusionary Zoning: What Does the Research Tell Us about the Effectiveness of Local Action? 4 , Urban Institute (January 2019), View Source. | Back to content

11. Robert Hickey, Lisa Sturtevant, & Emily Thaden, Achieving Lasting Affordability through Inclusionary Housing 4, Lincoln Institute of Land Policy (2014), View Source. | Back to content

12. Kriti Ramakrishnan, Mark Treskon, & Solomon Greene, Inclusionary Zoning: What Does the Research Tell Us about the Effectiveness of Local Action? 5-6, Urban Institute (January 2019), View Source. | Back to content

15. Brian Stromberg & Lisa Sturtevant, What Makes Inclusionary Zoning Happen? 3, National Housing Conference (May 2016), View Source. | Back to content

16. National Housing Conference, Inclusionary Housing: The Basics, View Source (last visited July 23, 2020). | Back to content

17. Joe Cortright, The 0.1 percent solution: Inclusionary zoning’s fatal scale problem, CityCommentary (April 25, 2017), View Source. | Back to content

18. Robert Hickey, Lisa Sturtevant, & Emily Thaden, Achieving Lasting Affordability through Inclusionary Housing 4, Lincoln Institute of Land Policy (2014), View Source. | Back to content

19. Kriston Capps, Will the Supreme Court Strike Down Inclusionary Zoning?, Bloomberg CityLab (October 4, 2019), View Source. | Back to content

20. Benjamin Schneider, CityLab University: Inclusionary Zoning, Bloomberg CityLab (July 18, 2018), View Source. | Back to content

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