Dec 4, 2018: An inclusionary zoning policy on housing is well-justified

As stakeholders throughout the Twin Cities explore tools to address the affordable housing crisis, the Alliance’s Russ Adams weighed in with a commentary in the Star Tribune on December 4, countering the narrative from developers’ that an inclusionary zoning policy in Minneapolis could hinder production of affordable housing. 

In his Nov. 28 commentary, “Mpls. considers a tool that can be useful, if used wisely,” Steve Cramer contends that a new inclusionary zoning policy that ensures private developers play a modest role in addressing our affordable-housing crisis could stifle production with overregulation.

But Cramer, president of the Minneapolis Downtown Council, leans on arguments that have long been debunked by both scholarly research and a successful track record in hundreds of U.S. cities.

There’s no debate that Minneapolis is in the midst of an affordable-housing crisis. We see that in the tents lining the Wall of Forgotten Natives and the more than 42,000 renter households in Minneapolis who, despite working full time (or more), pay more than they can afford for housing.

Taking seriously their rightful role to regulate zoning and land-use decisions for the public good, the Minneapolis City Council, under the leadership of Council President Lisa Bender, is on the verge of passing a historic and long-overdue inclusionary zoning policy that establishes firm, fair and predictable rules that will guide new growth and result in the production of hundreds of new affordable apartments.

Minneapolis will be joining the ranks of cities that have tired of seeing longtime residents displaced by rampant market-rate development, predatory lending and apartment flipping. Nearly 900 inclusionary zoning policies have been passed in 25 states and the District of Columbia, and more than two-thirds of those measures are mandatory policies requiring proactive steps by developers.

Given the severity of the housing crisis and the daily impact on thousands of our neighbors, the inclusionary zoning policy asks private developers to play a small role, ensuring that just 10 percent of their units are affordable — for example, one-bedroom apartments that rent for no more than $1,062 per month. For developers seeking city financial assistance, we rightly ask for more: at least 20 percent of units at deeper levels of affordability — for instance, one-bedroom apartments that rent for no more than $885.

Make no mistake, this policy doesn’t expect the private market to address the more challenging aspects of the affordable-housing crisis. Households with the greatest needs, people on fixed incomes, making a minimum wage or living on the economic margins, will need additional public subsidies just to achieve rents ranging from $530 to $630 per month.

But it’s naive to ignore the role that unfettered private market forces have played in getting us to the point that nearly half of Minneapolis renter households have to choose between paying their rent and buying groceries or medicine. If they want to be part of our community, it’s past time for private developers to be part of a regulated market-based solution. Minneapolis prides itself on progressive innovation, and our region is home to experienced nonprofit housing developers who know how to make projects that serve the common good “pencil out.”

What would this look like on the ground? Let’s take the hotly debated proposed triplex policy, which would open the door to upzoning single-family homes and replacing them with three units instead of one. Without an intentional policy that requires a measure of affordability, we’ll get the same thing we’ve gotten in thousands of new apartments that have sprung up in the North Loop, Stadium Village, Uptown and Downtown East: pricey market-rate apartments, because that’s what the market favors.

Without modest regulatory intervention, the private sector will continue to do what it does best, churn profits and produce higher-priced housing that leaves thousands of Minneapolis families struggling to find and maintain shelter in the frigid Minnesota winter.

Even Cramer acknowledges that “adding a sound IZ policy as a new tool will help” address our urgent housing challenges. We agree. The sound policy proposed by Minneapolis leaders will be applied evenly, establish clear expectations and set ground rules that every developer will play by — with no loopholes allowing builders to opt out of the obligation to contribute to our city’s desperate need for new housing that’s at least modestly affordable.

Leaving our future housing opportunities solely to the whims of market forces hasn’t worked.