Promoting Affordable Housing Using Carrots and Sticksrc.com/documents/Sitkowski 2006 FRA...

© 2006 Robinson & Cole LLP

2006 Annual Conference 2006 Annual Conference Florida Redevelopment AssociationFlorida Redevelopment Association

Promoting Affordable HousingPromoting Affordable HousingUsing Carrots and SticksUsing Carrots and SticksRobert J. Sitkowski, Esq., AIA, AICPRobert J. Sitkowski, Esq., AIA, AICP

October 18, 2006October 18, 2006Miami, FloridaMiami, Florida


Factors Affecting the Provision of Affordable Factors Affecting the Provision of Affordable HousingHousing

• Market• Financing• Design• Regulations

– Building and Safety Codes– Local Land Development Regulations


Focus on Local Land Development Focus on Local Land Development Regulatory ApproachesRegulatory Approaches

• The Big Stick• The Bunch of Carrots• Examples of Other Approaches


The Big Stick: Inclusionary Zoning The Big Stick: Inclusionary Zoning (“IZ”)(“IZ”)

• What is it?• Why is it imposed?• How is it implemented?• Pros v. Cons


IZ: What is it?IZ: What is it?

• Requirement that developers dedicate a percentage of units in constructed projects for low or moderate income housing


IZ: PurposesIZ: Purposes

• Creation of affordable units for certain income levels for a relatively long time horizon

• Private sector subsidy for construction• Sometimes, achieve economic integration by

distributing units in market-rate developments and designing them to be indistinguishable


IZ: Implementation MethodsIZ: Implementation Methods

• Usually mandatory– Set-asides, with resale restrictions, in the development

(with or without density bonuses)– Provision of off-site units– Payment of in-lieu mitigation fees

• Sometimes voluntary, paired with carrots


Variations on a Theme: Variations on a Theme: Linkage ProgramsLinkage Programs

• Requires developers of office and commercial space to contribute low- or moderate-income housing, either in-kind or by payment of in-lieu funds for the provision of off-site units


IZ: ProsIZ: Pros

• Mandating provision of units can complement other tools in the toolbox

• Voluntary programs allow developer to determine if participation will be cost-effective

• Can achieve economic integration and access to public facilities without stigma

• Coupled with incentives, achieves the social good of developing affordable housing and reducing development costs


IZ: ConsIZ: Cons

• Places a burden on developers to address a societal problem

• Resale price controls may not reflect market• Does not address high land costs and availability

of land• Implementation cost to local government


Florida’s “Community Workforce Florida’s “Community Workforce Housing Innovation Pilot Program” Housing Innovation Pilot Program” • (a) The local jurisdiction adopts appropriate regulatory

incentives, local contributions or financial strategies, or other funding sources to promote the development and ongoing financial viability of such projects. Local incentives include such actions as expediting review of development orders and permits, supporting development near transportation hubs and major employment centers, and adopting land development regulations designed to allow flexibility in densities, use of accessory units, mixed-use developments, and flexible lot configurations. Financial strategies include such actions as promoting employer-assisted housing programs, providing tax increment financing, and providing land.Laws of Florida, Chapter 2006-69, Section 27(7)


Carrot: Fast Track Review/Fee Carrot: Fast Track Review/Fee WaiverWaiver

• Signals the government is serious about affordable housing because it give priority to these proposals

• Maybe eliminate subjective design review• Can attract developers because real estate

development is time-sensitive• Fee waivers can range from review/filing fees to

impact fees


Carrot: Density BonusesCarrot: Density Bonuses

• Facilitates development of multifamily housing• Techniques

– Accessory apartments– Duplexes and other innovative single-family designs– Clustering– Mixed use: Units above commercial

• Focus should be on design, not numbers


Carrot: Modification of Development Carrot: Modification of Development StandardsStandards

• Review subdivision and zoning standards for hurdles

• Examples– Bulk controls, e.g., height, setbacks, coverage– Lot size and configuration– Minimum v. Maximum Floor Area


Carrot: Growth Control ExemptionsCarrot: Growth Control Exemptions

• Applicable in high-growth areas – APF increases– Moratoria exemptions– Building Permit Allocation System exemptions

• May highlight tension between affordable housing and environmental goals


Mandated Special Treatment and Mandated Special Treatment and BurdenBurden--Shifting Shifting

• New England– Massachusetts/Rhode Island– Connecticut

• The Illinois Variant


SummarySummary

• Regulations themselves cannot solve this complex problem

• To reduce burden and development costs, complement IZ with incentives

• Calibrate the carrots• Work in concert with non-regulatory approaches

– Community Land Trusts– Housing Partnerships– Government Property/Land Banking

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