Strengthening DC s Inclusionary Zoning

Transcription

1 Strengthening DC s Inclusionary Zoning Presented to the DC Zoning Commission Case No G On behalf of the DC Campaign for Inclusionary Zoning Cheryl Cort, Coalition for Smarter Growth Claire Zippel, DC Fiscal Policy Institute January 28, th St, NW, 30-unit building with 4 IZ units under construction near the U Street Metro February 26,

2 Inclusionary Zoning Largely Successful Contributing to diversity of DC s affordable housing stock near jobs, transit, good schools Bonus density offsetting cost DC housing production at 25-year high From: Urban Institute Affordable Housing Needs Assessment: Phase 1, 2014

3 With Production Ramping Up, Time to Revisit IZ production is ramping up with 767 IZ units produced or in pipeline Administrative changes eased sticking points but potential for further improvement Inclusionary Zoning Production is Ramping Up IZ units produced or in pipeline, IZ-compliant developments In Pipeline Source: DC Office of Planning set-down report on case no G. Includes IZ units in matter-of right developments, PUDs, and subsidized affordable developments.

4 IZ Produces Very Few Truly Affordable Rentals Most IZ Units Are Moderate-Income Rentals Percent of IZ units Includes matter-of-right, PUDs, and subsidized affordable units that count for IZ compliance Affordability Ownership Rental Total 50% AMI 7.5% 4.8% 12.3% 80% AMI 10.2% 77.5% 87.7% Total 17.6% 82.4% 100.0% Source: IZ-compliant production with filed Notices of Availability as of June 2015, DC Office of Planning set-down report on case no G.

5 Skew Is Unintended Consequence of Design Low density zones / Stick construction Higher set-aside IZ Income Targeting and Set-Asides Residential zones Split between 50% & 80% AMI All other zones Split between 50% & 80% AMI High density zones / Steel construction Lower set-aside Split between 50% & 80% AMI All 80% AMI Source: 11 DCMR Higher set-aside: Greater of 10% residential FAR or 75% bonus density. Lower set-aside: Greater of 8% residential FAR or 50% bonus density.

6 80% AMI Rentals Are Misaligned With Need Rental Units at 80% AMI Do Not Meet Affordable Housing Need Income Level Maximum Income 2- person household Severely Rent Burdened Households Share Number 50-60% AMI $52, % 1, % AMI $69, % 311 Source: DCFPI analysis of American Community Survey. Margin of error: 50-60% AMI: ±0.7%; 70-80% AMI: ±0.5%.

7 80% AMI Rentals Are Misaligned With Need Workers at 60% AMI Are Key Part of DC Workforce Income Level Maximum Income 2- person household 60% AMI $52,400 80% AMI $69,900 Sample Occupations Administrative assistant Retail & food preparation supervisor School bus driver Maintenance worker Legal support worker Educational counselor Sales representative Internist (M.D.) Source: DC Code ; US Bureau of Labor Statistics, Occupational and Employment Statistics for the District of Columbia, 2014.

8 80% AMI Rentals Are Misaligned With Need Most households on IZ lottery list need 50% AMI units One-bedroom IZ unit at 80% AMI rents for $1,640 a month above average rent for DC and higher than many submarkets Office of Planning: 80% AMI rental is very close to available rental market supply Sources: Comments by DHCD IZ & ADU Program Director at DC Office of Planning working group, Aug. 13, 2015; 2015 DHCD IZ Maximum Rent and Purchase Price Schedule; DC Office of Planning set-down report on case no G.

9 We Support Office of Planning Proposal 1B IZ rentals at 60% AMI & IZ condos at 80% AMI OP land value impact model Assumptions are extremely conservative Analysis with model shows: Value of existing bonus density offsets lowering rents to 60% AMI level Impacts are marginal and within industry standard contingency factor We propose modifications to set-aside in 4 zones

10 We Support Office of Planning Proposal 1B IZ rentals at 60% AMI & IZ condos at 80% AMI OP land value impact model Assumptions are extremely conservative Analysis with model shows: Value of existing bonus density offsets lowering rents to 60% AMI level Impacts are marginal and within industry standard contingency factor We propose modifications to set-aside in 4 zones

11 Zone Land Value Impact Analysis Shows Minimal Impacts on Rental Development Zones are in order of by development capacity as determined by OP study Income Targeting Change Current IZ Impact on Market Scenario 1B Modified Scenario 1B C-2-A % -6.6% 3.9% CR % 15.5% C-3-A % 20.6% R-5-A % -15.6% -0.4% R-5-D % -9.5% 0.0% C-2-B % 4.5% R-5-B % -8.0% 3.2% C-3-C % 13.8% C-2-C % -2.9% W % -6.1% 5.5% February 26,

12 Refining OP Proposal 1B Modification: reduce set-aside in selected zones To greater of 8% GFA or 50% bonus density in C2A, R5A, R5B, W1 To greater of 7% GFA or 40% bonus density in R5D, W3 Project-unique impacts of new requirements can be addressed by: Grandfathering projects in pipeline to allow land values time to adjust BZA relief through existing economic hardship provision

13 Comments on Other OP Proposals Matter-of-right off-site Increase in affordable space should be 50% rather than 20% Cannot jump Anacostia; administrative approval of site Clarify that Mayor may purchase units to rent, as well as to buy Provisions for extended vacancy are too vague Resale options risk loss of affordable units

14 Impact to Market Modified Scenario Scenario Modified Zone Base IZ 1B 1B set-aside C2A -2.7% -6.6% 3.9% 8%/50% R5A -9.8% -15.6% -0.4% 8%/50% R5B -3.8% -8.0% 3.2% R5C 6.8% 4.2% R5D -4.4% -9.5% 0.0% 7%/40% W1-2.7% -6.6% 3.9% 8%/50% C2B 7.0% 4.5% C2C -14.5% -2.9% C3A 7.1% 20.6% C3B 7.2% 4.7% C3C 0.3% 13.8% CR 0.0% 15.5% CR/FT 1.3% -3.6% SP1 7.1% 4.6% SP2-14.5% -2.9% W2 9.6% 7.1% W3 0.0% -6.1% 6% 7%/40%