Article Published: Thursday, June 10, 2004 - 6:28:57 PM PST
Below-market housing a failure
By James Nash
Staff Writer
Southern California cities that require developers to set aside part of
their projects as affordable housing -- as Los Angeles is considering --
have experienced higher housing prices and decreased construction of
low-income housing, a Libertarian think tank reported Thursday.
The Los Angeles-based Reason Foundation concluded that so-called
inclusionary zoning ordinances have backfired in 13 Southern California
cities where the laws were enacted to force developers to build more
below-market housing.
Each of the 13 cities saw housing construction decrease after adopting the
zoning laws, the foundation reported. And the cost of new homes jumped
$33,000 to $66,000 to compensate for discounts on the mandated below-market
The cities' experiences should serve as a cautionary tale for Los Angeles
officials, who are considering whether to require developers to include
units for people of low and moderate incomes in nearly all projects, said
foundation Vice President Adrian Moore.
"The number of affordable homes that were built actually went down, rather
perversely," Moore said of the other cities his foundation studied. "It's a
lose-lose on every front."
Los Angeles City Council members Ed Reyes and Eric Garcetti, who have
championed the inclusionary zoning proposal under consideration, said the
Reason Foundation's libertarian philosophy likely skewed the results.
Garcetti said the Reason Foundation looked only at homes for sale, not
rental properties. Reyes said the foundation looked at inclusionary zoning
in isolation, whereas city officials are considering it as part of a package
of measures to enlarge the city's stock of affordable properties.
"From my perspective, inclusionary zoning alone is not the answer," Reyes
said. "The question for me is, how do we shape an inclusionary zoning policy
in the context of everything else we're doing."