INCLUSIONARY ZONING or INCLUSIONARY HOUSING by DGF19Lfg

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									           INCLUSIONARY HOUSING,
LAND VALUE RECAPTURE AND SOCIAL INTEGRATION :
           A Comparative Perspective



Nico Calavita - San Diego State University
Alan Mallach – Center for Community Progress,
               Washington, DC

          2010 National Inclusionary Housing Conference
              Washington DC – November 4 2010
       IH statutes have spread worldwide

                                                       ● New Zealand
                                                       ● The Netherlands
                                           ● Spain
                                           ● South Australia
                                           ● Italy
                                ● France
                  ● Catalonia
       ● Ireland
       ● France
       ● New South Wales

● UK


1990     2000       2002         2006      2007           2008
       Organization of presentation

 Why expansion to other countries (Calavita)
 IH as a land value recapture mechanism (Calavita)
 IH, social inclusion and housing production (Mallach)
 Conclusions (Mallach)
 Discussion
                  IH in Europe & Canada
         A trend initiated only about fifteen/twenty years ago


                 Counterintuitive
We would expect more government
           intervention in Europe

                         So, Why?
Enter privatism and the retrenchment of the
                public sector
       Deregulation


       Reduction in public expenditures


       Market-based solutions


       Devolution


       Cutbacks in social housing programs
  But the move to neo-liberalism has varied

 Its effects must be understood contextually, as the result of
  neo-liberal programs interacting with social traditions and
  institutional landscapes in each country

 And that is especially true of IH
   IH as a land value recapture mechanism


 In Europe, IH is generally viewed as a mechanism for the
  recapture of “unearned increments” in land value

 The way this mechanism is utilized reflects the planning
  culture and the constitution/property rights regime in each
  country
                 Four models

 Explicit recapture (England and Spain)


 Explicit but limited (Ireland)


 Implicit or ambiguous (Italy, France and Canada)


 Not part of the planning culture (US)
Basis for IH in England

 Nationalization of development rights under Town and
  County Planning Act (1947).
   “Betterment” – increase in land value resulting from public
    action belongs to the public

 Section 106 of the 1990 Town and Country Planning Act
   Developer can be required to provide affordable housing under
    agreement with local authority
“Different councils adopt differing policies as to what percentage of
  social housing may be required, the level of development which
  triggers such provision and the method of calculating financial
  contributions. As inevitably, it fall to the landowner to fund these
  provisions, by reduction of the sale price, there is often lengthy and
  sometimes acrimonious discussion as to the need for and the
  amount of the provision.” (page 3)
Basis for IH in Spain
 Art. 47 of the Spanish Constitution:“…The community shall share in
  the increased values generated by the urban activities of public bodies.”

 Recapture of land values, then (plusvalias in Spanish), is mandated by the
  Spanish constitution

 Couple that with another constitutional mandate:
    ”All Spaniards have the right to enjoy decent and adequate housing. The
     public authorities shall promote the conditions necessary and establish the
     pertinent norms to make this right effective, regulating the use of land in
     accordance with the general interest to prevent speculation,”

 And practically you have a constitutional mandate for IH as a land value
  recapture mechanism.
Basis for IH in Spain (cont.)

            Autonomous regions adopt IH

         The Basque region (1994)
         Madrid (1997)
         Castille y Leon (1999)
         Catalunia (2002/2004)
Basis for IH in Spain (cont.)


       National Law 8, 2007 (Ley del Suelo)
         Allocates a minimum of 30% of the square meters designated for
          residential development in the urban development plans to a land
          reserve dedicated to a VPO housing regime; i.e., non-market
          housing.
Basis for IH in Ireland


 Housing crisis of huge proportions (mid 1990s/early 2000s)


 Political response: Part V of the Planning and Development Act, 2000
   It allowed that a specified percentage (not more than 20%) of land
    zoned for residential and other uses, be transferred at existing use value
    to the local authority for social and affordable housing production.
Basis for IH in Ireland (cont.)

 It was immediately referred by the President of Ireland to the
  Supreme Court under the provisions of Article 26 of the
  Constitution of Ireland (1937).
 Is it a taking? No!


 The Court accepted the concept of “betterment”:
     • “…The owner may be required to cede some part of the enhanced
         value of the land deriving both from its zoning…and the grant of
         planning permission…”
Basis for IH in Ireland (cont.)

   In an opinion reminiscent of the US “balancing test” the court
    stated that the legislation impaired property rights “as little as
    possible and the effects on those rights are proportionate to
    the objectives to be obtained.”

                       Lessons for the US?
Basis for IH in the U.S.

  In the US, where the “right to develop” is far more central to the
   concept of property rights than is the case in most European
   countries, IH is often justified by compensating developers for
   the additional costs of providing IH

  Public costs
    Is there a better way?
Are
incentives
necessary?
Incentives and cost-offsets displace costs
onto the public, either directly or indirectly


         Financial incentives
         Fee waivers, reductions or deferrals
         Fast-tract permit approvals
         Density bonuses
                    Density bonuses

When superimposed on existing planning framework, they
   raise three major areas of concern:
1) They undermine the planning process and existing
   regulations
2) They may lower the level of service of public facilities and
   infrastructure
3) They frustrate citizen participation in the planning process
 Alternative: IH as a land value recapture mechanism
  through rezonings or land use changes, taking into
  account that planning is a dynamic process

 Now IH is superimposed on an existing framework
   Cost-offsets and incentives implicitly assume a static view of
    urban planning
IH land value recapture in the US: A beginning
               Colorado

								
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