Creating affordable housing calls for the stick, not the carrot. Asking nicely if developers would pretty please satisfy the overwhelming demand for housing priced within HUD standards of affordability is like giving the fox unfettered access to the hen-house during an egg shortage and politely asking it to curb its appetite. Meanwhile, I’m reading market analysis reports coming out of the Home Builders Association stating that the reason for the abrupt decline in construction permits since January is because supply is meeting demand not because they scrambled to get their permits in before Inclusionary Zoning kicked in. And on that note, all one has to do is look around to call bullshit.
Some people talk about development as if it is a person with a moral compass that will voluntarily choose to make less than the maximum profits in order to contribute to the greater good, to do the right thing rather than the most profitable. But corporations are not people, development is a business, a market force … and it’s like a gas, it will expand to the absolute limits of what is allowed by law, not fall short of its maximum expansion potential by choice – it follows the path of least resistance and maximum profits.
Without regulations which prohibit the demolition of sound and habitable housing, then development will do just that in order to replace affordable stock with new construction that will garner the highest ROI. If Inclusionary zoning seeks to incentivize adding affordable supply in central core and Gateway districts, then development circumvents those areas where its profit margins are impinged upon by IZ and expands around them instead. We need more regulations not less. Incentives only work when there is as much if not more profit to be made when choosing A over B, otherwise this is what we get – more luxury housing, more displacement, more inflation, more misery.
Development is not going to build more affordable housing if we remove the chicken-wire from the hen-house, it’s just going to kill more chickens and triple the price of eggs.