Implications of Land Use Policy on Affordable Housing

8/12/2019 Implications of Land Use Policy on Affordable Housing

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Anthony Gill

Housing and Homelessness Policy

Dr. Elsa Chen

10 June 2014

Implications of Land-Use Planning Strategies on Affordable and Mixed-Income Housing

INTRODUCTION: An Unfortunate ConflictBut Need There Be?

On March 10, 2013, residents of the Winchester Ranch Mobile Home Community in San

Jose, California received one-day notice of a Planning Commission meeting which would

include a discussion of the so-called Santana Row/Valley Fair Urban Village Plan (Save the

Winchester Ranch). The plan was originally intended to unify urban planning efforts in the

vicinity of the popular Santana Row and Valley Fair upscale shopping centers. Instead, due to the

inclusion of the mobile home park, it has become a touchstone of sorts for the ongoing battle

over affordable housing and gentrification in the high-tech, high-income Silicon Valley region.

Understandably, residents, mostly low-income or disabled seniors, were livid. By

including the park in the urban village plan, the City of San Jos dramatically increased the value

of the property, virtually guaranteeing that it would be redeveloped. By July, the owner, Cali-

Arioto Properties, was in talks to sell to market-rate developer Pulte Homes, with the expectation

that the seniors would be evicted with little to no assistance in relocation (Bigler). Residents and

affordable housing advocates exerted more pressure, and by April of 2014, the city was

considering a moratorium on mobile home conversions to allow time to, according to Vice

Mayor Madison Nguyen, ensure thatexisting laws governing conversions are clear, up-to-

date, and adequate given the changing state of the economy (Wadsworth).


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It was a small victory for residents of the park, but the battle illustrates a crucial real or

perceived conflict between new development and affordable housing. In other areas of the

country, similar controversies are playing out over mixed-income housing, inclusionary zoning,

and other land use issues. Residents and elected officials alike often lack sufficient knowledge

about urban planning best practices and ways to mitigate the negative impacts of development.

Even mixed-use urban village projects can be planned in such a way as to benefit low-income

and lower-income residents. But while land use regulation and mixed-use infill development do

pose significant opportunities for ameliorating the affordable housing dilemma currently facing

many cities, they come with their own set of of unique challenges that can make or break entire

projectsnamely, uncoordinated local policies, community and neighborhood support, and

simple economics.

SECTION 1: The Problem with Sprawl

With the mass production of the automobile and the advent of freeways in the 1940s and

1950s, the urban areas of the United States underwent a massive expansion that resulted in the

modern American suburb. Unlike more traditional urban areas, these often far-flung bedroom

communities strictly distinguished between residential, commercial, and industrial areas.

Automobile use thus became a virtual prerequisite, necessitating wide freeways, multi-lane city

streets, and expansive surface parking lots for commercial centers. As regions grew, public

services, like water, sewer, police, and fire, were extended to newly-incorporated or -annexed

areas, increasing the burden on local governments and taxpayers, Before long, the suburbs had

become almost cripplingly expensive. Still, they proved quite popular with families, the middle-

class, and the wealthy.


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Over the past several decades, however, dense urban cities became increasingly popular

as younger college-educated professionals returned in droves for their wide array of

entertainment options and job opportunities. Cities could offer a tightly-packed living

environment with a lower per-capita cost, opportunities to walk, bike, and use transit to

commute, and enriching arts and culture activities. Moreover, thanks to their smart urban

planning and effective density balances, they could support a wider array of housing choices. In

response to these changing cultural attitudes, urban planners developed new zoning types, in

both cities and suburbs, to spur redevelopment and increase housing affordability.

Mixed-use or urban village designs became by far the most popular. According to the

American Planning Association, which represents the professional urban planning community,

mixed-use development blends residential, commercial, cultural, institutional, and sometimes

even industrial uses. These types of projects allow for greater housing variety and density,

strengthen neighborhood character, and promote pedestrian and bicycle-friendly

environments (Mixed Use Development). By favoring denser, more tightly-packed

developments with large numbers of small units, urban planners argue that affordable housing

can become a more profitable enterprise. Planners envision these zones as becoming mini-

downtowns for neighborhoods, with community retail, housing, and often, city services, such as

libraries and public squares. In some cities, urban villages have been organized around university

campuses, medical districts, and office parks.

