Tag: IZ

Statement of support for inclusionary zoning by DC Campaign for Inclusionary Zoning

This statement is submitted on behalf of the Campaign for Inclusionary Zoning regarding Zoning Case 04-33G. We want to thank the Commission for its interest in this case. The District is experiencing an affordable housing crisis of historic significance. As DC’s economy and population grows, housing prices rise, and low-income DC residents with stagnant wages are left struggling to pay for housing. In this environment, the District must take action to sharpen each tool in the city’s affordable housing toolbox, especially inclusionary zoning, the only tool that by design creates affordable homes in high-cost neighborhoods.

Campaign to Strengthen DC’s Inclusionary Zoning Affordable Housing Program Briefing

Event Materials:

Supporting Materials:

Event Description:
October 22, 2015 | held at DC Fiscal Policy Institute (DCFPI)


David Bowers, Enterprise Community Partners

Claire Zippel, DC Fiscal Policy Institute

Cheryl Cort, Coalition for Smarter Growth

DC Affordable Housing Alliance and the Campaign for Inclusionary Zoning convened a briefing for affordable housing and social justice advocates to learn how the city’s newer affordable housing programs, Inclusionary Zoning, can better serve the people it was intended to help.

The briefing covered how DC’s Inclusionary Zoning regulations are working, and how they can be improved to offer more affordable housing for lower income DC residents. The advocates briefing was in preparation for the January 28, 2016 public hearing by the DC Zoning Commission to consider changes to the IZ regulations to better serve low income people.

RELEASE: Housing advocates commend DC Council resolution urging action to expand affordable housing production through Inclusionary Zoning

Today, housing advocates applauded nine DC Councilmembers for introducing a resolution encouraging the DC Zoning Commission and Mayor Bowser to strengthen a promising market-based affordable housing program. At-Large Councilmember Elissa Silverman, along with eight of her colleagues, introduced the resolution. The measure encourages the Zoning Commission and Mayor Bowser to act to strengthen the city’s Inclusionary Zoning (IZ) program, which sets aside a certain number of permanently-affordable units in most new residential construction.

RELEASE: DC housing advocates call on Mayor Bowser to start tenure with important move to increase affordable housing

EMBARGOED until 9:00AM
January 7, 2015

Contact: Cheryl Cort, Coalition for Smarter Growth
O 202-676-0016 x 122
M 202-251-7516

WASHINGTON, DC — Today, DC housing advocates called on Mayor Muriel Bowser and the DC Zoning Commission to strengthen Inclusionary Zoning, an affordable housing program that requires lower priced units to be produced as a part of most new developments.

The groups released a letter (PDF) calling for lowering income targeting to better serve low and moderate income households who are priced out of DC’s ever more expensive housing market. The groups noted that a strong Inclusionary Zoning (IZ) program is an important part of a robust set of tools to address DC’s growing affordable housing crisis. Among the organizations calling for improving DC’s IZ program are: Coalition for Smarter Growth, Metropolitan Washington Council AFL-CIO, DC Fiscal Policy Institute, Jews United for Justice, City First Homes, PolicyLink and Somerset Development.

“This policy has great potential to help address the needs of working people who are priced out of the District of Columbia. Now is the time to strengthen Inclusionary Zoning to ensure it is a more effective tool to make living in DC within reach for moderate and low income workers,” said Joslyn Williams, president of the Metropolitan Washington Council, AFL-CIO.

After years of delay, the housing program is beginning to produce hundreds of units. Given that DC is even less affordable than it was when the policy was established in 2006, the housing activists urged the Zoning Commission to revise the policy to ensure that it is meeting the city’s growing need for more affordable housing.

For more than a year, the Zoning Commission and the Mayor Gray administration had expressed their intent to revise the policy, but have delayed any action. The groups urged the city to act now, citing the recent report by the Urban Institute reviewing the DC IZ program performance to date, and its recommendations for improvements.

“DC’s Inclusionary Zoning affordable housing program is fundamentally sound but needs to be strengthened. Most importantly, we need to create more homes at lower income levels through this policy to better meet the needs of city residents facing the greatest housing challenges,” said Cheryl Cort, Policy Director for the Coalition for Smarter Growth, and a founding member of the Campaign for Mandatory Inclusionary Zoning, the group that won the original policy in 2006.

