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April  27

Izo Factor Approved: One In Seven

After months of debate to come up with a building standard that will maintain economic diversity, Montclair town council came up with the formula for the Inclusionary Zoning Ordinance. Tuesday night's vote means developers will be required to build one affordable housing unit for every six homes selling at market rate.  From the Montclair Times:

The law, which has been amended several times since it was proposed last year by the Montclair Housing Commission (MHC), mandates that certain housing units remain perpetually affordable. It pertains to residents who earn between 50 and 80 percent of the area medium income.

The ordinance, considered vital in maintaining reasonably priced homes in the midst of Montclair’s booming real estate market, applies to all new residential developments, including the creation of cooperatives and condomini-ums.

The one-in-seven-units is a more aggressive version of the council’s initial proposal of one affordable unit for every nine market-rate homes built.

Developers will have to pay a fee of $180,000 per six units, effectively meaning that someone constructing one single-family home would have to pay one-sixth of every unit built, or $30,000, to a fund controlled by the munici-pal government to assist in the creation of affordable housing. If a developer builds an apartment, then the IZO fee would be $15,000.

April 27, 2006 in Current Affairs | Permalink

Comments

It's a stupid law that simply creates a special subset of favored lower-income people. You want affordable housing for real? Then loosen zoning requirements.

Posted by: appletony | Apr 27, 2006 9:22:14 AM

"Developers will have to pay a fee of $180,000 per six units, effectively meaning that someone constructing one single-family home would have to pay one-sixth of every unit built, or $30,000, to a fund controlled by the munici-pal government to assist in the creation of affordable housing. If a developer builds an apartment, then the IZO fee would be $15,000."

Progressivism at work!

The "fee" will be charged to the developers and pass to the city - that's a tax!

Where will this money come from? The developer will *increase* the cost of the *other* six units.

So, six units will pay *more* so that one can pay less.

We are unequally taxing a few people to pay for our social policies.

Pregressivism at work!

Posted by: Right of Center™ | Apr 27, 2006 9:31:38 AM

But, on the bright side. As with most governmental price control schemes, the likely result will be fewer new homes which will drive *up* values.

Posted by: Right of Center™ | Apr 27, 2006 9:40:50 AM

Speaking of zoning, anyone out there know if it's legal for someone to run a "doggie daycare" out of their house? A neighbor keeps about twelve barking dogs in her backyard from 7am to 9m, 7 days a week. Calls to her have been ignored, police visits have done nothing. I think it's a zoning issue. Doesn't something like that fall under commercial zoning?

Posted by: bb | Apr 27, 2006 9:41:53 AM

I would think so, bb.

(Unless, of course, the dogs are of an historic breed.)

Posted by: Right of Center™ | Apr 27, 2006 9:44:49 AM

I think there is a an ordinance that limits the number of dogs one *owns*, owns being the operative word here. There was a similar case in Montclair about a year ago where a woman owned about a dozen chihuahuas and her neighbors complained. I would check with the town.

Posted by: Miss Martta | Apr 27, 2006 9:49:41 AM

Right of Center - you make some good points. But how would you address the affordable housing issue? What plan would you recommend?

A laissez-faire, let the market manage itself? Just curious.

Nancy Mehegan, Montclair

Posted by: quaker-oats | Apr 27, 2006 10:07:42 AM

Cost go down when the supply goes up. It's economics 101. When government tries to *force* the price down, all sorts of un-intended consequences take place.

Zoning prevents economic diversity because, well, economic diversity also means (shh!!) the riff-raff.

If you truly want economic diversity, you'd allow more inexpensive (cheap) apartment buildings to be built in the hallowed suburban neighborhoods of Montclair.

You'd allow more 2-family zoning, etc.

But, we cannot allow that! Can we?

IZO is just a way the privileged "guilty" progressives of Montclair can feel like they are taking a "stand" for economic diversity. And the best part (like nearly all progressive policies) someone *else* can be made to pay for it!

If you wanted to do this in an honest way, the township would buy outright one in seven homes at the market price and then resell it for less, taking the loss and spreading it out among all the citizens and not just the unlucky few.

Posted by: Right of Center™ | Apr 27, 2006 10:19:52 AM

Montclair can be proud that its desire for inclusion will mean that our lovely town will not only be available to the lower upper class, but to the upper middle class as well!

Posted by: Right of Center™ | Apr 27, 2006 10:26:15 AM

I'm not sure this is good policy either, even if I share the desire for a diverse population in Montclair. But in response to ROC:

A tax policy that affects the pricing mechanism is actually a good one. Unlike many other taxes, this one becomes voluntary -- if you don't like the extra cost, you don't buy the house. It's a well-directed tax for the most part. The market adjusts supply/demand such that people who are willing to pay, do.

Now one thing that bothers me: a family buying a house for 400,000 pays the same fee as a family buying a house for 2 million, while the family with the more expensive house has obviously pushed up the town's average income more than other family. I find that hard to rationalize, though I haven't yet thought of a good way to figure out how to scale the fees -- perhaps by initial assessed property value?

Posted by: DavidG | Apr 27, 2006 10:27:56 AM

The affordable housing issue will be dealt with when people are priced out of Montclair and move by necessity to the fringes of blighted areas, which then get fixed up. Case in point: the new "hot" neighborhood in Brooklyn is Bedford Stuyvesant! Freakin' Bed-Stuy. Why? Pure economic pressure. And it's a good result.

Posted by: appletony | Apr 27, 2006 10:33:22 AM

"Now one thing that bothers me: a family buying a house for 400,000 pays the same fee as a family buying a house for 2 million, while the family with the more expensive house has obviously pushed up the town's average income more than other family. "

Of course, a fee of zero would certainly be fair.