With prominent examples of mixed-use developments, such as Santana Row, catering to

the wealthy, it would be easy to dismiss the strategy as a non-solution. Surprisingly, however,

these concepts hold great promise for affordable housing advocates. With a large number of


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units, low-income and lower- to middle-income housing can indeed become more affordable

(Quigley 69). And with easy access, often by foot or transit, to jobs, healthcare, and other

essential services, dense, mixed-use urban villages might also provide an increased level of

upward mobility (Chetty, et al.). More innovative mixed-income housing models have utilized

mixed-use practices with an eye toward social mixing, in hopes of providing further benefit to

lower-income residents. As such, mixed-use and urban village development forms, as

incentivized by inclusionary zoning requirements, can offer unique and tangible benefits to even

the lowest-income residents. Of course, the primary challenge lies in the promotion of policies to

prioritize these types of equitable developments.

SECTION TWO: Promising Policy Prescriptions

Introduction

In late 2013, protests erupted in San Francisco over the use of public transit stops by the

employee shuttles of Silicon Valley technology companies. The Google bus protests received

widespread national and international press attention as anti-gentrification activists and

affordable housing advocates engaged in mostly peaceful demonstrations against a perception of

growing income inequality in the city. Essentially, the protesters argued that the Google buses

compound the problem by making San Francisco a more desirable home for tech workers than

cities like Palo Alto, Mountain View, and San Jose, which lie closer to their jobs but also lack the

urban amenities craved by young professionals.

Indeed, its a powerful argument. Transporting workers to the suburbs instead of

developing housing opportunities and amenities in the suburbs creates a host of new land use

issuesin both cities and suburbs. But perhaps policymakers and activists can strike a middle


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ground. With the advent of new development practices and policy prescriptions, such asinfill

development, mixed-income housing, and inclusionary zoning, the cause of redevelopment need

not conflict with efforts to improve housing variety.

Infill Development

In many urban areas, surface parking lots and old, dilapidated buildings limit housing

growth and decrease economic and civic vitality. By infilling these underutilized properties

with denser, mixed-use development, urban planners argue, affordable housing will blend with

market-rate units until the two become nearly indistinguishable. (Note that community advocates

and politicians often use such terms as infill, mixed-use development, urban village, and

smart growth somewhat interchangeably.) For their part, city politicians see infill

development as a way to expand their tax base, attract more middle-class residents to the city,

and build more affordable housing (Steinacker 492).

Similarly, in a brilliant piece in the civic affairs journal Urban Studies , researcher Andrew

Aurund notes that smart growth proponents often argue that greater density, a greater variety of

housing types, and mixed land use can alleviate the upward pressure on housing prices because

dwelling units in locations pursuing these three goals aresmaller and consume less

land (1016). Indeed, while advocacy groups like Smart Growth America often tread carefully

around mention of affordable housingperhaps for fear of increased oppositionthe

coalitions website notes that the diverse mix of housing options in smart growth

neighborhoodsmeans people with different housing needs can all live in the same

neighborhood (Housing). But does mixed-use development really work as well as proponents

advertise?


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As it turns out, at least some of the claims of smart urban growth proponents may stand

up to quantitative research. In his study, Aurund finds that in two Northwestern cities, Portland

and Seattle, which both adopted strong density guidelines and urban growth areas in the 1990s,

the percentage of rentals available for very low-income citizens increased after the policies were

enacted and density levels increased (1029). Indeed, he notes that the research suggests that a

neighborhood with greater density and with a greater variety of housing types is likely to have a

greater quantity of affordable rental units than a low-density neighborhood consisting of single-

family homes (Aurund 1032).

On the other hand, in a broader, more national study of fifty of the largest metropolitan

areas, researcher Annette Steinacker finds that while infill development can benefit cities tax

bases, revitalize neighborhoods, and slow urban expansion, it also results in higher market-rate

housing costs, especially for the multifamily units typically more likely to be developed in

combination with affordable units (504-505). Perhaps more concerning, her research finds that

the regions most likely to attract infill are already more expensive than others.

As such, affordable housing and density can still be considered somewhat contradictory

goals that must be carefully balanced. While major benefits for cities can be realized when

smartly-implemented policies mitigate upward pricing pressures on market-rate units, developers

and policymakers must still work together to ensure a strong mix of housing options, increased

density, and a mix of land uses.