In a letter submitted to the Zoning Commission and Mayor Bowser, the advocates asked that the Zoning Commission act to strengthen the Inclusionary Zoning program to ensure it can best achieve its goal to create a mix of low and moderate income affordable housing throughout the District.  Citing a continued strong housing market, rising prices, and stagnant and falling incomes, the group asked for several changes to the current policy. These proposed changes include: lowering the income limits for moderate income IZ units, increasing the share of low income units produced, increasing the total percentage of IZ units required, and ensuring bonus density is available to provide compensation for the cost of the affordable units.

“DC’s Inclusionary Zoning program is on the right track, but needs to be improved to ensure we are reaching those who most need the help,” said Jacob Feinspan, Executive Director, Jews United for Justice.

The letter submitted to the DC Zoning Commission and Mayor Bowser, was signed by:

Cheryl Cort, Coalition for Smarter Growth
Joslyn N. Williams, President, Metropolitan Washington Council, AFL-CIO
Ed Lazere, DC Fiscal Policy Institute
Jacob Feinspan, Jews United for Justice
Angie Rodgers, People’s Consulting
Jim Steck, City First Homes
Jim Campbell, Somerset Development
Tad Baldwin, retired housing developer
Kalima Rose, PolicyLink

About the Coalition for Smarter Growth

The Coalition for Smarter Growth is the leading organization in the Washington DC region dedicated to making the case for smart growth. Its mission is to promote walkable, inclusive, and transit-oriented communities, and the land use and transportation policies and investments needed to make those communities flourish. Learn more at smartergrowth.net.



Testimony before the Hon. Muriel Bowser, Chair of the Committee on Economic Development and Housing re: FY 2014 Budget Oversight for DMPED and DHCD

Please accept these comments on behalf of the Coalition for Smarter Growth. We are a regional organization based in the District of Columbia focused on ensuring transportation and development decisions are made with genuine community involvement and accommodate growth while revitalizing communities, providing more housing and travel choices, and conserving our natural and historic areas.

DMPED should recommit to leveraging public land dispositions for affordable housing

We are greatly disappointed in DMPED’s reduced expectations for affordable housing in new public land dispositions. Given the increasing challenge of housing affordable to our residents, we urge the Council to ensure DMPED recommit to leveraging public land dispositions for affordable housing, including for very low income households. In our 2012 report, Public Land for Public Good, we show that the District has and can do great things with its city-owned land. We are disappointed that DMPED is departing from the practice of the past decade to ask for 20-30 percent of affordable housing in public land dispositions affordable to households earning 30%, 50%, 60% and 80% Area Median Income (AMI). We are also surprised that the Mayor’s Housing Task Force dropped any recommendation to make the most of public land sales for affordable housing and sent this issue to the future study list.

Under DMPED’s current leadership, commitment to affordable housing in solicitations for public land dispositions has steeply declined. DMPED no longer asks for a specific percent of affordable housing or specific income levels. Instead, DMPED asks that proposals comply with or exceed the Inclusionary Zoning (IZ) law, which is already required for most residential development. IZ sets a minimum of 8-10 set aside at 50-80% AMI, with most income targeting at 80% AMI. To compensate, developments receive a 20% bonus density. Given the city can (and used to) leverage the value of its own land to subsidize housing, we should expect much more from public land deals. We recommend that DMPED restore the earlier practice of to asking for a 20-30% set aside with income targeting at the 30% AMI, 60% AMI and no more than 80% AMI income levels. (See tables 1 & 2 below).

This drop off in affordable housing in public land dispositions as a priority is particularly surprising given the attention the administration has put on renewing efforts to preserve and create more affordable housing. Public lands are an important tool for creating new affordable housing that the administration should not abandon now. We ask the council to ensure we are making the most of the unique opportunity to leverage the value of the District’s land to create more affordable housing through the public land disposition process. Public land disposition and development requests should clearly ask for and prioritize proposals that offer substantial amounts of affordable housing, including units affordable to those earning 30 percent AMI. As was the practice in the past, we ask that requests specify the city is seeking 20 percent to 30 percent of the total number of residential units affordable at 30 percent and 60 percent AMI for rentals, and up to 80 percent AMI for ownership. We suggest table 2, below, as a model. In addition, we ask that DMPED better coordinate with other agencies to pool resources to ensure the production of housing affordable at deeply affordable levels as a part of larger mixed income or all affordable development.

