Comments on: Why Inclusionary Zoning Isn’t Working Yet

By: Shiv Newaldass

Shiv Newaldass — Thu, 07 Jun 2012 14:04:31 +0000

If the intent of a policy is to preserve a unit permanently, then make them all rental or as the last commenter suggested. But to guise this as homeownership does not help anyone. It hurts all parties involve and this unfortunately is becoming a hard reality that the District will have to face. With limited appreciation further diluted by escalating condo fees and other expenses, permanently restricted for-sale units aren’t very appealing.

Affordable homeownership opportunities only account for less than 5% of the affordable housing stock in the District. Co-ops, Land Trusts, Rental, and other types make up the lion’s share of the Continuum of Affordable Housing Options. Allowing some low and moderate income families the opportunity to build wealth is the only way the District will help move people up the socio-economic ladder. Manna has suggested a subsidy recapture and recycle model to account for any difference in market price and affordable price, so that there is no windfall profit given to the buyers. They simple will get whatever the normal appreciation is over the initial market price, just like everyone else. It is the fairest way to help families grow. More information can be found here: http://www.hatdc.org.

By: R.U. Seriousing Me?

R.U. Seriousing Me? — Thu, 07 Jun 2012 13:09:41 +0000

The greatest benefit to the owner of an IZ unit is that he can live in a neighborhood he otherwise wouldn't be able to afford. Condo fees and individual unit maintenance costs rise over time, counteracting the capped appreciation of the unit's value. The tax benefits of homeownership are minimal for low/moderate income households.

In my ideal scenario (which could only function in an alternate universe with more policy flexibility), the Housing Authority would purchase and operate these units.

By: Richard Layman

Richard Layman — Thu, 07 Jun 2012 11:23:16 +0000

another good, important piece, and good comments too. You weren't here during the IZ advocacy campaign. My problem with IZ isn't IZ per se, just that impacts such a small portion of the housing market. Coops, land trusts, and just greater production--some of the things mentioned by the commenters--ought to be combined into an integrated program and plan for housing ownership diversity.

By: Alex B.

Alex B. — Wed, 06 Jun 2012 21:34:21 +0000

Co-op resident,

The challenge is that with owned housing, you can't both preserve the affordability of the unit when that unit turns over while still allowing the owner to realize the appreciation. If the owner sells and realizes the appreciation, then the unit isn't affordable anymore. That's the policy challenge here.

By: Co-op resident

Co-op resident — Wed, 06 Jun 2012 20:58:45 +0000

I reside in a co-op in Columbia Heights in Ward 1. I think co-ops are a good option for low and moderate income folks; however, I think that just as higher-income individuals have options, so should low and moderate income individuals. I know many lower income DC residents that have purchased homes and condos (in all-affordable condominiums with great management and structures) throughout the city. Most of them received downpayment assistance and went through home counseling programs, and they have been very successful homeowners. I know a mother of 4 who purchased just north of Logan Circle in the early 2000s, a neighborhood that she had lived in for a while at that point. She has been able to stay in a very quickly gentrifying neighborhood, has taken advantage of her stable mortgage to have extra money to go back to school, and is hoping to save towards and use some of her home equity for her children's education and skills advancement. Now, in a co-op setting she would have stability and the opportunity to save, but she wouldn't have access to equity in the same way. Again, I think people should have options.

By: The Practice of Theory « Housing Advocacy Team

The Practice of Theory « Housing Advocacy Team — Wed, 06 Jun 2012 20:31:20 +0000

[...] post today in the City Paper’s Housing Complex contemplates why the only two condo units produced through the District’s Inclusionary Zoning policy have not yet sold. Blame is attributed [...]

By: Alex B.

Alex B. — Wed, 06 Jun 2012 20:28:14 +0000

puzzled,

I think co-ops hold a lot of promise as a mechanism to a) provide affordable housing, b) provide the stability that ownership can offer in high-priced and dense areas, and c) better handle these kinds of challenges of appreciation. Definitely something to look into.

By: puzzled

puzzled — Wed, 06 Jun 2012 20:07:43 +0000

obviously affordable renters are simpler.

In NYC affordable owned housing has been provided in subsidized coops (mitchell lama). Being coops with a collective loan, obviates the banking issues with condos. The owners do not get appreciation, but they get democratic control of the building that they would not get in a rental. Thats the cooperative idea. Not sure if its worth doing with condos.

By: Shiv Newaldass

Shiv Newaldass — Wed, 06 Jun 2012 19:46:43 +0000

Dud- In my experience, low and moderate homebuyers have to go through additional hurdles to purchase a home and folks in Manna’s Homebuyers club spend between 6 months and 2 years working on their credit, on a budget, and setting money aside to assist with a downpayment. For them, a home purchase is the culmination of a lot of work. To take away the upside of owning simply for the sake of being a good location or in an amenity rich area isn’t as appealing.

As for the intentions of the developer, I really think that they are simply complying with the law. It really wouldn’t be that beneficial to hold on to these units and carry the expenses for them as they remain unsold. I think it’s just difficult to sell units with long-term restrictions. Manna mortgage assisted in the lottery for the affordable for-sale units at CityVista and with 2500 hundred applications, hundreds of income-eligible buyers for 89 units, it took multiple rounds and almost 2 full years to sell these units, even when the market rate units were moving like hot-cakes. It was hard to get the appropriate income buyers; then out of this dwindled pool, we had to make sure that they could qualify for a mortgage; then out of this further dwindled pool, we had to make sure they like the place and would purchase the units. The hesitation by many income-eligible, mortgage-ready buyers was the 20 year resale covenant attached to the CityVista units. Just imagine going through this process with the IZ units that have permanent restrictions.

By: dud

dud — Wed, 06 Jun 2012 16:38:38 +0000

So Shiv, what you're saying is that a low-income buyer who would be eligible for one of these homes isn't going to see the benefit of buying a home because they might not perceive home ownership as a perishable risk? It seems to me that developers have always know that, and as a result are not incredibly interested in making their low-come unit obligations equitable for anyone, with the hope that once people stop paying attention, they could find another solution for selling off the unit that might not be entirely within the bounds of the law. I am trying to understand.