Growing Smarter through Affordable Housing, (Foresight, Fall 2000)
By Jaimie Ross, Affordable Housing Director

Smart growth legislation can fall seriously short of its goals if it fails to make some provisions for affordable housing. If the end result is to be smart, responsible planning principles such as limiting density in rural areas or increasing densities in urban areas must include affordable housing as a significant component. Florida's primary piece of smart growth legislation, the 1985 Growth Management Act, requires every local government in the state to adopt a housing element that addresses adequate and affordable housing for all of its current and future anticipated populations. Local governments must ensure that adequate sites are available for affordable housing, including housing for those with special needs, such as farm workers.

While local governments are not expected to build affordable housing, they are required to assist the private sector to do so. To that end, local governments may provide funds to developers seeking state and federal monies, waive or pay impact fees when possible, expedite all permitting for affordable housing, and sometimes adopt regulatory incentives such as linkage fees or inclusionary zoning ordinances.

Florida provides funds to every local government through the collection and distribution of documentary stamp revenue, and requires, in turn, that those local governments expedite all permits for affordable housing. Florida also requires, through the Development of Regional Impact (DRI) process (Chapter 380, Florida Statutes), that large commercial developments ensure affordable housing for the employees they generate, especially when the community lacks adequate affordable housing for those workers. This DRI statute operates as a combination linkage fee and inclusionary zoning ordinance.

Linkage fees are a means for local governments to collect monies to help support affordable housing construction. These fees, collected from nonresidential and market-rate residential development, are placed in a trust fund for others to use in building the lower-cost homes. Linkage fees are important as a recognition that the low-wage workers building the commercial, industrial, and upper-end residential construction need adequate housing within the community that they can afford. Any smart growth legislation should recognize the need for this balance between affordable housing and workers. Provision of such housing further supports smart growth by helping to reduce the economic and environmental costs of transportation where there is no public transit available.

"Inclusionary zoning" is a misnomer; it is a land use ordinance that assists local government in meeting its legal responsibilities under the housing element. It requires developers of multiple market rate units, say 25, 50, or 100, to include some percentage of affordable, lower-cost units, usually from 5 to 20 percent, within their development. In this way, local governments may ensure that the private sector does not use all the developable residential land for middle- and upper-income housing only.

Although inclusionary land use ordinances have at least two concurrent objectives: to increase the supply of affordable housing and to create socioeconomically integrated communities, additional smart growth benefits also accrue. Housing choices are increased, as are diversity in community schools and the amount of affordable housing located near suburban employment opportunities. In addition, every local government receiving federal dollars, such as Community Development Block Grant funds, has a legal obligation to affirmatively further fair housing within its jurisdiction. Inclusionary zoning is the optimum way for local governments to affirmatively further fair housing.

An inclusionary land use ordinance will likely vary a great deal from one jurisdiction to another. Some may apply throughout an entire jurisdiction, others only in high-income areas of a county or city. Some may insist that the affordable units be built on site, while others may allow the developer to build the units nearby, or even to opt out entirely with an in-lieu payment to a housing trust fund. These are just a few of the options that help render each ordinance unique.

There are, however, some elements that all inclusionary land use ordinances are likely to share, including:

1. A threshold number of market-rate units that activates the inclusionary requirement for a corresponding percentage of affordable units;

2. A requirement that the affordable units are comparable in quality and aesthetics to the market-rate units, so that even if they are smaller or of a different type, they will blend into the community;

3. Incentives to assist the private sector in providing the affordable units, such as density bonuses, financial subsidy for construction, or down payment assistance to the affordable-home buyer;

4. A provision for payment in-lieu when the nature of the development (for example, a development of exclusively half-million dollar homes) makes it infeasible to include affordable units; and

5. A housing trust fund as the depository for the payments in-lieu, and a mechanism for using those dollars to provide affordable housing within the community.

The best known inclusionary housing ordinance, in Montgomery County, Maryland, has been in effect for over twenty years. A number of these ordinances also can be found in California and throughout the northeast.

A handful of local governments from South Florida to the Panhandle are in the process of developing and adopting inclusionary land use ordinances. The City of Tallahassee was the maverick in this effort and is presently working to improve the effectiveness of its ordinance.

Affordable housing is a basic necessity for a healthy society, and it would serve every smart growth movement well to incorporate inclusionary land use ordinances as a guiding principle. Socioeconomically integrated communities set the stage for a jobs–housing balance and integrated schools. They also provide a meaningful move forward for low-income families that might otherwise be lost in the concentration of poverty that results from exclusionary zoning and land use practices.

For more information on inclusionary zoning, or assistance with developing an inclusionary housing ordinance, you may contact Jaimie Ross, Affordable Housing Director, at 850.222.6277.

NOTE

Florida law requires in the Development of Regional Impact (DRI) process (Chapter 380, Florida Statutes), that large commercial developments ensure affordable housing for the employees they generate, when the community lacks adequate affordable housing for those workers. This DRI statute operates as a combination linkage fee and inclusionary zoning ordinance. Unfortunately, the DRI statute has been largely ineffective at producing affordable housing. An inclusionary housing ordinance can change that. The inclusionary housing ordinance could be drafted to apply to both commercial and residential developments, and could make irrelevant the time consuming, costly, and arduous process of DRIs. The inclusionary housing ordinance is a land development regulation that requires no expensive studies from the developers and can be easily and equitably applied in a routine fashion.

Linkage fees are a means for local governments to collect monies to help support affordable housing construction. These fees, collected from nonresidential and sometimes, market-rate residential development, are placed in a trust fund for others to use in building the lower-cost homes. Linkage fees are a recognition that the low-wage workers employed in the nonresidential development and serving the residents of the market rate and upper-end residential homes need adequate housing within the community that they can afford; it a recognition that affordable housing an essential basic necessity for a healthy community.