Zoning and Affordable Housing
Zoning has significant implications for affordable housing. Find out what to pay attention to, and how zoning laws may change over time.
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Zoning laws or ordinances designate land for particular uses, and this impacts all real estate asset types, from affordable housing to manufacturing plants.
One piece of land may be zoned for commercial retail use, for example, while another may be within a heavy manufacturing-zoned area. Each local authority typically has its own zoning code it follows, and it may be vastly different from the zoning laws in effect the next town over. To find out about a parcel’s zoning information, consult your municipality’s zoning commission (or similar office) which often offers zoning maps.
Zoning regulations are typically determined at the local or county government level. They are typically used to prevent land uses inappropriate for particular parts of a municipality. For example, most homeowners would likely oppose a developer constructing a massive, 1 million-square-foot distribution center next to their neighborhood. Similarly, a farmer may be against a 300-unit mid-rise apartment building going up alongside one of his or her fields.
How Zoning Affects Affordable Housing
Zoning can be of critical importance to the creation of affordable housing, whether it’s a ground-up greenfield development or the repurposing or conversion of another asset. Beside ensuring the parcel’s use type allows for a multifamily property, the zoning district’s allowances for density can be a make-or-break factor. Parcels with a higher allowance for housing density are ideal sites for larger developments with more units or homes.
With this in mind, there are often several different types of multifamily zoning classifications within a municipality. A row of parcels with a handful of townhomes may have more severe restrictions on density compared to, say, a high-rise multifamily complex. More compact developments are typically more attractive for developers, simply because they can do more with the land in terms of how many leasable units can be on-site.
In recent years, the shift toward more and more mixed-use zoning also stands to benefit the affordable housing sector. Mixed-use zones typically allow for significantly higher density for residential units alongside office, retail, and other uses.
Inclusionary Zoning
Inclusionary zoning typically is used to require that all multifamily developments in a certain area set aside a certain portion or number of units as affordable housing, based on renter income as a percentage of area median income This type of policy may be included as part of a formal zoning regulation, but more commonly it is enacted by policies that are not associated with a zoning code.
New York City has one of the most well-known inclusionary housing policies in the country. The regulation requires that developers dedicate a certain percentage of a project’s floor area toward affordable housing — and the developer is typically rewarded with higher allowances for housing density as a result.
Zoning Can Change
Like most regulations, zoning can change over time. As cities grow, it’s only natural that zoning in the outer reaches adjusts to the new reality. While one of the most visible signs of changing zoning is that of farmland being rezoned for industrial developments outside major cities, multifamily rezoning is not uncommon.
Generally, to rezone a parcel or wider area, a survey of the land must be conducted. Following this, changes would be proposed to the local government’s zoning authority, after which an application for a zoning adjustment would be filed. Should the zoning board or equivalent body review and approve your request, it would generally go before a planning commission meeting to allow for public input on the changes. After that, it would go to the local government’s decision-making body — typically a city council — for a vote.
Related Questions
What are the zoning requirements for affordable housing?
Zoning requirements for affordable housing vary depending on the municipality. Generally, the zoning district's allowances for density can be a make-or-break factor. Parcels with a higher allowance for housing density are ideal sites for larger developments with more units or homes. In recent years, the shift toward more and more mixed-use zoning also stands to benefit the affordable housing sector. Mixed-use zones typically allow for significantly higher density for residential units alongside office, retail, and other uses.
Inclusionary zoning typically is used to require that all multifamily developments in a certain area set aside a certain portion or number of units as affordable housing, based on renter income as a percentage of area median income. This type of policy may be included as part of a formal zoning regulation, but more commonly it is enacted by policies that are not associated with a zoning code.
New York City has one of the most well-known inclusionary housing policies in the country. The regulation requires that developers dedicate a certain percentage of a project’s floor area toward affordable housing — and the developer is typically rewarded with higher allowances for housing density as a result.
What are the benefits of affordable housing zoning?
Affordable housing zoning has many benefits, including increased job opportunities, reduced homelessness, improved job growth, reduced evictions, and increased consumer spending. Additionally, it can help to reduce multi-hour commutes for employees who would otherwise be unable to afford housing in the area. These benefits are not only good for the community, but also for investors, as affordable housing can be a good investment option.
For more information, see CommonBond's article on the economic benefits of affordable housing and The New York Times' article on San Francisco's commute.
What are the challenges of affordable housing zoning?
The main challenge of affordable housing zoning is that it can be difficult to get a parcel rezoned for multifamily use. This process typically involves a survey of the land, proposed changes to the local government’s zoning authority, an application for a zoning adjustment, a review by the zoning board or equivalent body, a planning commission meeting to allow for public input, and a vote by the local government’s decision-making body. Additionally, the zoning district’s allowances for density can be a make-or-break factor for developers, as parcels with a higher allowance for housing density are ideal sites for larger developments with more units or homes. Mixed-use zones typically allow for significantly higher density for residential units alongside office, retail, and other uses, which can be attractive for developers.
For more information, please see Zoning and Affordable Housing and Hotel Conversions: What You Need to Know.
How can zoning regulations help create affordable housing?
Zoning can be of critical importance to the creation of affordable housing, whether it’s a ground-up greenfield development or the repurposing or conversion of another asset. Beside ensuring the parcel’s use type allows for a multifamily property, the zoning district’s allowances for density can be a make-or-break factor. Parcels with a higher allowance for housing density are ideal sites for larger developments with more units or homes. Mixed-use zones typically allow for significantly higher density for residential units alongside office, retail, and other uses.
What are the different types of zoning for affordable housing?
The different types of zoning for affordable housing include:
- Row of parcels with a handful of townhomes, which typically have more severe restrictions on density compared to other types of multifamily zoning.
- High-rise multifamily complexes, which typically have higher allowances for housing density.
- Mixed-use zoning, which typically allow for significantly higher density for residential units alongside office, retail, and other uses.
- Inclusionary zoning, which typically requires that all multifamily developments in a certain area set aside a certain portion or number of units as affordable housing, based on renter income as a percentage of area median income.
How can local governments use zoning to promote affordable housing?
Local governments can use zoning to promote affordable housing by allowing for higher density in multifamily developments, as well as mixed-use zoning that allows for residential units alongside office, retail, and other uses. Additionally, local governments can rezone parcels or wider areas to allow for more affordable housing. To rezone a parcel or wider area, a survey of the land must be conducted, changes proposed to the local government’s zoning authority, and an application for a zoning adjustment filed. The zoning board or equivalent body would then review and approve the request, which would go before a planning commission meeting to allow for public input on the changes, and then to the local government’s decision-making body for a vote. Source