DHCD – support $100 million to affordable housing, ensure IZ & ADUs have support they need

Regarding DHCD’s budget, first and foremost, we want to express our support for the $100 million commitment to affordable housing, with $87 million going to the Housing Production Trust Fund. We commend the Mayor for this commitment and ask the Council to support this. These funds are critically important to addressing our city’s escalating housing prices that are burdening a large share of D.C. households with higher and higher housing costs.

Inclusionary Zoning & affordable dwelling unit management

IZ administration has experienced significant problems in the start up phase. DHCD has indicated that is making headway addressing these significant challenges. DHCD will propose revisions to overly cumbersome administrative regulations, which should improve the process. DHCD has worked with Office of Planning and the Zoning Commission to resolve conflicts with FHA mortgage lending standards. DHCD has solicited for additional assistance to implement IZ and Affordable Dwelling Unit (ADU) programs. These are all important steps to addressing the major administrative challenges IZ implementation has encountered. We remain concerned that the office responsible for administering IZ and ADUs is understaffed. We suggest that at a minimum, and new Capital City Fellow be added to their small team.

I want to thank Director Michael Kelly and his staff for their openness and responsiveness to us.

Thanks also to Chairman Bowser’s keen interest in ensure these programs work, and affordable housing opportunities are increased.

Thank you for your consideration.


Cheryl Cort
Policy Director

Table 1
Table 2

Testimony before the Hon. Muriel Bowser, Chair, Committee on Economic Development and Housing Council of the District of Columbia regarding: DHCD Performance Oversight – Inclusionary Zoning

Please accept these comments on behalf of the Coalition for Smarter Growth. We are a regional organization based in the District of Columbia focused on ensuring transportation and development
decisions are made with genuine community involvement and accommodate growth while revitalizing communities, providing more housing and travel choices, and conserving our natural and historic areas.

We would like to comment on DHCD’s administration of the Inclusionary Zoning program. We have been involved with Inclusionary Zoning (IZ) since its beginning in 2003 and remain committed to ensuring that this important affordable housing program delivers on its promise. We are gratified that IZ is finally becoming a reality on the ground given the delays in issuing regulations, the housing market collapse, and extensive grandfathering. The start up of this program has faced many serious challenges, but we believe all these challenges can be overcome. We first want to remind the Committee of the importance of this affordable housing tool that produces below market rate units in matter of right developments throughout the city with no cash subsidy from the District. Of unique importance, IZ creates below market rate units in neighborhoods where few or no affordable units are likely to be produced in the future. This is a valuable affordable housing tool practiced by hundreds of jurisdictions throughout the country, including Montgomery County. This approach is credited with achieving economic integration is ways that other affordable housing programs are unable to achieve.

Montgomery County’s experience is instructive for looking at D.C.’s pathway to successful implementation. The county has produced over 13,000 IZ units since 1976. Due to short affordability terms, currently only 2,600 units are still affordable at 65 percent area median income (AMI). In addition, another 1,573 IZ units that were purchased by the county’s housing authority are rented to lower income families (this is through a provision in the county’s law that D.C.’s prohibits). The county’s IZ program provides nearly half of its affordable housing production. Among the changes the county has made to its program over the years are: extending the affordability term to 30 years for ownership and 99 years for rental; allowing income targeting to rise from 65 percent AMI to 70 percent AMI for high rise construction, and elimination of a troubled buy-out provision that allowed fees in lieu of on-site construction of units.

Administration of D.C.’s IZ program requires urgent and specific attention to ensure that as the over 900 units come online in the next 5 years, implementation will be smooth for all parties. We now face three key administrative challenges that can be fixed: severe understaffing, FHA rules, and overly rigid administrative regulations. Below are our recommendations for these key challenges.

Administrative problems that must be resolved immediately

1. Severe understaffing –1-2 overworked staff members are struggling to launch a new IZ program and provide oversight for roughly 2,000 affordable dwelling units (ADUs) already built or in process, created by PUDs (in lieu of IZ) and public land dispositions. Staff will be difficult to retain and attract if capacity is way below a realistic workload. Program applicants and developers will also not get the assistance they require.

