There was a lot of debate before the NYC Campaign for Inclusionary Zoning settled on a name. Some of the community organizers and policy advocates worried that the wonky term “inclusionary zoning” would alienate the public. Others argued that on the contrary, “inclusion” is an idea that New Yorkers generally favor. All wondered whether a campaign about land use, by any name, would catch fire.
In the end, the group had little choice about the name or their aim: They see modifying the city’s zoning code as one of the few remaining ways to guarantee new affordable housing in New York City. “We have a citywide affordable-housing crisis,” says Brad Lander, a leader in the new campaign and executive director of the Pratt Institute Center for Community and Environmental Development (PICCED), “and folks are just beginning to realize what important issues land use and zoning are.” A new study from the Regional Plan Association and Citizens Housing & Planning Council found that over a third of households in New York City spend more than 35 percent of their income on housing, with the burden getting heavier the lower a family’s income.
The Bloomberg administration asserts that the real estate industry can be convinced to produce more affordable housing through bond financing and other incentives. Just how eagerly developers will embrace these opportunities remains to be seen. The city’s Independent Budget Office projects that even if developers take full advantage of the city’s funds, just 6,700 units will be created for households earning less than $50,000 a year and another 11,500 for those earning up to $88,000.
The more than 50 groups now participating in the inclusionary zoning campaign want New York to ask real estate developers to do more. From San Diego to Arlington, VA, to Boston, more than 500 local governments either require developers to set aside a portion of all new units for low- or moderate-income tenants or give them financial incentives to do so. New York is already one of them. In much of Manhattan, developers get tax breaks for setting aside one in five units for low-income tenants, and in the highest-density neighborhoods they can build beyond height limits if they include affordable apartments.
The campaign is now looking to build on those models by making affordable housing a mandatory part of the city’s ambitious redevelopment plans. The Department of City Planning is in the process of rezoning dozens of neighborhoods, many of them formerly industrial, opening vast areas for new residential development. In these areas, campaign leaders say, the city should guarantee that a portion of new units will rent or sell for less than market rate. Elsewhere in the city, they want developers to have the option to build larger, more lucrative buildings in exchange for including affordable apartments.
“The administration likes to say that the market should be left to function naturally,” says Craig Gurian, director of the Anti-Discrimination Center of Metro New York and a member of the campaign’s steering committee. “But the windfall created from rezoning is a function of city decisions. The administration is making a series of choices, and we have to make sure those choices are balanced.”
Lander tried to get inclusionary zoning on the map once before, when he was head of the Fifth Avenue Committee. In 2002, City Planning announced plans to rezone Park Slope’s Fourth Avenue. Lander’s organization and other local groups asked the agency to give developers the option to build bigger buildings in exchange for including some affordable apartments.
But the planning department was dead-set against it. And because it was a neighborhood group working on what was perceived as a neighborhood issue, the Fifth Avenue Committee didn’t have political leverage. “That was very discouraging,” says Gretchen Maneval, the organization’s director of housing development. “But I’m very happy now we went through that process. The Park Slope fight was a real lesson learned.”
Early this year, Lander called together policy advocates and housing organizers–including reps from ACORN, Habitat for Humanity, Association for Neighborhood Housing Developers, El Puente and St. Nicholas Neighborhood Preservation Corp.–for an informal after-hours meeting. “It was just going to be dinner,” Lander says. “No planning, no coalitions, just a chance to talk about issues in affordable housing in the coming year.” Laughing, he adds, “But that’s not how organizers really work.”
At that meeting, recalls ACORN’s Julie Miles, lead coordinator for the inclusionary zoning campaign, participants kicked around a lot of the big issues in housing, from rent regulations to cuts in federal rent subsidies. And, says Miles, “There were a lot of voices from all over the city talking about zoning in a serious way.” Advocates learned from one another that communities across the city were all trying–and failing–to get City Planning to commit to zoning for affordable housing. “We came up with the new strategy based on people’s fairly universal experience that attempts at conversation with the mayor on this issue were going nowhere.”