Inclusionary Zoning

Since the landmark United States Supreme Court ruling in Village of Euclid v. Ambler

Realty Company (1926), cities have been assured of the broader constitutionality of traditional


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zoning regulation practices. Typically, zoning in cities is used to regulate uses and provide

spacial requirements; however, land use planning should also consider the communitys need for

affordable housing (Lerman 385). Inclusionary zoning offers local governments a method to

ensure that developers create affordable residential units as a part of any new

development (Lerman 385). In other words, these regulations require that new housing

developers contribute a certain amount of funds to the development of affordable units. This can

be done through fees paid to the city of through directly-developed units. Often, in return for

complying with the regulations, cities grant so-called density bonuses to developers, which

allow a greater number of units on a site than otherwise would be allowed.

New York City, for example, has adopted a inclusionary zoning program under which

developers are allowed 33% more square footage in a development as long as they set aside 20%

of the units for affordable housing (Barro). While the developers of massive projects with

hundreds of units have taken advantage of the rules, the response to the voluntary program

among small- and medium-scale developers, somewhat understandably, has been quite tepid.

Only 3,000 affordable units are estimated to have been created between 2005 and mid-2013

(Barro). Some developers argue that because market-rate units essentially subsidize the

affordable units, the use of inclusionary zoning incentives will cause housing prices for

moderate-income families will increase. Still, Bill de Blasio and other city officials argue that the

program should be made mandatory in certain areas.

Legal analyst Brian Lerman argues in no uncertain terms that mandatory inclusionary

zoning could be the answer to the affordable housing problem. In his analysis published in the

Boston College Environmental Affairs Law Review , Lerman notes that mandatory programs have


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in the past created more affordable units than have voluntary programs (390). They also do a

better job of alleviating social problems and decentralizing poverty by mandating

integration of the community (Lerman 390). The success of voluntary programs, by contrast,

lies at the mercy of the strength of their attached development incentives. But what of

constitutionality? Zoning itself may be legal, but unlike inclusionary programs, typical zoning

regulations do not specify the types (low-income, luxury, etc.) of development allowed.

Lerman argues that as long as the city can establish a compelling interest for the

development of affordable housing and as long as a mandatory inclusionary zoning program does

not inhibit a developers ability to turn a profit, the constitutionality of the statute can be assured

(394). In the Emory Law Journal , Jennifer Morgan concurs, adding that the development of

policies at both the local and the state level can be important to ensuring the success of these

programs (383). Indeed, she notes, many states, such as Oregon and Washington, have adopted

strong growth management legislation with inclusionary zoning and affordable housing

components (373), with varying degrees of success.

For example, in recent decades, Washington State passed a strict growth management

legislation, which required cities and counties to develop Comprehensive Plansessentially, a

roadmap of development over the next twenty years (Growth Management Act). The plans

take into account a variety of issues, including land use, transit, and affordable housing.

Typically, the affordable housing section mandates that a certain number of units be developed

by the end of the plan horizon, according to expected population increases and urban growth area

expansion. Specific plans for implementation are then left up to cities and counties, who can

develop unique inclusionary zoning policies to suit their unique needs.


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Indeed, a variety of factors contribute to the success of inclusionary zoning. The support

of state government and legislatures, the creation of comprehensive plans for urban areas, and

mandatory requirements all work to improve outcomes in the program. While detractors argue

that mandatory inclusionary zoning can increase costs, effective use of inclusionary zoning

would include density bonuses large enough to offset the decrease in a developers expected

profit.

Mixed-Income Housing

Over the past fifty years, the urban poor in many major American cities have become

increasingly segregated from the wealthy. In cities like San Antonio and Washington, D.C., the

two economic groups have become so separated geographically that comparisons have been

drawn to racial segregation (Badger). But while economic segregation may allow the wealthy to

live more comfortably, reaping the benefits of the best schools, public services, and facilities, the

urban poor must endure higher crime, lower graduation rates, and lower-quality public services

and facilities. By decreasing economic segregation and prioritizing development in which the

low-income can afford to live alongside middle- and upper-income families, perhaps the long-

term cycle of poverty may be reduced.