Recommendation: Budget more staff and contract to a qualified homeownership organization
experienced in permanent affordability:

a. Add 2 additional staff positions;
b. Contract with a nonprofit group experienced in managing the homeownership purchase process and stewarding permanently affordable homes. Given the extra challenges of affordable home purchasing in a post-2008 economy, more assistance to homebuyers is needed to speed up the sales process. A nonprofit experienced in selling and stewarding permanently affordable homes could manage the homebuyer recruitment, preparation, qualification, selection and placement process. This nonprofit can also provide effective relationships with mortgage lenders and developers to secure financing, along with ongoing stewardship, enforcement, and resale assistance. This kind of close working relationship with buyers and owners is likely going to be more effectively created through a nonprofit dedicated to successful affordable homeownership and permanent affordability than a government agency;
c. Sustain housing counseling assistance for IZ applicants.

2. FHA conflict with local covenants regarding foreclosure – The Zoning Commission has revised the regulations to conform with FHA rules, and DHCD is working to get FHA’s final approval. After FHA clarifies its acceptance of the D.C. program, DHCD needs to educate mortgage lenders and recruit them to offer mortgages for IZ units. Bank of America, for example, reviews and approves IZ programs for their mortgage lending. DHCD should ensure that D.C.’s IZ program gets onto Bank of America approved list, along other lenders’ lists.

3. Rigid regulations – The administrative regulations are currently being revised but it is urgent that we expedite these revisions given the many barriers they place to an efficient matching process for applicants and units. Given the difficulty matching qualified and interested applicants to units, we suggest suspending overly prescriptive lottery requirements until a lottery is needed to fairly allocate a unit among a larger pool of qualified applicants.

Policy issues for future consideration

Beyond the immediate administrative issues that should be our top priority, longer term policy issues should be considered to fine tune the program. The robust recovery of the housing market in D.C. over the last few years demonstrates that IZ is not a deterrent to housing production. For example, over 4,500 housing unit permits were issued in 2011. This is 64 percent greater than the last peak in the market in 2005 when over 2,750 permits for housing units were issued. D.C. housing production has gone from a few percent to more than half of the region’s residential output.

The experience to date on the development review and financing phase of IZ is that the economics work. Over 900 IZ units are in the pipeline at various stages of development approvals, and construction, with a handful of completed projects. This development pipeline demonstrates that financing for projects subject to IZ is not a problem. IZ policy standards have also contributed to creating approximately 1,000 affordable dwelling units (ADUs) through PUDs since the mid-2000s.

We flag the following policy issues for further assessment, as we act immediately to fix the administrative problems discussed above.

1. Income targeting: Current income targeting is at 80 and 50 percent AMI. Given that market conditions have changed since 2006, is income targeting still at the right levels? How many 50 percent AMI units can we expect to produce? How effective is the 80 percent AMI income targeting in providing units sufficiently below market?

2. Condo fees – while IZ standards have avoided the problems that early ADUs experienced before IZ policies were developed, unpredictable rises in condo fees could pose a problem in the future.


a. Require par value assessments for condo fees for IZ and ADUs: Rising condo fees over time are potentially a problem even though IZ incorporates an initial fee based on what is projected to be a realistic fee to ensure that the overall housing payment by the buyer does not exceed a certain percent of her or his income. To avoid future excessive increases in condo fees, we suggest requiring that at least for IZ units and ADUs, par value tied to the affordable price of the unit be the basis for assessing the condo fee rather than a square footage basis. This will allow condo fees to rise as inflation and costs rise without subjecting the owner to a rapid escalation that would make the condo fee too expensive for the affordable unit owner.
b. Initial fee setting: This is already addressed by IZ regulations but could affect a building as a whole if a developer sets fees too low to support ongoing building costs. Given this problem for all condo owners, we recommend strengthening consumer protection against lowballing condo fees. Enabling OP and DHCD to comprehensively collect data on condo fee rates from existing buildings would provide these agencies the information they need to appropriately set condo fee rates as a part of the purchase price of an IZ unit or ADU. Secondly, consumer protection for condo purchasers can be improved by changing how the verification of the initial condo fee is set. Currently a certified third party is paid by the developer to verify the fee. We suggest charging the developer a fee that would have been paid to the third party, and have the city contract with a third party directly to verify the condo fee.

