Researcher says 'inclusionary zoning' bill won't reduce housing costs

Among the incentives for developers will be an "expedited" permitting process.   File photo

Will a so-called "inclusionary zoning" bill making its way through the South Carolina Senate help make housing more affordable in the Lowcountry?

The bill's sponsor says it will, but at least one researcher says otherwise.

The bill, SB 346, was introduced by state Sen. Marlon Kimpson (D-Charleston). It would empower cities and towns to force developers to set aside a certain percent of land for affordable housing. The bill is with the sub-committee of the judiciary committee, and Kimpson said he will be working over the summer to drum up support to move it to the floor of the legislature. He is also meeting with developers.

But "inclusionary zoning" -- marking out areas within municipalities where developers must set aside a certain percent of the build for affordable housing -- has its critics.

Professor Samuel Staley, a senior research fellow at Reason Foundation and managing director of the DeVoe L. Moore Center at Florida State University in Tallahassee, said such zoning adds "very few affordable units."

"My short answer is that inclusionary zoning is not enough," Staley told the Palmetto Business Daily. "Empirically, inclusionary zoning adds very few affordable units."

Staley argued that the problem "is not incentivizing the private sector to build low income housing; the problem is local government won't let them do it."

Developers will do so if allowed through other, more practical, measures, Staley said.

"I favor an approach that deregulates housing supply by relaxing density restrictions, streamlines the regulatory process, and recognizes diversity in the local housing market rather than trying to micromanage it through tactics such as inclusionary zoning," said Staley, an expert in urban planning.

"In addition, inclusionary zoning shifts the burden of financing new affordable units to higher and middle income home owners, putting even more upward pressure on housing prices and leading to housing markets even less affordable."

Kimpson, however, believes now is the time to act, or face a future where many people simply will not be able to afford to live, or work, in cities such as Charleston.

"I am a senator of a district that's probably one of the most significant in terms of an increase of home prices," Kimpson told the Palmetto Business Daily. "We are witnessing a rapid pace of increase in the price of homes in Charleston, much more than in other parts of the state."

"People who currently live here are going to be displaced because they cannot afford to either continue to rent or buy a home, which is a significant part of the American dream," he said. 

It is not a race issue, Kimpson argued, it is more a socioeconomic issue in Charleston when house prices average $400,000 and people have to earn $50 to $60 an hour to afford to live in the city.

"Who can afford that? What is happening is private LLCs , private equity companies, and a transient population from New York, D.C. and Florida are moving in because it is affordable for them," the senator said. "I am concerned about the average South Carolinian, that they still will be able to buy."

The state senator said he was moved to introduce the bill because the statutes are not clear on affordable housing and what counties and municipalities are allowed to do.

The bill will allow cities and counties to order developers to set aside a certain percentage of a build for affordable housing, or pay money in lieu that will be placed in a fund to help pay for cheaper accommodation.

"It can be 5 percent or 20 percent, whatever they decide, but it empowers local government to deal with this issue," Kimpson said.

Among the incentives for developers will be an "expedited" permitting process, the senator said. Ultimately, the bill is designed to head off a future where many people will not be able to live or work in Charleston  

Kimpson rejected the argument that mandating affordable housing -- or payment in lieu -- would lead to fewer homes being built.

"If you are going to stay out because you have to create a certain percentage of affordable housing units, then maybe we do not want you," Kimpson said. "The reality is that developers are going to work with the local council, and I have outlined expansive incentives, including with the permitting process."

The senator said "inclusionary zoning" is something of a misnomer in connection with his bill as it allows for affordable housing to be built anywhere, at the discretion of local authorities.

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