27 October 2023
Inclusionary zoning legislation in Pittsburgh can be an important first step in the battle for affordable housing if we learn from other cities. Inclusionary zoning (IZ) policies require developers to include affordable units in buildings of a certain size. The U.S. Department of Housing and Urban Development defines affordable housing as taking no more than 30% of a household’s income. Pittsburgh inaugurated inclusionary zoning in Lawrenceville in 2019 and expanded the policy to Bloomfield and Polish Hill in 2022 (1). Calls for IZ to be expanded across the city should point us to examine Boston, where inclusionary zoning is in place across the city, and Atlanta, where it only covers a few neighborhoods. City governments love IZ because it creates affordable housing on the developers’ dime—and because of its success. In Lawrenceville, 40 affordable units have been created under IZ regulations, with construction continuing despite an economic slump during the pandemic (1). And IZ hasn’t slowed down Atlanta’s or Boston’s housing markets either (3). In Boston, over 4,000 affordable units have been created since the city began IZ in 2000 (4). However, both cities continue to struggle with housing shortages (5) (6). Does this mean IZ has failed or faltered? Not necessarily. Inclusionary zoning can take so many different forms that its impact is largely dependent on how well a city tailors the policy to its needs. As Pittsburgh begins to experiment with IZ, we can learn from Atlanta and Boston’s successes and failures, creating a policy that works best for Pittsburgh’s unique situation.
Current IZ policy in Lawrenceville, Bloomfield, and Polish Hill requires new rental developments with 20 or more units to reserve 10% for households earning 50% or less of the area median income (AMI). Developments with for-sale units must reserve 10% for households earning at or below 80% of AMI (1). Atlanta and Boston’s IZ policies extend to developments with 10 or more units, although IZ in Atlanta only impacts rentals. In Atlanta, developers can either reserve 15% of their units for households earning 80% of AMI, or set aside 60% of their units for those earning 60% of the AMI. In one neighborhood, developers can choose “deep affordability” and make just 5% of their units affordable for renters earning 30% of the AMI (5). Boston requires that developments make 13% of their units affordable. Affordable for-sale units are reserved for households earning an average 90% of the AMI, while affordable rentals are reserved for those earning 70% of the AMI (6).
Developers in many cities argue that inclusionary zoning makes market-rate housing more expensive. A 2021 study based on housing in Northern Virginia upholds this claim. But other studies find that this is not always true. Even the Northern Virginia study found that inclusionary zoning raises housing costs when implemented in areas that already have strict exclusionary zoning laws—minimum lot sizes, multiplex bans, and so on (7). This is because exclusionary zoning limits supply, driving up housing prices. If IZ places an excessive cost burden on developers, deterring development, housing supply will stagnate and shortages will grow. This study reveals an important element of IZ policy. Inclusionary zoning is an incentive game, with many different ways to win—and to lose. Cities have a variety of incentives that they can offer to developers. For Pittsburgh, one key incentive is limiting IZ to neighborhoods with strong housing markets, where developers are already motivated to build (8). This is the case in Atlanta, where IZ regulations are only placed on rapidly gentrifying neighborhoods in order to alleviate displacement (5). Another option is to allow developers to build taller or denser buildings than are normally permitted (8). Boston gives developers this choice in its central downtown area (3), but density bonuses don’t always result in skyscrapers. The policy can be tailored to specific neighborhoods’ average building heights. Many IZ policies also allow developers to build 10-20% fewer parking spaces than required (9). Underground parking garages common to infill developments are expensive—many developers will jump at the chance to lower their cost. Boston (3) and Atlanta (5) both allow developers to pay a fee to the city in lieu of building affordable units, using the money to subsidize other affordable housing developments. Boston also gives developers the option to build a higher number of affordable units in a secondary location within a half-mile of the original building (11).
Still, continued housing shortages in Atlanta and Boston seem to prove that inclusionary zoning is not enough to meet the demand for affordable housing, ending up as a housing lottery rather than a broad social program. Several studies claim that a better route for cities to add affordable housing is land use liberalization (7). This policy, otherwise known as “missing middle” housing, aims to deconstruct zoning regulations by permitting buildings larger than a single-family home and smaller than a mid-rise apartment in traditional residential neighborhoods, including anything from a duplex to a “cottage court” to a stacked triplex (10). While liberalized zoning is a worthy goal, it does not guarantee that multi-family homes will be built, or that they will be affordable. One municipality discussed in the 2021 Northern Virginia study is Arlington, Virginia, where legislation was recently passed to allow “missing middle” housing construction. However, estimates suggest that only 348 of these units will be built per year—many at market rates. This is hardly adequate to meet the 8,800 affordable homes that the county needs (12). Perhaps Pittsburgh should examine a tandem policy of land use liberalization and inclusionary zoning. But in the end, no housing policy is perfect. To choose which policies to pursue, Pittsburgh should weigh outcomes to ensure the construction of a steady stream of affordable housing.
