DC’s inclusionary zoning program helps city residents rent and buy places to live when they can’t afford market-rate prices. Here’s how it works.
Inclusionary zoning stipulates that new residential developments have to have a certain number of apartments or condos, which are then deemed “affordable,” where the rent or the selling price is lower than the market rate and that are only available to people whose incomes fall below a certain level.
DC’s Zoning Commission designates inclusionary zones, and the city’s Department of Housing and Community Development manages the lottery process for households to move into affordable units.
Inclusionary zoning rules apply when a developer builds 10 or more units, or when the developer’s addition of 10 new units to an existing building represents an increase in the building’s residential floor space by 50% or more.
These units cost developers money because they are below market-rate, so to incentivize inclusionary zoning development, the city allows developers in inclusionary zones to build a 20% larger building than would normally be allowed for that particular zone. This additional development is called “bonus density.”
In the end, depending on the particular zoning and the bonus density, between 8 to 12.5% of the square footage of a building in an inclusionary zone will go toward affordable units.
Who can live in affordable units?
Under inclusionary zoning, there are two types of affordable units: those priced for households making at or less than 50% of the area median income (AMI), and those for people making at or less than 80% of AMI.
Once the units are built and ready for residents, the city runs a lottery among households that have registered with DC’s inclusionary zoning program.
To register for DC’s Inclusionary Zoning lottery, a household must submit documents to prove both its size and that its combined income is at or below the required AMI threshold. Charts like these clarifiy who, exactly, makes 50 or 80% of AMI:
Whether a household qualifies for housing that’s set aside for a certain AMI threshold varies based on the household’s size. A household of four making $80,000 per year, for example, could live in units designated for people making 80% of AMI, but an individual making the same amount could not.
The chart below outlines the maximum rents and purchase prices the can be charged for affordable units depending on the size of the unit.
There’s a lottery to get into inclusionary zoning housing
Once the lottery starts, households whose members live and work in DC get priority over those who don’t.
187 affordable units have come up for lottery since 2011, and 3,312 households have registered. 93 units have been added since the beginning of 2015, with over 1,500 new registrants. DC’s Department of Housing and Community Development says more units should hit the inclusionary zoning program as the city’s realty market continues to grow.
A similar lottery system applies to households buying a condo and the city has arranged lenders willing to provide financing.
Once renting an Inclusionary Zoning unit, households pay their building owner directly.
Renters must certify on an annual basis that their income has remained within the AMI threshold of their unit. AMI thresholds are updated every year based on research by the federal Department of Housing and Urban Development. Households that have purchased condos don’t need to re-certify.
Inclusionary zoning is different from Section 8
Inclusionary zoning housing is not Section 8 Housing. The main difference is that the government doesn’t pay portions of tenant rents for people in affordable units while under the Housing Choice Voucher Program, DC’s Section 8 equivalent, it does.
To qualify for the voucher program, households typically need to make less than 30% of AMI. Households under the voucher program can live in inclusionary zoning housing.
DC’s inclusionary zoning program is relatively new, starting in 2009. Interestingly, Montgomery County was the first administration in the nation to start an inclusionary zoning program, back in 1972. Other counties and cities in the DC region that run inclusionary zoning programs are Arlington and Fairfax Counties.
Currently, inclusionary zoning rules only apply to new apartments and condos. DC is finalizing an inclusionary zoning program for single-family homes.
The author would like to thank the DC Department of Housing and Community Development for its help in understanding inclusionary zoning.