Why Inclusive Zones are Not Inclusive Everywhere

Are inclusionary policies sufficient to create inclusive communities? New research by Constantine Kontokosta at New York University’s Center for Urban Science and Progress shows that as far as inclusionary zoning (IZ) is concerned, having a policy in place is not enough. The study, “Mixed Income Housing and Neighborhood Integration: Evidence from Inclusionary Zoning Programs,” investigates changes in income and racial diversity in Montgomery County, Maryland and New York’s Suffolk County—both of which have IZ policies in place. However, while traditional metrics suggest that income-integration increased in both counties, Kontokosta shows that only one of the two counties has succeeded in creating genuinely more diverse communities through zoning.

Inclusionary zoning is one of several affordable housing policies in place in the United States today. According to estimates by the Innovative Housing Institute, over 400 communities across the country have some form of inclusionary zoning policy in place. Usually enacted through ordinances at the city or county level, IZ entails designating some parts of the city as inclusionary zones, where a portion of new housing construction must be rented out at below-market rents to low- or moderate-income families—a form of mixed-income housing. Unlike conventional low-cost housing measures, IZ actively creates a setting that encourages integration of income groups.

Kontokosta evaluates the success of IZ in creating mixed-income communities by comparing Suffolk and Montgomery counties over a period of 20 years (1980-2000). Key demographic similarities, such as population density, proportion of black and Hispanic population, and home ownership rates make these counties a good case for comparison. Moreover, the change in housing stock over the study period was nearly equal.

The key difference between the counties was the design of the zoning policy. In Suffolk, neighborhoods with higher black and Hispanic concentration and those with higher levels of poverty were more likely to be designated for inclusionary zoning. Furthermore, the county allowed households earning between 80 to 120 percent of the area median income (AMI) to apply for low-cost housing, which limited income diversity in the IZ neighborhoods. This was not the case in Montgomery where eligibility was restricted to lower-income families and inclusionary zones were not concentrated by race or income levels.

Kontokosta evaluates the effectiveness of the policy over the 20-year period in several different ways. In both counties, the results show that neighborhoods with IZ policies had higher levels of income integration as well as a larger proportion of middle-class population compared to neighborhoods that did not enforce inclusionary zoning. However, the usefulness of this finding is limited because Suffolk’s IZ policy only targeted households within a middle-income range.

Racial dynamics are more complex. In Montgomery, where IZ allocation was racially unbiased, IZ neighborhoods became more integrated over time, although there was some displacement of the white population. However, diversity gains were much smaller and white flight greater in Suffolk, where IZ neighborhoods had over twice the average county share of black and Hispanic population from the outset. With respect to spillover effects in surrounding tracts, there was a strong relationship between the white population lost in IZ tracts and gained in neighboring areas.

The paper’s third important finding relates to a disproportionate allocation of IZ units by race. Specifically, the white population is under-represented by 29 percent, whereas Asians are over-represented. This may be suggestive of preferences or social networks of different races, suggests Kontokosta, and this misallocation may undermine IZ’s effectiveness in promoting diversity.

The contribution of this paper must be appreciated in the context of a growing awareness of how affordable housing policies interact with society. Limited supply of land means that housing in cities is disproportionately allocated to higher income groups. According to the US Department of Housing and Urban Development, a minimum wage worker employed full-time cannot afford a two-bedroom apartment anywhere in the country.

On the other hand, the old model of public housing has now officially been rejected because it led to the marginalization of racial minorities and concentration of poverty, which in turn led to systematic exclusion from economic opportunities and society in general.  At the turn of the twenty-first century, as the last of the projects was being torn down in America, other countries around the world, including France, South Korea, Australia, and Britain, had also begun to acknowledge that the traditional model of public-supplied housing needs to be overhauled. There is an ongoing effort across the globe to come up with innovative solutions to provide housing that is both affordable and integrated.

Kontokosta’s study gives hope that inclusionary zoning might be a step in the right direction. However, if racial diversity is the objective, white and non-white segregation may continue to persist. Nevertheless, if designed and executed effectively, mixed-income housing may at least be partly successful in creating mixed communities.

Article Source: Mixed Income Housing and Neighborhood Integration: Evidence from Inclusionary Zoning Programs, Constantine E. Kontokosta, Journal of Urban Affairs, Volume 36(4), pages 716-741, 2014.

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