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Should Inclusionary Zoning be Mandated in the Outer Boroughs?

Wednesday December 2004

Panelists: Shaun Donovan, Commissioner, HPD; Donald Capoccia, Principal, BFC Partners; Hon. David Yassky, City Councilman (D-Brooklyn); Paul Travis, Principal, Washington Square Partners
Moderator: Julia Vitullo-Martin, Director, Center for Rethinking Development

Inclusionary zoning allows developers in some of Manhattan’s most expensive, high-density neighborhoods to increase the size of prospective developments in exchange for voluntarily supplying a proportionate amount of affordable housing. In these neighborhoods, inclusionary zoning has produced some 600 affordable (and some 2,400 additional market-rate) housing units. The driving force behind the program’s success is that market demand in prime neighborhoods produces enough profit from additional market-rate apartments to subsidize rents for low- and moderateincome tenants.

Many housing advocates are now urging the Bloomberg administration to adopt mandatory inclusionary zoning in neighborhoods slated for rezoning and redevelopment. Under this proposal, developers putting up market-rate apartment buildings in these areas would be required to supply a proportionate amount of affordable housing.

But making the program mandatory will rob developers of the ability to judge whether market demand in the outer boroughs will be robust enough to subsidize affordable units. In that case, some builders may elect not to shoulder the additional financial risk—leading to fewer market-rate and subsidized units.