Transcript Potential Effects of “Inclusionary Zoning” in Canada

Potential Effects of
“Inclusionary Zoning”
in Our Community
Presentation to the Municipal Council of
[Name] by CHBA – [Name]
June, 2008
Topics Today:
• Say who we are, and how we approach “inclusionary
zoning”.
• Outline our understanding of what the City of [Name]
is proposing.
• Discuss key evidence about this policy from the United
States and Canada according to a recent study
commissioned from Altus Clayton economic research.
• Present positive alternatives to “inclusionary zoning”.
Effects of "Inclusionary Zoning"
2
Who We Are:
• Represent new home builders, residential
developers, and home renovators in this
community.
• Nature of our business means we have to be
concerned about housing affordability and
choice… our interests coincide with those of
current and future generations of new home
buyers and renters.
• Contribute to community economy.
Effects of "Inclusionary Zoning"
3
How We Approach This Topic:
• Understand pressures on municipal council to address issues of
housing affordability and choice.
• Two Fundamental Principles of our Association:
– The right of all Canadians to decent, safe and appropriate housing
– The right of all Canadians to a reasonable opportunity to own their own
homes
• Housing affordability challenges result from many factors, some
beyond control of either the municipality or industry, e.g., global
economic trends; changing Canadian demography.
• Want to work together on evidence-based, effective solutions.
• Have serious doubts about effectiveness of “inclusionary
zoning” because of experience elsewhere with it.
Effects of "Inclusionary Zoning"
4
Our Understanding of “Inclusionary
Zoning” Policies:
• Require land, units, and/or cash in lieu to be provided
as part of an agreement to approve a new development.
• Developer may be asked to supply these at a predetermined price, below the market amount.
• Developer may be compensated through density
bonuses and/or other concessions by municipal
planning authorities.
[Specific details of municipal policy proposal here]
Effects of "Inclusionary Zoning"
5
Evidence of Effectiveness from the
United States – Altus Clayton Findings:
• Negative impacts on affordability are likely, especially for
first-time home buyers.
• Do not produce high volume of “affordable” housing …
typically only 3-7 percent of net new housing over lengthy
period.
• Often compensation must be provided to developers and this is
costly.
• Typically costs of providing “affordable” housing units passed
on to new home buyers, reducing affordability for them.
Inequitable, amounting to “housing tax”.
• Requirements for “affordable” units may result in development
not proceeding. Result may be reduced production overall.
• Ultimate impact is generally higher housing prices and reduced
entry into market for new
home buyers.
Effects of "Inclusionary Zoning"
6
Going to the Root of the Problem Altus Clayton Findings:
• Restrictions on land uses embedded in zoning
system, coupled with taxes, fees, levies and
charges, drive up housing prices.
• Literature reveals “inclusionary zoning” only
“works” in strong housing markets, and then
only in a very marginal way.
• “Inclusionary zoning” is not an effective
housing policy but a deflection that avoids the
real issues.
Effects of "Inclusionary Zoning"
7
Evidence of Effectiveness from
Canada – Altus Clayton Findings:
• Only in British Columbia have there been longstanding efforts to apply inclusionary zoning
policies.
• To date, these have produced limited,
disappointing results.
• In most provinces, legislation discourages
“regulatory takings”, which is what inclusionary
zoning requirements are.
Effects of "Inclusionary Zoning"
8
The Bottom Line:
• Superficially attractive policy because it appears
to be “free money”, and nobody seems to get
hurt by it.
• In reality, a deflection from tackling deeper
issues; potential exists for market-wide reduction
of affordability.
• We need to do better than this! It is unfair to
new home buyers, especially first-time buyers,
and misleads those in need whom it is trying to
assist.
Effects of "Inclusionary Zoning"
9
An integrated approach to increase
housing affordability and choice:
• Reduce government-imposed costs on and remove
regulatory barriers to new housing.
• Encourage private sector investment in rental housing
production by removing the tax disincentives to such
investment.
• Provide income support through portable housing
allowances to those who cannot afford decent housing.
• Build housing combined with support services for
households with special needs.
• Create opportunities for accessory units as integral
elements of new housing developments.
Effects of "Inclusionary Zoning"
10
Conclusions:
• This is a policy shown by extensive experience to have
disappointing results.
• It can act as a distraction from the more fundamental
pressures on housing affordability and choice.
• It is preferable to address those underlying drivers than
to attempt this new fad.
• The CHBA is ready to work with you on an integrated
policy to expand housing affordability and choice.
Effects of "Inclusionary Zoning"
11