Streng ngthenin ning D DCs Incl clus usio iona nary Z Zoning - - PowerPoint PPT Presentation

1 F e b rua ry 26, 2013

2221 14th St, NW, 30-unit building with 4 IZ units under construction near the U Street Metro

Streng ngthenin ning D DC’s Incl clus usio iona nary Z Zoning ng

Presented to the

DC Zoning Commission

Case No. 04-33G On behalf of the

DC Campaign for Inclusionary Zoning

Cheryl Cort,

Coalition for Smarter Growth

Claire Zippel,

DC Fiscal Policy Institute

January 28, 2016

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

 IZ production is

ramping up with 767 IZ units produced or in pipeline

 Administrative

changes eased sticking points – but potential for further improvement

With Production Ramping Up, Time to Revisit

Inclusionary Zoning Production is Ramping Up

Source: DC Office of Planning set-down report on case no. 04-33G. Includes IZ units in matter-of right developments, PUDs, and subsidized affordable developments.

50 100 150 200 250 300

2010 2011 2012 2013 2014 2015 In Pipeline

IZ units produced or in pipeline, IZ-compliant developments

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. 04-33G.

Skew Is Unintended Consequence of Design

IZ Income Targeting and Set-Asides

Residential zones All other zones Low density zones / Stick construction Higher set-aside Split between 50% & 80% AMI Split between 50% & 80% AMI High density zones / Steel construction Lower set-aside Split between 50% & 80% AMI All 80% AMI

Source: 11 DCMR 2603. Higher set-aside: Greater of 10% residential FAR or 75% bonus

• density. Lower set-aside: Greater of 8% residential FAR or 50% bonus density.

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 $52,400 16.3% 1,660 70-80% AMI $69,900 5.2% 311

Source: DCFPI analysis of 2014-2013 American Community Survey. Margin of error: 50-60% AMI: ±0.7%; 70-80% AMI: ±0.5%.

80% AMI Rentals Are Misaligned With Need

Workers at 60% AMI Are Key Part of DC Workforce

Income Level Maximum Income

2- person household

Sample Occupations 60% AMI $52,400

Administrative assistant Retail & food preparation supervisor School bus driver Maintenance worker

80% AMI $69,900

Legal support worker Educational counselor Sales representative Internist (M.D.)

Source: DC Code § 42–2801; US Bureau of Labor Statistics, Occupational and Employment Statistics for the District of Columbia, 2014.

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 $1,6

,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. 04-33G.

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

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 F e b rua ry 26, 2013

Land Value Impact Analysis Shows Minimal Impacts on Rental Development

Zones are in order of by development capacity as determined by OP study

Impact on Market Zone Income Targeting Change Current IZ Scenario 1B Modified Scenario 1B

C-2-A 65-60

• 2.7%
• 6.6%

3.9% CR 80-60 18.4% 15.5% C-3-A 80-60 16.5% 20.6% R-5-A 65-60

• 9.8%
• 15.6%
• 0.4%

R-5-D 65-60

• 4.4%
• 9.5%

0.0% C-2-B 80-60 14.6% 4.5% R-5-B 65-60

• 3.8%
• 8.0%

3.2% C-3-C 80-60 18.1% 13.8% C-2-C 80-60

• 0.7%
• 2.9%

W-3 80-60 18.4%

• 6.1%

5.5%

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

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

Zone Impact to Market Base IZ Scenario 1B Modified Scenario 1B Modified 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%