Incentive Zoning:Wrong Problem, Wrong Solution

There is abundant quantitative evidence that puts to rest the idea that there is a lack of “workforce” housing. The market is producing many new units of housing priced at 30 percent of he monthly income of people who earn 60 to 80 percent of Area Median Income (AMI).

The City Council may have already made up it’s mind about incentive zoning, but hopefully they heard the expert panel at last week’s housing forum affirm what we’ve already been saying: create a housing policy that allows for a lot more housing for people at all levels of income. The biggest housing supply problem is housing priced for people with lower incomes, less than 60 percent of AMI.

What is just as important is the critical point made at the forum that the tool the City is using and wants to keep using to address housing prices won’t help housing supply or price; incentive zoning makes the problems of supply and price worse by adding costs and risk to housing that’s already meeting workforce housing demand.

The slide show from the Downtown Seattle Association below lays out the case clearly. It is important to note that developers are walking away from the “incentive” because it really isn’t an incentive; of the projects citywide eligible for the program 62 percent didn’t participate. If there was financial benefit to paying for additional wouldn’t developers take advantage of that benefit? But there isn’t a benefit for most projects, that means less housing got built.

The slide show makes the case against incentive zoning with publicly available data from local governments, information available to the Council and their staff.

The City needs a comprehensive approach to housing that boosts supply, allows for sustainable growth in our city, and addresses the needs of people who struggle with poverty.

However, imposing fees on new growth and price controls on new housing will limit supply, drive up costs, and, in the end, pit renter against renter for scarce housing, a bidding war poor people lose every time.

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