SPECIAL SECTION
Jay Small
2018 Real Estate Legal Summit
Class Instructor:
“Inclusionary Zoning and
Aff ordable Housing”
Central Florida’s need for aff ordable
housing is more acute than ever.
While Central Florida enjoys a historically
lower unemployment rate
than the national average, its workforce includes
many low- and lower-income service
sector wage earners. Those wage earners
need housing. Aft er the Great Recession,
apartment-developers built market-rate
multifamily units, exacerbated the aff ordable
housing crisis. Demand for aff ordable
housing outstripped supply.
Although Florida raised the minimum
wage this year, market realities put homeownership
beyond the reach of the vast
majority of restaurant workers, teachers,
first responders, and service sector workers
who now must look to apartments for housing.
According to the March 2018 National
Low Income Housing Coalition’s annual
report, the Orlando-Kissimmee-Sanford
area ties for second worst in the country for
aff ordable housing availability, with only
17 available units per 100 renters. Only Las
Vegas’ aff ordable housing deficit is larger.
Traditional aff ordable housing solutions
include low-Income housing tax credits,
which subsidize aff ordable housing
developers, and housing choice vouchers
(or Section 8 vouchers), which subsidize
aff ordable housing rental payments.
Richard Rothstein’s recent study of the
modern American metropolis, The Color of
Law, points to a consequence of these and
other historical policies and practices like
redlining and federal subsidies to builders
conditioned on their not selling to African
Americans: neighborhood segregation
along income and racial lines. Aff ordable
housing projects are now geographically
isolated from market rate developments,
thereby contributing to a deeply ingrained
image of public housing as islands of dreary
high-density projects without well-kept
landscaping or playgrounds
and with drab, institutional
looking dwellings. Federal
funding for these traditional
tools also has failed to keep
pace with need.
But there is a rarely tried
tool besides low-income
housing tax credits and Section
8 vouchers. Florida law
There is a rarely tried
tool besides lowincome
credits and Section 8
vouchers: Florida law
that authorizes local
governments to adopt
inclusionary zoning to
solicit the involvement
authorizes local governments
to adopt inclusionary zoning
to solicit the involvement of
private sector developers in
building aff ordable housing.
Under inclusionary zoning
ordinances, as a condition
of multifamily development
approval, developers must
include in their market rate projects a
percentage of units comparable to market
rate units aff ordable for low-income renters.
Developers then build these aff ordable
housing units concurrently with the market
rate units.
Including aff ordable housing units in
market rate projects increases the aff ordable
housing supply and avoids concentrating
aff ordable housing in isolated
geographic areas. Alternatively, developers
may opt out of inclusionary zoning by
paying a fee equal to the cost of building an
aff ordable housing unit. Local governments
then deposit these “in lieu of” fees in an affordable
housing trust fund to alleviate the
aff ordable housing shortfall even further.
Inclusionary zoning can have a tremendous
impact on the Central Florida
multifamily housing market. It may be an
eff ective way to respond to the region’s
aff ordable housing shortage and produce
mixed income communities. Nevertheless,
inclusionary zoning may be met with resistance
by market rate apartment developers
because they are unfamiliar with how it can
contribute to a successful mixed use and
multifamily development.
Real estate market realities require that
inclusionary zoning ordinances be flexible
and off er meaningful market-driven economic
incentives to encourage developers
to supply a relatively
permanent stock of
aff ordable housing at a
profit. Incentives may
include density bonuses,
expedited site permitting,
waivers from open
space, set-back, or parking
requirements, on-
and off -site mitigation,
land donation, “in lieu
of” fees, or a combination
of all of these.
Safe, adequate
housing and inclusive
communities are unimpeachable
goals of the
American experience. All
Central Floridians bear a
housing tax
of private sector
developers in building
aff ordable housing.
collective responsibility to contemplate in a
deliberative way what needs to be done to
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