Fortunately, both mixed-use infill development and mandatory inclusionary zoning

practices result in a unique new focus on this innovative type of mixed-income housing. With

multiple different income levels living alongside each other in dense apartment complexes and

mixed-use developments, cities and counties realize a number of benefits. Researchers Paul

Brophy and Rhonda Smith note in urban affairs journal Cityscape that mixed-income housing

advocates anticipate among the lower-income residents a higher level of upward mobility, higher


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rates of employment, and lower levels of crime (6). Low-income households, he states, will

have the benefit of better schools, access to jobs, and enhanced safety, enabling them to move

themselves and their children beyond their current economic condition (Brophy and Smith 6).

Over the past several decades, the U.S. Department of Housing and Urban Development

has experimented with funding mixed-income housing projects in hopes of realizing some of

these benefits. According to Lynn Cunningham, the departments HOPE IV program is intended

to revitalize depressed neighborhoods by replacing selected large, severely depressed public

housing properties with modern, mixed-incomecommunities (353). Through the use of

several HOPE IV grants, the District of Columbia Housing Authority (DCHA) partnered with a

number of private developers to replace low-income housing projects with mixed-income

development. While many of the projects favored lower-density single-family and two-unit

townhouses, designs incorporated many smart growth elements and increased density near transit

stops.

Unfortunately, in Washington, D.C. the HOPE IV grants did not succeed in substantially

increasing the number of affordable units. Because land in the area remains in short supply, the

lower densities of the redeveloped properties resulted in net losses in units that could not be

made up elsewhere in the system. New units were less affordable for lower-income residents,

who in most cases could not utilize Section 8 vouchers for rent at the properties. Moreover,

Cunningham argues that the basic premise behind HOPE IV, namely increased economic mixing,

was applied unequally in that poor neighborhoods were deconcentrated while wealthy

neighborhoods remained intact (361-2). There are even questions as to whether the grants

contribute to gentrification. Most concerningly, however, the projects low-density designs


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ultimately may have doomed them to failure. Without a strong mixed-use anchor development,

HOPE IV did not produce increased levels of affordable housing in Washington, D.C. Other

cities have had differing levels of success.

Questions abound as well over the effects of mixed-income housing. Because analysis of

the effects of mixed-income housing on the behavior of residents must take into account the

subtleties of human behavior, measuring the true effects of mixed-income housing can be

difficult (Brophy and Smith 6). In their research, Brophy and Smith analyze several mixed-

income developments and communities in order to find common threads that lead to success. The

pair find that the most important factor in the viability of mixed-income housing, perhaps

unsurprisingly, lies in the development and management of the property. Location, design

quality, maintenance, and profitability all contribute to success. Moreover, additional programs

designed to spur social mixing must be developed in order to succeed in increasing upward

mobility (Brophy and Smith 6). A sufficient quantity of market-rate units must be developed to

make the affordable units more viable. Finally, in order to realize the largest benefits, mixed-

income housing must not distinguish between the upper-income and lower-income units, and

must not emphasize that element in marketing. These factors lead to a better, more successful

mixed-income housing project.

SECTION THREE: We Should Implement That!

Introduction

Of course, despite the major long-term benefits of infill, inclusionary zoning, and mixed-

income housing in alleviating a lack of affordable housing, many areas have been quite slow to

adopt these proven reforms. Sometimes projects and policy implementation have stalled as a


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result of local politics and NIMBYism. Other times, simple economics has stalled specific

projects. Finally, sometimes city policies toward new housing are so piecemeal and fragmented

that they cannot make a dent in the affordable housing problem.

NIMBY/YIMBY

In November of 2013, residents of Palo Alto, California overturned their City Councils

unanimous approval of a 72-unit mixed-use affordable housing infill project called 562 Maybell

Avenue (Smith). The development, which would have included sixty apartments for low-income

seniors and twelve market-rate townhouses, was designed to help alleviate a dearth of units in

Palo Alto for low-income residents. Opponents cited the potential for increased traffic as a major

concern, despite the projects traffic mitigation efforts and location near a major transit corridor

(Smith). With a major housing crunch in the Silicon Valley, the voters denial quickly became a

national example of the not in my backyard phenomenon, or NIMBYism, in action.