Overall, IZ is a sound policy that requires focused attention to address the administrative hurdles to a smooth-running program. The program promises to provide a substantial new source of below market rate housing throughout the city. While the program faces challenges, it is worth the effort. We thank the D.C. Council for its long-standing support for this innovative affordable housing policy.

Thank you for the opportunity to testify.

Cheryl Cort

Policy Director

A few steps can fix Inclusionary Zoning

DC’s Inclusionary Zoning (IZ) affordable housing program has suffered from serious administrative problems in its start-up phase. As a policy, however, it is still sound, and is the right policy for DC’s future.

Photo from 2910 Georgia Ave.A handful of IZ units are on the market, along with over 900 units in the pipeline. There are also 1,000 units that came through the Zoning Commission’s Planned Unit Development (PUDs) process since 2000, using the same policy standards as IZ.

Unfortunately, 2 early IZ units sat on the market for more than a year, and the developer has sued the city to get out of the IZ requirement. This doesn’t reflect a fundamental flaw in IZ; rather, it arises from understaffing at the DC government and rigid local and federal regulations. There’s not much time to fix the sputtering implementation of this important affordable housing policy tool.

IZ brings many benefits

IZ sets aside 8-10% of new housing construction for households earning 50-80% of Area Median Income (a 50% AMI household of 3 earns $49,250 per year, a 80% AMI household earns $78,221 per year). IZ is worth fixing because we have plenty of evidence that this kind of program can produce results beyond what other housing programs can. IZ provides affordable housing in mixed-income and wealthier neighborhoods throughout a jurisdiction rather than concentrating it in a few neighborhoods.

This benefit of economic integration has been documented. Low-income children in programs like IZ perform better in school than their peers, because they live in low-poverty neighborhoods and attend local low-poverty schools. Another other advantage of IZ is that it does not require a direct subsidy from the government to construct the affordable unit, but rather lets the developer to build extra market-rate units, and uses that value to pay for the below-market ones.

Other than a nominal administrative cost, IZ is a very cost-effective way to sustain the city’s production of new moderately-priced homes. There are many successful similar programs throughout the country, including Montgomery County’s long-running IZ program, Moderately-Priced Dwelling Units (MPDUs).

DC IZ also has a sister program which creates affordable dwelling units through PUDs and public land deals. (Confusingly, these are often called ADUs, which is the same acronym, but not the same thing, as Accessory Dwelling Units, market-rate basement or garage units inside someone’s house). This program does not appear to have problems filling units at the same income levels. That success shows that IZ can also overcome its challenges with some concerted attention.

Three problems have stalled IZ

Three debilitating problems with the program’s administration can be fairly easily corrected and get it back on track: severe understaffing, rigid regulations, and rigid FHA lending rules.

Severe understaffing: Only 1-2 people administer the program inside DC’s Department of Housing and Community Development (DHCD). Without a few more staff people, IZ and the sister affordable dwelling units (ADUs) cannot be administered effectively. The Mayor and DC Council need to provide a few more staff positions to manage these programs.

An alternative to administering the program entirely inside the DC government would be to give responsibility for the for-sale units to a nonprofit experienced in managing permanently affordable homeownership programs. CityFirst Homes is already doing a similar job with the District’s first major housing land trust. Evidence suggests that more hands-on assistance from a non-profit like CityFirst Homes can drastically cut foreclosure rates and yield more successful homeowners.

The other component that requires sustained support is the housing counseling agencies who educate applicants and help them through the process. Ensuring the city’s budget provides for this is another key ingredient to success. In all, these administrative costs amount to a modest budget item and are a fraction of what it costs to subsidize new affordable housing construction.

Rigid IZ regulations: DHCD manages a process for connecting a person who qualifies for affordable housing to available units. This involves a centralized application and lotteries. Details of that process have proven too rigid to accommodate the realities of matching housing seekers and available units.

The city is in the process of revising the regulations to give the program necessary flexibility. This revision should be in effect in a few months.

An alternative to the current lottery system would be to let the developers market the units to qualified households, and simply have the District housing agency certify the applicants as qualified and provide general oversight. This is already the process for the PUD and public land “ADUs.”

With sufficient support from housing counseling agencies, residents in search of an affordable home should be able to get enough help to conduct that search, especially with the city’s useful website, dchousingsearch.org.

