PRESS RELEASE

March 11, 2004

Washington, DC — California cities and counties are at the forefront of an innovative affordable housing practice called inclusionary zoning that is benefiting thousands of households, according to a new report from the National Housing Conference (NHC) entitled Inclusionary Zoning: The California Experience. Through the release of this report and additional findings, the goal of housing experts is to introduce 30 years of best practices and to further accelerate the adoption of a proven affordable housing strategy across California and throughout the nation.

Compelling trends reveal that over the next few years the number of California communities adopting inclusionary zoning practices for affordable housing is likely to continue at a rapid pace. From 1994 to 2003, there was a 67% increase, from 64 to 107 communities—about 20% of all California cities and counties. Based on the latest data, compiled in conjunction with the release of the report, this pace is expected to increase by nearly 50% in the next five years.

Also referred to as inclusionary housing (IH), this unique practice helps ensure the construction of much needed low- and moderate-income housing by requiring developers to set aside affordable units in an otherwise market-driven development. Ultimately, focusing on the possibility for and benefits of IH is more critical than ever since the funding of other affordable housing programs is being threatened by a tightening federal budget. In particular, within the FY 2005 budget proposal funding for Section 8 housing vouchers is at least $1.5 billion below what is needed to fund all contract renewals under current program rules. The budget proposal also eliminates the successful HOPE VI program, which helps to replace distressed public housing with mixed-income communities.

“Federal spending cuts have sharply reduced the essential role that government programs and subsidies have historically played in the provision of housing for low-income families in California and nationally,” said Nico Calavita, editor of the new report and professor in the Graduate Program in City Planning at San Diego University.

“This momentous shift has ultimately placed the burden of providing housing that the market will not produce squarely on the shoulders of states and localities – as a result, the local approach of inclusionary housing is accelerating at a rapid pace across the state,” Calavita continued.

One of the primary advantages of IH is that it does not require a large investment, or in some instances any financial investment at all, by local governments. However, it is advisable that communities provide incentives and cost offsets to developers as part of their programs. As outlined in the new report, under most circumstances incentives and cost offsets will not impact the price of land and, or, profits to developers, and most importantly the cost of market rate housing.

Another advantage of IH is that it helps to integrate those with different ethnic and financial backgrounds. The communities themselves also benefit from this integration because of the need for both a low- and moderate-income workforce, an issue of increasing importance when considering recent related data.

For example, based on findings from NHC’s research affiliate the Center for Housing Policy, low- to moderate-income working families in the West are more likely to lack decent, affordable housing than in any other region. In San Francisco, for instance, none of the city’s elementary school teachers, police officers, licensed practical nurses, retail sales persons or janitors could afford to rent a two-bedroom apartment based on the accepted standard of spending no more than 30 percent of their income on housing.

Efforts in California such as Proposition 46, a $2.1 billion housing bond approved by voters in 2002, tax credits and other initiatives have led to the distribution of funds for affordable housing throughout the state. Yet, despite these efforts there is still a clear and unmet need for affordable housing, and experts caution that IH will not solve the housing crisis and that any serious effort to address the needs of low- and moderate-income populations must call upon a more comprehensive range of tools and remedies.

Numerous organizations throughout California have contributed to this new and wide-reaching report. They include the California Affordable Housing Law Project; California Coalition for Rural Housing; NHC regional affiliate the California Housing Consortium; Century Housing; David Paul Rosen & Associates; National Housing Development Corporation; and the Non-Profit Housing Association of Northern California.

The new report is the third in a series of NHC publications dedicated to the issue of inclusionary zoning. Previous publications on the subject include Inclusionary Zoning: Lessons Learned in Massachusetts and Inclusionary Zoning: A Viable Solution to the Affordable Housing Crisis? which examines the issue of inclusionary zoning from a broad range of national perspectives.

To view these reports, as well as the new report and additional related information, please go to www.nhc.org.