Integrating affordable housing in market-rate developments

Acknowledgments iv

Executive Summary v

Better Access to Affordable Housing 1

Inclusionary Zoning: An Increasingly Used Tool to Generate Affordable Housing 2

The District of Columbia’s Inclusionary Zoning Program 6

Research Methods and Data 8

Existing Housing Conditions in DC 9

Data on Market Rents 9

Private and Public Costs of the Inclusionary Zoning Program 10

Analysis Geographies 12

Housing Conditions and Affordability in Washington, DC 14

Housing Costs 14

Housing Affordable to Households with Low Incomes 16

The Costs of Inclusionary Zoning Subsidies 21

An Alternative Approach to Providing Affordable Housing 24

Willingness to Pay to Lift Inclusionary Zoning Requirements 25

Pro Forma Analysis Comparison 28

Revenue Potential of Alternative Inclusionary Zoning Strategies 29

Subsidies Required to Create Affordable Units in Existing Buildings 35

Affordable Housing Creation under the Current Inclusionary Zoning System versus an Alternative Approach 38

Impact of Alternative Policies on Overall Housing Supply 41

Alignment of Alternative Policy Approaches with City Goals 43

Appendix A. Analysis of Housing Characteristics in Washington, DC 47

Appendix B. Estimates of Inclusionary Zoning Program Subsidies and Costs 51

Notes 58

References 61

About the Authors 63

Statement of Independence 64