These neighbors of proposed projects object on often shaky grounds, although it is

important to note that some of the concerns of so-called NIMBYs (neighbors in opposition to a

nearby project) may have a certain level of validity. For example, dense projects can increase the

number of vehicle trips on surrounding roads. Many projects violate zoning or development

agreements set forth for specific sites. Sometimes developers propose buildings with ugly

architecture or poor site plans. Frequently a project will have an unmitigated environmental

impact.

But because such opposition is often driven more by emotion than rational thinking,

NIMBYism often arises out of no single discernible issue. (Although one Vancouver, B.C.

famously wrote that the NIMBY phenomenon itself might better be described as FRUITfear


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of revitalization, urban infill, and towers.) Property values, traffic, and zoning violations are

common citations, but location might be the single sticking point.

Affordable housing projects may be particularly vulnerable to NIMBYism. The residents

of a wealthy town like Palo Alto, for example, may not want to live alongside lower-income

neighbors. They may worry that an influx of lower-income people will decrease property values

and increase crime. Residents in traditionally lower-income cities, like Spokane, Washington,

may oppose projects like halfway-houses that can aid in getting former criminals off of the street

and preventing recidivism (CITE).

Fortunately, NIMBYism can be at least somewhat mitigated. Affordable housing

developers should consider potential neighborhood opposition from the very start, planning the

projects size, type, density, appearance, and other factors around the areas existing zoning plans

and development patterns. Jaimie Ross of the National Low-Income Housing Coalition argues

that developers should educate elected officials and investigate potential legitimate legal

problems so as to ensure approval (10-11). Meanwhile, special care should be taken to gather

allies from a broad range of interests and to address all legitimate neighborhood and

community opposition (Ross 11). The best projects blend the best of residents desires with the

needs of the developer in order to create a project with broad support.

Of course, this reads almost like Pressman and Wildavskys suggestions for ensuring

public policy success in Implementation . By addressing NIMBYism from the very start,

developers would essentially be designing a policy with a special eye toward its implementation.

In Oakland, local Economic Development Agency head Eugene Foley turned his nose at meeting

with community groups and neighborhoods, ultimately dooming public support for his projects.


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As such, strong communication and interaction with potential opposing community groups

throughout the project development phase would ensure at the very least that NIMBYism does

not arise suddenly and without warning.

To be sure, NIMBYism can cause headaches for affordable housing developers. As

neighbors of a project argue, whether justifiably or unfairly, about property values, traffic, and

crime, support for a project may erode in the wider community. In order to avoid the fate of Palo

Altos 562 Maybell Avenue, developers should plan from the start for opposition, incorporating a

plan for project changes at the request of the community. In addition, project managers should

engage with the community from the very start of a project to limit the number of surprises

which arise at the last minute and diminish the likelihood of approval. Through smart planning,

developers typically can find a path around NIMBYism and through to construction.

Economics

Sometimes, affordable housing projects can run into problems before their creation, due

to unfavorable economics. In areas like the Silicon Valley and San Francisco, for example, where

the cost of land has reached exorbitant levels and a strong demand for housing compounds the

struggle for low-income units, the opportunity cost of producing affordable units over market-

rate units becomes so high that developers simply refuse to develop affordable units.

Mandatory inclusionary zoning attempts to solve this problem, but in areas with an

already-strong housing market, fund contributions may not be enough for housing authorities to

build a sufficient number of affordable units. And because market-rate units subsidize the lower-

income units, direct development of affordable housing can indeed result in a higher cost of

market-rate housing, further squeezing middle-income buyers out of the market (Quigley 69-70).


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Cities can mitigate these economic issues by ensuring that density bonuses for

inclusionary housing projects balance with the cost of construction. Building a larger number of

market-rate units would theoretically decrease the amount that each family essentially

contributes to subsidize the low-income component of the project. In addition, economic

carrots, like tax subsidies, benefits, or even public financing can sweeten the deal for

developers. Of course, cities must be careful to ensure long-term viability, but if short-term

efforts result in additional units, then those options should be explored.

