Former City Councilmember here: Azeem is completely right that politics often require some inclusionary policy to gain an upzone, regardless of how correct the economists are.
The next-best solution in lieu of a clean upzone is one that is carefully designs IZ to limit the damage.
California has a statewide optional IZ program called Bonus Law. It provides benefits including more capacity, to offset the cost of affordable units. It's voluntary so it's only used when it's a win-win for the homebuilder and the city.
In 2024 it was used 10X more than all other streamlining bills combined, on nearly 50% of all multifamily approvals. It's the flagship production policy in CA.
The policy is carefully crafted to ensure that the benefits out-weigh the costs of the IZ units. I call that calculation a Poppy Bagel policy. Yes there are costly set-asides, but not so many as to overwhelm the value of the policy.
Glad you mentioned the density bonus! I talked a bit about it with Professor Elemendorf, who pointed out that if anything, the results in Kouchekinea’s paper understate the negative effects of IZ on home building because the density bonus law has been strengthened continuously since 2020, which would attenuate the effects of IZ. (This didn’t make it into the piece because it’s a bit of a wonky aside.)
We have some new data coming out that suggests that most use of Bonus Law is not on projects that are subject to IZ. That was a surprise, actually. Still, for a sizeable minority of projects, Bonus Law seems to offset the drag on unit production from IZ.
I enjoyed Milan Singh's article a great deal, and I found Mr. deBoer's response appearing below as boorish and boring as one might expect. But I would like to see Mr. Singh stop saying that studies like the one discussed "find" things. Mr. Kouchekinia didn't "find" that "for every percentage point increase in the stringency of an inclusionary zoning ordinance, the flow of new housing supply decreases by 7.6%” as one might "find" a rock lying on the ground. He collected data, made assumptions, and then developed estimates based on the data and the assumptions. I have a bias in favor of "unrestricted" development and also acknowledge that we have to accept that the best is the enemy of the good, and the practical, and making any progress in relieving the housing shortage involves catering to both "owner greed" and "developer/landlord" hatred, even though that dangerously limits what can be done. So I find the paper's arguments/conclusions quite believable and hopefully even capable of providing a certain measure of enlightenment to intellects less blinkered then Freddie's. But arguments aren't "findings".
That’s interesting! I hear “find” in this context as meaning that the person made a calculation that implies this, but *not* as a factive verb implying that the result is actually correct.
Meh. "The study found that X" seems elliptical for "The study found evidence that X." Sure, the evidence is only as strong as the researcher's methods are sound, but who reads papers like Mr. Kouchekinia's (or articles about such papers) without knowing that? IDK.
It’s been a total disaster here. The developers all chose to rentmaxx but the median income threshold limits are too low for anyone who can pay the rental rate. Like 1900 apartments are sitting empty if I recall correctly
Depending on how we define the poor, this isn't proven, so I'm glad that isn't the title. I'm sure that the price of housing in a non-inclusionary, upzoning scenario is still more expensive than 80% or whatever of the median income in many of these cities. Inclusionary voting DOES help people, even if inefficiently.
I’m skeptical that the Cambridge or New Haven reforms did much of anything. Sure, you get a few non-profit or public developments. But, like, we have to be honest with ourselves. You’re asking politicians to push thru contentious zoning reforms for very little benefit. And then these purported reforms wind up discrediting the idea that land use reform would be helpful because they don’t work to bring down prices. I’m just concerned that, for the amount of housing that gets built under reforms that include affordability mandates, it’s not worth (1) the costs in the discourse, that is, the common knowledge about whether reforms generally would work, (2) the energy from activists , advocates and allied politicians (who could be more fruitfully busy with things like public safety, to improve the reputation of cities, thereby making urbanization more popular) or (3) the costs in YIMBY-washing, where fundamentally anti housing politicians and municipalities get to say, look at us, aren’t we great, well we tried and it didn’t work, so sad.
I’ve worked in the multi family construction industry for fifteen years and in that time our prices have doubled due to how much materials and building department fees have increased. Then you add on the timeline for getting a project off the ground taking years of design professional fees. It makes sense why developers aren’t very interested in tax breaks later and rent caps. People aren’t going to like this but the only two things I can see helping that the government can do is permit reform and subsidies. Zoning is a boondoggle
The failures of neoliberalism really burn through the page here - there is nothing in this piece. Resembling an explanation of how truly poor people, people in the 10th or 15th or 20th percentile of income, are going to find places to live. Even the most wildly optimistic yimby doesn't believe that reforms are going to make housing actually dirt cheap, just cheaper, and those people can't afford housing even under the best case projections for the reforms you want. So what do you have to offer them? In this piece, literally nothing.
