What is Inclusionary Zoning?

Under Inclusionary Zoning developers who are building new apartments, condominiums and homes are required to make some of the units affordable. Over 100 cities and counties in California have adopted Inclusionary Zoning programs tailored to their communities to help create mixed-income housing that is affordable to working families and low-income people.

What is the Reyes/Garcetti Proposal?

How many units and how affordable?

The Reyes/Garcetti proposal lets developers choose to build either 12% of rental units affordable to 50% Area Median Income or 10% of rental units affordable to 30% AMI (what do you mean by affordable?).

 
For example, on a 50-unit apartment building a developer would have two options:

 
1) provide six apartments that are affordable to individuals with incomes below $20,000/year (or a family of four with an income below $30,000/year), or

 
2) provide slightly fewer apartments (five rather than six) affordable to people lower incomes (individuals with incomes below $12,000/year, a family of four with an income below $18,000/year).

 
Developers building single family homes or condominiums could choose to build 20% of units affordable to 80% AMI or 40% of units affordable to 120% AMI. For example, on a 50-unit condominium project, a developer would make 10 units affordable to individuals with incomes below $33,000/year (or a family of four with an income below $47,000/year). Or the developer could make 20 units affordable to people with higher incomes ($46,000 for an individual, $66,000 for a family of four)

 
Five Ways to Meet IZ Requirement

 
Build affordable units on the same site as the market-rate (on-site)

 
Build units off-site. Developers would have the option to build the affordable units in a different location within the same Community Plan Area. However, they would have to build more units than if they chose the on-site option --11% or 13% for rental (depending on income levels), 22% or 44% for homeownership.

 
Dedicate land. Developers would have the option to dedicate land suitable for residential development. The value of the land would have to be at least equivalent to the value of on-site units.

 
Acquisition with or without rehab.  Developers would have the option to preserve at-risk housing or bring vacant units on line as affordable.

 
In-lieu fees. Developers would have the option of paying an in-lieu fee based on the economic equivalent constructing inclusionary units. The in-lieu fee calculation would be based on more units than if they chose the on-site option --11% or 13% for rental (depending on income levels), 22% or 44% for homeownership.

Helping Developers Cover the Cost of IZ Units

The City's already has an Affordable Housing Incentives Ordinance that gives breaks to developers who are building mixed-income or affordable developments. The Reyes/Garcetti proposal builds on these incentives

 
Density bonus. The City now allows a 25% density bonus for developments with some affordable units, 35% if located near transit. Developers choosing to build mixed-income on-site would be entitled to an addition 15% density bonus only if located near transit. This is in keeping with the City's General Plan Framework which seeks to direct housing construction to commercial boulevards and other areas well-served by transit.

 
Building Envelope. Height and Floor Area Ratio (FAR) would be relaxed to accommodate the density bonus. Developments in Height District IXL could have an additional 11 ft., while HD IVL could have an additional 22 ft.

 
Expedited Processing. Developers choosing the mixed-income on-site option would get priority in permit processing. The threshold for site plan review would be 100 units (currently 50 units).

 
Parking. Under the City's Affordable Housing Incentives Ordinance only one parking space is required for each affordable unit. Guest parking (1/4 space per unit) would not be required when building near transit. Compact and tandem spaces would be allowed.

 
Fee deferrals. Building permit and impact fees could be deferred until construction is completed. The City would still collect the same fees, but they would be delayed while the development is under construction.