Poor City Policies

While most cities at least nominally endorse affordable housing and low-income housing

construction, their municipal codes and comprehensive development plans may not offer the type

of far-reaching, universal policy strategy that would actually solve the problem. Instead, local

development laws often consist of a complex, difficult-to-navigate patchwork of often-

conflicting policies and zoning regulations. Considerable confusion results for well-intentioned

developers, low-income housing advocates, and policymakers

For example, a citys comprehensive plan may prioritize infill development with a mixed-

use focus, but fail to include relevant enforcement mechanisms that ensure code compliance.

Local governments may pass a mandatory inclusionary zoning component, but apply it only to a

certain area of the city or to certain types of projects. Inclusionary zoning may live alongside

exclusionary zoning (which mandates certain heights, parking lots, and setback requirments)

despite evidence that the strongest mandatory exclusionary zoning policies blanket the city

without discrimination (Lerman 392). And though mixed-income housing may be promoted on

paper, many cities, such as New York City, have not yet thrown their weight entirely behind the


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proposal, opting to continue to support the types of public housing projects which segregate low-

income residents from wealthier citizens.

Unfortunately, simplifying and streamlining these conflicting policies can prove difficult.

In some states, any change to development laws involves a comprehensive plan update, which

can require the approval of a state hearings board. Local governments may find powerful

political interests standing in opposition, depending on the policy, including homebuilders

associations and neighborhood advocates. Finally, despite the attention given in the Bay Area to

income inequality and affordable housing, partially as a result of the Google bus protests, in most

cities, residents possess little appetite for changes in development laws to make affordable

housing easier and more profitable to develop. As such, city policies encourage affordable

housing at a mere fraction of their potential.

CONCLUSION: Long-Term Prognosis

Land-use and urban development strategies often tread a fine line between supporting

affordable housing and working against it. Through the use of mixed-use, high density infill

development, inclusionary zoning practices, and mixed-income housing prioritization, many

regions attempt to make more units available for low-income residents. But NIMBYism, simple

economics, and uncoordinated city policies can create problems in implementation. And without

a major focusing event, in most areas of the country the issue remains more of a background

concern than one at the forefront of the publics attention.

In the case of Winchester Ranch, the mobile home park for the elderly across the street

from Santana Row, the City of San Jos has a number of policies in place to ensure that any

potential developer would contribute a significant amount to affordable development in the area.


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But even if Pulte Homes purchases the property, demolishes the mobile homes, and constructs

500 low-income units, the seniors will still be out of a home, the developers will miss out on

millions of dollars in profit, and the areas low-income housing situation would not be

substantially affected. Perhaps the the clearest signal yet that in the complex realm of land use

planning, affordable housing remains caught in a high-stakes balancing act.


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Works Cited/Consulted

Barro, Josh. "Affordable Housing Thats Very Costly." The New York Times . The New York

Times, 07 June 2014. Web. 8 June 2014.

Bigler, Matt. "San Jose Mobile Home Park Residents Face Eviction For Condo Development."

CBS San Francisco . KCBS, 23 Oct. 2013. Web. 08 June 2014.

Brophy, Paul C. "Mixed-Income Housing: Factors for Success." Cityscape 3.2, Mixed-Income

Housing (1997): 3-31. JSTOR . Web. 23 Apr. 2014.

Chetty, Raj, Nathaniel Hendren, Patrick Kline, and Emmanuel Saez. Where Is the Land of

Opportunity? The Geography of Intergenerational Mobility in the United States . N.p.:

n.p., n.d. The Equality of Opportunity Project . Web. 6 June 2014.

Cunningham, Lynn E. "Islands of Affordability in a Sea of Gentrification: Lessons Learned from

the D.C. Housing Authority's HOPE VI Projects." Journal of Affordable Housing and

Community Development Law 10.4 (2001): 353-71. JSTOR . Web. 23 Apr. 2014.

"Growth Management Act." APA Washington . American Planning Association: Washington

Chapter, n.d. Web. 9 June 2014.

"Housing." Smart Growth America . Smart Growth America, n.d. Web. 10 June 2014.

Lerman, Brian R. "Mandatory Inclusionary Zoning: The Answer to the Affordable Housing

Problem." Boston College Environmental Affairs Law Review 33.2 (2006): 383-416.

Digital Commons at Boston College Law School . Web. 7 May 2014.

"Mixed Use Development." Planning.org . American Planning Association, n.d. Web. 08 June

2014.


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Implications of Land Use Policy on Affordable Housing

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