Here are the top line findings: 1. In the Baltimore-Washington region, I estimate that mandatory IZ programs increase a jurisdiction's median house price by one percent per year compared to what it could have expected without IZ.
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2. I don't find that IZ has reduced housing construction. IZ could increase house prices by causing developers to switch to higher end construction where IZ subsidies may be easier to absorb or if it leads them to build smaller, less efficient projects to avoid IZ requirements.
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3. The outcomes from the region's optional IZ programs are perhaps more interesting than these empirical findings. Out of 8 optional programs, only 2 have produced any units.
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This is in spite of the optional programs having on average larger density bonuses and smaller affordability requirements.pic.twitter.com/wf1Vaz0CiT
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4. The optional IZ programs that have produced any units are Alexandria (391 units in 23 years) and Falls Church (80 units in 16 years). These are two very high cost jurisdictions where exclusionary zoning severely constrains housing construction.
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5. The lack of utilization of optional programs in most jurisdictions indicates that mandatory IZ programs likely tax housing construction relative to the status quo unless house prices are very high due to otherwise exclusionary zoning.
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Thanks
@mnolangray for this great map of IZ in the Baltimore-Washington regionpic.twitter.com/9XMdVDAEqZ
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Finally, in this policy brief I explain why liberalizing land use regulations and providing targeted subsidies for people who need them are a better path to affordability than IZ:https://www.mercatus.org/publications/urban-economics/inclusionary-zoning-hurts-more-it-helps …
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In my anecdotal understanding, the main reason for optional programs’ lack of production is siloed business models. Almost all developers and funding sources are set up for either affordable or market rate housing. Not both.
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Yeah, that makes sense. But if providing below-market-rate units in exchange for density bonuses was a good deal, it seems like some developers would want to try to adapt their business model.
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Čini se da učitavanje traje već neko vrijeme.
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