Affordable Housing Not Inclusive What's happened to the cornerstone of Adrian Fenty's housing strategy?

IZ Does It: Fenty is moving slowly on affordable housing regs, perhaps in deference to the wingtip crowd.
Darrow Montgomery

On Nov. 13, Mayor Adrian M. Fenty went down to the First Rock Baptist Church in Benning Heights to lay out his vision for affordable housing in the city. It was a big moment for Fenty, whose promises to keep a vital middle class in the District made up a big part of the appeal that won him all 142 of the city’s electoral precincts.

In front of a collar-heavy crowd organized by the Washington Interfaith Network, Fenty announced his plans to create some 2,500 housing units for the chronically homeless; to build 500 town homes across the city for residents making less than $60,000 a year, with hundreds more to come; to set up a “SWAT team” to keep low-rent properties and buildings that accept federal housing vouchers from being converted into high-priced housing; and to impose regulations keeping slumlords from converting their buildings into market-rate condominiums.

The announcement won Fenty some great press and plaudits from the ministers and other housing advocates. But there was one thing Fenty didn’t mention: inclusionary zoning.

That’s the hopelessly wonky terminology for requirements to set aside a percentage of units for affordable housing in any new residential development of a certain size. The concept should be no stranger to Hizzoner: His campaign Web site still lists candidate Fenty’s promise to “[m]andate inclusionary zoning.”

“All new development must include a significant portion of affordable housing,” the Web site reads. “Tax incentives for inclusionary development will be a part of our program to achieve quality, affordable housing.”

In fact, it’s a promise that Fenty gave himself a head start on keeping. Late last year, with the mayor-elect still in his Ward 4 seat, the D.C. Council passed a bill requiring the mayor’s office to issue rules for implementing inclusionary zoning. Almost 11 months into the Fenty administration, no such rules have been issued.

The D.C. area has long been a hotbed for inclusionary zoning—that’s “IZ” to planning geeks. Montgomery County passed what’s generally recognized as the first inclusionary housing ordinance back in 1974—the Moderately Priced Dwelling Unit program—and it’s been credited with producing more than 10,000 affordable housing units since. In Virginia, Fairfax County’s had an IZ requirement on the books since 1990, Loudoun County since 1993. But the District itself has yet to get fully onboard.

The D.C. Zoning Commission already requires affordable housing set-asides when approving what are called “planned unit developments”—big projects that require major exceptions from zoning laws. In May 2006, the commission passed a set of guidelines for applying such mandates to all developments of 10 units or more, regardless of whether they require any sort of zoning change. Before any such requirements take effect, however, Fenty’s people have to take action.

As far as some local activists are concerned, the limbo’s gone on far too long. Cheryl Cort, policy director of the Coalition for Smarter Growth and a longtime IZ backer, says she’s “really disappointed” with the holdup.

Cort and other affordable housing advocates, together known as the Campaign for Mandatory Inclusionary Zoning, met with Fenty’s deputy mayor for planning and economic development, Neil Albert, in the spring to discuss getting inclusionary zoning finalized. Albert said the IZ rules would be published by the beginning of fiscal 2008, if not sooner, according to Cort.

Fenty’s fiscal 2008 budget, effective back on Oct. 1, included about $85,000 for an additional staffer at the Office of Planning to review projects for IZ compliance. But that hire has been held up pending the publication of the program rules.

“It was supposed to be ready to go out on Oct. 1, and we still haven’t seen the regulations,” she says.

Why would Fenty want to dither on making inclusionary zoning happen? IZ proponents say to follow the money: Development interests helped finance Fenty’s mayoral run—contributors included big names like Abdo, Donatelli, and Hoffman in either corporate or personal capacities.

The D.C. Building Industry Association (DCBIA), local developers’ main trade group, has been far from excited about any requirement that would hamstring developers. The trade-off at the heart of IZ goes like this: build a few affordable units to sell for less than market rate, and in return, the city will let developers build more units in a given space than they could have under typical zoning laws, allowing them to maintain their profits.

But increasing density is a sure way to get neighbors upset at your project, says Jeffrey Gelman, an attorney at Greenstein, DeLorme & Luchs and chair of the DCBIA’s housing committee. Gelman says the District’s IZ plan may have made economic sense during the housing boom market three years ago, but not today.

And Gelman has the data to prove it—an informal survey of developers recently conducted by the DCBIA: “It just shows an extreme shutdown of their activities due to [mandatory inclusionary zoning].”

“We don’t know how to comply with a program that’s been pending for so long that we can’t quite explain,” he says.

Now that the mayor’s office needs to make the rules work, Gelman says, it’s running into problems. “As we suspected, the administration now has reached out back to us, asking us to get involved,” he says, adding that the city has also contacted “a number of different developers.”

If Gelman sounds concerned, he should be. IZ outfits elected officials with a big foot in the real estate marketplace. In the coming months, Fenty must set maximum prices for the rental or sale of affordable housing units in developments subject to IZ. The numbers might require developers to eat more than $50 per square foot of affordable housing, says budget watchdog Ed Lazere of the D.C. Fiscal Policy Institute. “But if they can get that down to $10 a square foot,” he says, “I’m sure that’s a number they think they can work with.”

Sean Madigan, a spokesperson for the deputy mayor’s office, declined to get into the nature of any discussions the city has had with the development industry.

One thing both fans and foes of IZ agree on: They both can’t wait to see the regs. Says Gelman: “We’ve not seen what the city’s been working on right now.”

“There’s only one more step...and we can’t believe it hasn’t happened yet,” Cort says.

Madigan declines to give a publication date for the IZ rules. “I don’t know that we have a specific timeline,” he says, though he adds that “in the next couple of weeks, we’ll probably have a better sense.”

For the moment, Madigan says, executive staffers are “being pretty cautious” and “sort of taking the temperature” of the market. “We need to be very careful so we don’t stifle the sort of development that might happen [without IZ],” he says.

But don’t doubt the city’s commitment to affordable housing: “Conceptually, I think the administration thinks inclusionary zoning is a good idea,” Madigan says.

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Our Readers Say

The Independent Institute just did a study of inclusionary zoning and found that it has led to 10 percent fewer housing units costing 20 percent more. I doubt fewer homes at even higher prices is what Mayor Fenty had in mind.
Thank you for repremanding the Mayor for his extraordinary delay tactics on inclusionary zoning! I worked with the Campaign for Mandatory IZ for three years and the original program compromised with the reasonable elements of the DC building community to come to an agreed upon program.
Two brief points:
1. IZ will create affordable units with very minimal public financial support, perhaps $1K to $2K per unit. This compares to $50K to $150K of the Mayor's announced program.
2. IZ is the only hope for getting affordable housing in the high income areas of the city, Wards 1, 2, and 3. Isn't diversity and fairness what affordable housing should be about? Tad Baldwin

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