Posted by: Right of Center™ | Apr 27, 2006 10:33:52 AM

Google "Inclusionary Zoning Ordinance" and you will find that IZOs have been responsible for tens of thousands of affordable units throughout the country. They are a very effective means of influencing development to yield benefits for the community. Our IZO requires that developers who are receiving the benefits of building in Montclair will also return a benefit to Montclair. This is only the first step for the Housing Commission and we are very proud that it has been accomplished. The Town Council did a thorough job of examining the ordinance and its possible effects. The Commission welcomes input from the community about other means to increase and maintain affordable housing within Montclair.

Posted by: Helen | Apr 27, 2006 10:39:06 AM

Basic question: why is it desireable to increase affordable housing in Montclair? Seriously. If it's to make it so our teachers and cops can live here, then supplement their incomes. All you're doing is meddling in the market in a way that will actually increase overall housing prices for the benefit of a very select few.

Only the limited numbers of actual dwellers of the new, artificially cheap houses will benefit: if the select few can only resell at reduced rates, they'll never move and if they can resell at market rates, they'll flip the houses.

Who gets to pick this new priviledged class?

Posted by: appletony | Apr 27, 2006 10:44:29 AM

How much is considered "affordable" in Montclair anyway? I'm sure it's not cheap enough to bring in all this "riff raff" that some of you speak of. I guess I can consider myself riff raff.

Posted by: jennnnn | Apr 27, 2006 11:02:43 AM

Helen here is what I found:

"Inclusionary zoning should only be enacted if the goal is to make housing more expensive and decrease the quantity of new housing." link (pdf)

"Inclusionary Zoning Makes Housing Less Affordable" link

"INCLUSIONARY ZONING: Growth study suggestion a proven failure - Price controls reduce availability of housing" link.

"Housing Problems Require Supply-Side Solutions. It is time to acknowledge inclusionary zoning’s failure and look for real solutions to the shortage in affordable homes" link.

"A Huge Hidden Tax on New Homes -- 'Inclusionary zoning' - meant to yield affordable housing - takes heavy toll" link

"Affordable-housing mandates hurt more than they help" link

Posted by: Right of Center™ | Apr 27, 2006 11:05:06 AM

"Who gets to pick this new priviledged class?"
I wager you can guess who in less than three guesses

Posted by: Byron | Apr 27, 2006 11:10:50 AM

"It pertains to residents who earn between 50 and 80 percent of the area medium income."

I presume "median income" is intended. If so, that means 80 per cent of the population is eligible for subsidized housing.

Posted by: Byron | Apr 27, 2006 11:12:51 AM

oy vey! my spelling sucks this morning.

privileged
desirable

/there, I feel better.

Posted by: appletony | Apr 27, 2006 11:17:53 AM

"Now one thing that bothers me: a family buying a house for 400,000 pays the same fee as a family buying a house for 2 million, while the family with the more expensive house has obviously pushed up the town's average income. "

Oh, now I understand the "evil" at which IZO is directed. It's designed to prevent the town's average income from going up.

Posted by: Byron | Apr 27, 2006 11:20:45 AM

Gentrification, by its nature, is going to restrict income diversity.

Look at the big houses on Walnut Street which used to have 4-5 tenants and are now single family owned. Where do you suppose the four single parents with kids, four young people starting out, the new firefighter, etc went?

Posted by: Paul from OB | Apr 27, 2006 11:28:16 AM

hmmmm, actually doesn't even help keep the income average down. By sharply increasing the cost of new construction it means that only even higher income people can move in.

Posted by: Byron | Apr 27, 2006 11:29:36 AM

Right of Center,
Your sources are well-known for libertarian biases. Try these (sorry I don't really know how to do the links the way you do, but I hope this is helpful):
1. Madison’s New Inclusionary Zoning OrdinanceBrings Promising Results
http://www.fanniemaefoundation.org/programs/hff/v8i1-madison.shtml
2. Inclusionary zoning programs have been found to constitute an important source of affordable housing production in the jurisdictions where they exist.
http://www.brookings.edu/es/urban/knight/g3.htm
3. Inclusionary Zoning ordinances have produced, since 1999, over 11,000 affordable units in the greater Washinton region (page 13 of the report).
http://www.brookings.edu/es/urban/publications/inclusionary.pdf
4. National Housing Conference report finds: Inclusionary housing has emerged as a powerful tool to expand the supply of affordable housing in California.
http://www.knowledgeplex.org/showdoc.html?id=17692

Posted by: Helen | Apr 27, 2006 12:10:53 PM

I tend to agree with ROC and Appletony on this, thus proving I don't agree with EVERY liberal progressive idea out there! ;-) I think these types of artificial things can have unintended consequences, and as a resident of Bloomfield we would welcome the "less affluent" folks priced out of Montclair - the rising tide raises all boats. And those priced out of Bloomfield go to East Orange, thus improving their neighborhoods and so on. Artificial things like this (including the Mt. Laurel decision) often just result in bigger developments with more sprawl.

Posted by: mauigirl52 | Apr 27, 2006 12:22:26 PM

Helen,

Do you really mean to suggest that sites like http://www.wphd.org/

"The Wisconsin Partnership for Housing Development creates partnerships for affordable housing and neighborhood revitalization. Since its founding in 1985, the Partnership has compiled a lengthy record of success in making housing and neighborhoods work for people."

Is somehow less biased a source?

THEY lobbied for IZO in Madison!

Posted by: Right of Center™ | Apr 27, 2006 12:25:50 PM

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