Rigid FHA lending rules: The Federal Housing Administration has emerged as the predominant mortgage backer in the post-2008 affordable homeownership world. Nationwide, most local housing programs have encountered a critical conflict with FHA rules where local programs (like IZ and ADUs) often require that the affordability provisions survive foreclosure. FHA does not allow for this.

The only way to deal with FHA mortgage lending standards that conflict with local program requirements is to change the program to conform to FHA’s standards, and get FHA to sign off on the changes. DC is acting to change its standards to comply with FHA. The timeline for receiving FHA’s approval is uncertain but the city hopes it will happen shortly, we hope in the next month or so.

If a unit goes into foreclosure and then sells on the market, the city would lose its investment in an affordable home. There are other safeguards the city could put in place that do not conflict with FHA. They would at least allow the city to recover the value of the affordability of the unit, should a foreclosure occur and the unit sell on the market.

With these three administrative fixes in place, DC should be ready to smoothly operate a program to place the right applicant in the right unit as 900 more IZ units come online.

Mend it, don’t end it

IZ’s growing pains have led to some calls to more fundamentally modify or scrap the IZ program. We should consider and debate these suggestions only once DC fixes the immediate problems and the program administration is running smoothly.

Some opponents continue to question the policy itself, but experience across the country points to IZ as a valuable and effective tool to create moderately-priced housing in strong markets with virtually no direct cost other than a small budget for staffing the program.

Photo courtesy of 2910 Georgia Ave.

Read the original article on Greater Greater Washington. >>

Testimony before the D.C. Zoning Commission: Support Case No. 04-33F Text Amendments: PUDs and Inclusionary Zoning – Termination of Affordability Controls upon Foreclosure

Please accept our testimony on behalf of the Coalition for Smarter Growth. My organization works to ensure that transportation and development decisions in the Washington D.C. region accommodate growth while revitalizing communities, providing more housing and travel choices, and conserving our natural and historic areas. I also note that we have been working to create and implement a successful Inclusionary Zoning program since its inception in 2003.

We are here to express our strong support for these amendments. We concur that the proposed text amendments are needed to ensure that IZ and ADU covenants conform to FHA guidelines. We appreciate that the city can take other steps through regulations to protect the public’s interest in its investment in below market rate homes without conflicting with FHA requirements. We look forward to the District developing these regulations to complement this action.

These amendments are critical to removing a major barrier affecting the IZ program. Administration of IZ has experienced a number of substantial challenges as units have come on line in the last year. While these challenges remain a major disappointment, they can be overcome. The first challenge is the severe understaffing of both the IZ program and the management of ADUs – affordable dwelling units generated through PUDs and public land dispositions. It appears that no more than one or at most two DHCD staff members manage every aspect of the ADU and IZ programs. Elected officials have touted the benefits of these affordable housing units, but they have not provided the modest funding needed to adequately support these assets. A few more staff members and continued support for adequate housing counseling services are needed to ensure that these programs have the resources they need to work with applicants and developers.

While ADUs are largely managed by individual developments with oversight from DHCD, IZ was designed to more closely manage the recruitment of applicants and the placement process. The intention was to provide greater assistance to residents in search of a home they could afford and allow them to come to one place to find assistance, rather than chase project after project. ADUs have not experienced the problems in leasing or sales of units at 80 percent AMI that IZ has. Considering these differences, and other factors, DHCD is in the midst of revising the IZ regulations. We hope this process will take no more than a couple of months. Apparently, the regulations were too rigid to respond to obvious needs in practice, such as ensuring that an applicant who enters a lottery for a for-sale unit is qualified to get a mortgage for that unit. There appear to be a variety of glitches in the IZ regulations that are inhibiting the smooth process of connecting the right applicant with the right unit. We are hopeful that this regulations revision will resolve these problems within the next several months.

You are here today to resolve one of the other barriers that we have recently encountered – the rise of FHA as the leading backer of affordable residential mortgages, and FHA standards that conflict with affordable housing covenants common among local government programs. These amendments will allow prospective buyers to secure FHA financing and purchase affordable units subject to the Inclusionary Zoning program and ADU requirements. We welcome these appropriate and necessary text amendments to the current PUD and Inclusionary Zoning regulations to improve the effectiveness of these programs and increase the availability of affordable housing in the District of Columbia.

Thank you for the opportunity to testify.

Cheryl Cort

Policy Director