A reader asks for my thoughts on DC’s new inclusionary zoning rules which basically require developers to provide a certain proportion of the units in new developments at sub-market rates. On the policy itself, I’ve heard of examples of strict inclusionary zoning rules that work well (Brookline, MA I believe is one such example) but I’m a bit skeptical that the DC government is actually up to the task of outlining and enforcing this kind of complicated regulatory scheme in a way that’s workable and beneficial.
But one way or another, this sort of regulatory mandate really doesn’t seem to be the best possible way to achieve the goal of making housing more affordable. Suppose that instead we:
— Reduced or eliminated rules mandating the construction of parking as part of new developments.
— Permitted the construction of taller structures.
— Relaxed maximum lot occupancy rules.
— Permitted the construction of smaller apartments.
That, it seems to me, would increase the supply of housing units in the city. That ought to, ceteris paribus, reduce the market price of housing thus rendering housing more affordable. It would also generate additional tax revenue and some of the revenue could be spent on subsidies for struggling families to help them afford housing. Last, it would increase the proportion of the metro area’s residents who live in the District of Columbia as opposed to the suburbs, which would be good for the environment. Adding an additional inclusionary zoning regulation on top of existing supply constraints, by contrast, seems likely to further constrain supply. Amidst a real construction boom, it’s true, these rules would result in the creation of new affordable units. But absent such a boom it simply discourages new development, meaning the city will have more vacant lots, more surface parking lots, more abandoned structures, and fewer housing units than it otherwise might.