Understanding Inclusionary Zoning in Essex
Inclusionary zoning (IZ) in Essex incentivizes private developers to allocate a percentage of units in new housing projects below market rate, aimed at creating more affordable housing. The mandatory program applies to new developments above a certain size, with units required to be perpetually affordable and income targeting limits set. Developer incentives to offset costs and compliance strategies are important considerations in implementing IZ effectively.
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Presentation Transcript
What is inclusionary zoning? Inclusionary zoning (IZ) incentivizes private developers to sell or rent a certain percentage of the units in a new housing project below market rate. Demonstrated to be one of the most effective local policies to develop more affordable housing. IZ can be voluntary, but 80% of programs nationwide are mandatory for all projects above a certain threshold (often 10+ new homes). Burlington, South Burlington, and Hinesburg all have IZ mandatory in at least some part of the city/town. Winooski has considered IZ as well. Recommended in recent Essex Housing Needs Assessment and Town Plan.
Developer incentives to offset costs Source: Grounded Solutions Network national study of inclusionary zoning programs, 2018-2019
Can inclusionary zoning work in Essex? Town/city with mandatory IZ in at least part of municipality Building permits issued 2016-2020 677 Essex combined 744 units 555 476 449 431 313 53 Essex Town Essex Junction South Burlington Burlington Hinesburg Williston Winooski Source: U.S. Census Bureau building permit survey
Anticipated policy for Essex Mandatory for all new housing development projects above a certain size. Inclusionary units must be perpetually affordable. Applies to both new rental and new homes for sale. Ordinance applies throughout the Town and Village.
Anticipated income targeting Units for sale: 80-120% AMI Rental units: 50-100% AMI Example at 80% AMI: $252,500 maximum sale price for 2- bedroom house $76,700 income limit for household of 4 Example at 60% AMI: $1,295 maximum rent for 2-bedroom unit $57,500 income limit for household of 4
Inclusionary zoning features to be determined What is the number of units for a new project above which IZ will apply? What percentage of units must be inclusionary? Narrowing income targeting limits Should we allow developers to make a payment in lieu of complying with IZ? What incentives can we offer developers to offset the cost of IZ? How will we incorporate IZ into existing zoning and manage compliance?