To that end, I recommend a number of adjustments to Pittsburgh’s current IZ policy. To build up the city’s affordable housing stock over time, Pittsburgh should require that rental units created under IZ remain affordable for long periods of time, if not perpetuity. Current Pittsburgh policy states that homes must remain affordable for 35 years. If the building is sold, the clock resets for another 35 years (13). This is more likely to retain affordability for owner-occupied units rather than rentals where one person or company owns the building for long periods of time. In the case of rentals, Pittsburgh should at least consider following Boston’s example and add an additional 20 years to the lifespan of designated affordable units (3). Additionally, as in Boston and Atlanta, Pittsburgh should give developers a range of affordability levels to choose from, while focusing on building as many units as possible. Following Atlanta’s “deep affordability” option, in which 5% of units are reserved for those earning 30% or below AMI, will do little to help most of Pittsburgh’s truly impoverished residents. Finally, Pittsburgh should lower the size threshold for buildings to be placed under IZ regulations. Both Boston and Atlanta’s policies extend to buildings with 10 or more units, while Pittsburgh only requires buildings with 20 or more to include affordable units. Luxury developers could easily build 19-unit buildings in gentrifying Pittsburgh neighborhoods and avoid inclusionary zoning under current legislation.
Pittsburgh is the perfect middle ground for inclusionary zoning. Underdevelopment after the fall of the steel industry has left the city with plenty of room to grow and experiment with affordable housing initiatives. Boston, hampered by its coastline and expensive historical homes, and Atlanta, receiving the Sun Belt population boom, are both facing a housing tidal wave. Pittsburgh, on the other hand, is experiencing something like a slow, rising tide of home values and displacement. As the city continues to revitalize, inclusionary zoning will force development not to leave lower-income residents behind.
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References
(1) Wolfson, Charlie. 2021. “Inclusionary Zoning Is Taking Hold in Lawrenceville. Is the Rest of Pittsburgh Next?” PublicSource. June 16, 2021. https://www.publicsource.org/lawrenceville-inclusionary-zoning-gainey-pittsburgh-peduto-affordable-housing/.
(2) N.d. Atlantaga.gov. Accessed October 19, 2023. https://www.atlantaga.gov/Home/ShowDocument?id=49832.
(3) Brunick, Nicholas, Lauren Goldberg, and Susannah Levine. n.d. “Large Cities and Inclusionary Zoning.” Impactforequity.org. Accessed October 19, 2023. https://www.impactforequity.org/wp-content/uploads/2014/01/Large-Cities-and-Inclusionary-Zoning.pdf.
(4) “Boston’s Inclusionary Development Policy (IDP): An Analysis” n.d. Bostonplans.org. Accessed October 19, 2023. https://www.bostonplans.org/getattachment/a1953ef3-a7d0-4b79-a577-41cfeeeb835f.
(5) Keenan, Sean. 2022. “How to Make Housing Affordable in Atlanta.” Atlanta Magazine. September 26, 2022. https://www.atlantamagazine.com/news-culture-articles/how-to-make-housing-affordable-in-atlanta/.
(6) “Boston Planning & Development Agency Board Approves IDP Changes.” n.d. Beaconhilltimes.com. Accessed October 19, 2023. https://beaconhilltimes.com/2023/07/20/boston-planning-development-agency-board-approves-idp-changes/.
(7) Hamilton, Emily. 2021. “Inclusionary Zoning Hurts More Than It Helps.” Mercatus Center, George Mason University. February 8, 2021. https://www.mercatus.org/research/policy-briefs/inclusionary-zoning-hurts-more-it-helps.
(8) Harris, Connor. 2021. “The Exclusionary Effects of Inclusionary Zoning: Economic Theory and Empirical Research.” Manhattan Institute. August 10, 2021. https://manhattan.institute/article/the-exclusionary-effects-of-inclusionary-zoning-economic-theory-and-empirical-research.
(9) “Incentives.” 2019. Inclusionary Housing. 2019.
(10) Boston Zoning Code: Article 79-Inclusionary Zoning. 2023. https://www.bostonplans.org/getattachment/8d28bbf0-e65b-4b5b-ab40-6f57ef02332b.
(11) “Missing Middle Housing: Diverse Choices for Walkable Neighborhood Living.” 2019. Missing Middle Housing. February 22, 2019. https://missingmiddlehousing.com/.
(12) Gordon, Wyatt. 2023. “Fighting over 348 Units: What’s next for Arlington’s pro-Housing Push?” Virginia Mercury. April 11, 2023. https://www.virginiamercury.com/2023/04/11/fighting-over-348-units-whats-next-for-arlingtons-pro-housing-push/.
(13) The Pittsburgh Code, Title 9, Zoning; Article III, Overlay Zoning District. 2021. https://apps.pittsburghpa.gov/redtail/images/13206_I_ZO_Inclusionary_Housing_Overlay_District_-_Lawrenceville_(2).pdf.
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