The local and citywide groups are now working jointly to build a political base for inclusionary zoning, using slogans like “Zone Us In” and “NY Includes Us All” to rally support among churches, unions and grassroots social justice groups. “City Planning has been able to divide and conquer with all of these rezonings,” says Maneval. “We need to respond with a united front. In every part of the city, we need to give the same response: We want some type of inclusionary zoning.”
The Bloomberg administration is not opposed to offering voluntary incentives. City Planning is proposing them on Manhattan’s Far West Side, and Shaun Donovan, the new commissioner of the Department of Housing Preservation & Development, has said they are likely to show up in plans for Williamsburg as well.
But the City Planning Department has repeatedly come out against obligating builders to include low-priced apartments. “There is enormous commitment to affordable housing,” says Rachaele Raynoff, the agency’s spokesperson. “But our initial look at the numbers shows that inclusionary zoning may not be economically feasible.” Profits from market-rate homes, Raynoff explains, might not be high enough to balance the costs of affordable units. If that’s the case, she says, “one would deter housing altogether.”
Developers are quick to validate that fear. “It’s an added cost to build, regardless of the social benefits,” says Michael Slattery, research director at the Real Estate Board of New York. He argues that the burden of doing affordable housing in relatively untested markets would scare away potential investors. “Will they build if there is a mandatory requirement? No.”
“The development business is subject to the vagaries of the marketplace,” says builder Jeffrey Levine, who has built affordable housing using government subsidies. “With interest rates moving up, rents flattening down, operating costs at an all-time high and construction costs soaring because of inflation, the economics don’t even support market-rate housing.”
The administration is taking such warnings seriously. Raynoff says affordable housing advocates should, too. All housing construction, she explains, even luxury buildings, benefits all consumers. “It’s simple supply and demand,” says Raynoff. “The more housing you build, the less expensive it may become. It filters down from the very high end.”
But there’s no strong evidence that such trickle-down actually occurs in New York–a global financial powerhouse with a continual influx of new residents able to pay luxury rates. Frank Braconi, director of the Citizens Housing & Planning Council, notes that during the city’s housing construction boom of the early 1960s, in which 350,000 units were built, rents actually went up: “Filtering does not necessarily lower the price of housing. But it does upgrade the housing stock.”
Researchers have also questioned the idea that inclusionary zoning deters development. In other cities, the price of land in rezoned areas has simply declined, stabilizing developers’ costs. And a 20-year study of 28 California cities, commissioned by the Los Angeles Department of Housing, showed that inclusionary programs had no negative impact on production.
Some experts in housing finance say the bottom line is that government must ensure that real estate investors can see some level of profit. “Developers will do whatever you want, as long as there is sufficient economic incentive,” says Bill Traylor, president of the Richman Group of New York and a former top Bloomberg administration housing official. The campaign is recommending ways to help developers realize those profits, including small tax breaks and fee waivers.
With the Bloomberg administration unwilling to budge, inclusionary zoning advocates have decided to take their case to the City Council, which can pass, veto or amend zoning proposals. Already, 11 council members have signed on, including Brooklyn’s Letitia James and Charles Barron; Hiram Monserrate and John Liu of Queens, Christine Quinn from the West Side, Bill Perkins in Harlem, and Larry Seabrook of the Bronx. David Yassky, whose district includes Williamsburg, submitted a resolution calling on City Planning to consider establishing mandatory inclusionary zoning in certain districts. He wants to get council members on the record in support before July, when a downtown Brooklyn rezoning plan is slated to be sent to the council for review.
While inclusionary zoning’s proponents have to present a credible business case to public officials, they also recognize that social justice and civil rights are what will mobilize their community base. “For our campaign,” says Miles, “the question is, Are we going to be a city of the elite, or are we going to take specific action to ensure that the people who built this city can afford to live here?”