This is explicitly addressed in the article, which advocates for direct rental subsidies for the poor instead of inclusionary zoning.
“Then, the government would use some of the increased property tax revenues to pay for rental subsidies for low-income families — perhaps with larger subsidies allotted if a qualifying family chose to live in a high-opportunity (and commensurately higher-cost) neighborhood.”
Freddie has a point. With the progressive factions taking over Democratic politics, there’s not much constituency for market urbanism, for housing ideas that don’t simply mandate affordability. If we accept that development, and we still want reform, it might be better to roll over on issues like public subsidies for things housing and healthcare and grocery stores (lmao, vomit), like whatever the opposite of fiscal austerity is. The strength of market development, that is, the thing that people would like about it, even leftists, is that is not only “free,” from the perspective of the public fisc, but it actually causes tax receipts to increase net infrastructure. So, I think the idea would be to bandwagon with the left until they run out of fiscal space and then present market urbanism as least bad option to address the fiscal crisis.
I am the rare The Argument/FdB dual subscriber, and I think you've made good points about YIMBYism in the past. Specifically by pointing out the tendency among YIMBYs to caricature all of their opponents as wealthy homeowners when the reality is often far more complicated.
That said, I think you whiffed on this one. It was one of the *main points* of Milan's piece that the poor would be better served by increased revenue for vouchers. You can agree or disagree--there are some empirical questions there I'm not equipped to answer while perusing the comments on my lunch break--but to say the article ignores the housing needs of the poor reflects a bad misunderstanding of the argument he's making.
Responses like this really make it seem like you have trouble following the logical flow of an economics discussion that doesn't default to 19th-century Marxist boilerplate, as opposed to actual economic findings of the past 150 years.
In Cambridge, there’s a dedicated entity (Cambridge Housing Authority) for the group of folks you’re talking about funded in part with local taxes (a larger tax base helps CHA provide more housing).
The truth is, chronically poor people should not be living alone in a place like SF. They need to go live in places like Columbus, Ohio, or Des Moines, Iowa, where their rental subsidies or universal housing vouchers can go further. If they want to live in a tier 1 city they need to live with family, or we need to re-legalize micro apartments and SRO's for them
I had a friend whose family immigrated from another Mexico.
His family and three others all bought a house together
They all lived in that house.And then bought another one and rented that one out and kept doing so until all four houses were paid off.Then, they finally each got their own home
People will do what they have to, to get ahead.
I had another family who's home.I visited, there was probably fifteen or twenty people living in the house bunk beds in all the rooms.
Me personally, my wife and I moved back in with my parents For over two years to save up to buy a home
Cambridge denizen here. Just popping in to say that this is one of the best distillations of IZ policies' drag on affordable housing that I have ever read.
Also - shoutout Burhan! I just met him on my block while he was campaigning for state senate!
Just do rent subsidies for the poor, infinitely better than either rent control or inclusionary zoning, which is just a poor man's public housing scheme since we don't know how to build anymore
Former City Councilmember here: Azeem is completely right that politics often require some inclusionary policy to gain an upzone, regardless of how correct the economists are.
The next-best solution in lieu of a clean upzone is one that is carefully designs IZ to limit the damage.
California has a statewide optional IZ program called Bonus Law. It provides benefits including more capacity, to offset the cost of affordable units. It's voluntary so it's only used when it's a win-win for the homebuilder and the city.
In 2024 it was used 10X more than all other streamlining bills combined, on nearly 50% of all multifamily approvals. It's the flagship production policy in CA.
The policy is carefully crafted to ensure that the benefits out-weigh the costs of the IZ units. I call that calculation a Poppy Bagel policy. Yes there are costly set-asides, but not so many as to overwhelm the value of the policy.
Circulate Planning & Policy published a report on the subject here: https://www.circulatesd.org/win_win_bonus_mobile#_ednref32
Glad you mentioned the density bonus! I talked a bit about it with Professor Elemendorf, who pointed out that if anything, the results in Kouchekinea’s paper understate the negative effects of IZ on home building because the density bonus law has been strengthened continuously since 2020, which would attenuate the effects of IZ. (This didn’t make it into the piece because it’s a bit of a wonky aside.)
We have some new data coming out that suggests that most use of Bonus Law is not on projects that are subject to IZ. That was a surprise, actually. Still, for a sizeable minority of projects, Bonus Law seems to offset the drag on unit production from IZ.
I enjoyed Milan Singh's article a great deal, and I found Mr. deBoer's response appearing below as boorish and boring as one might expect. But I would like to see Mr. Singh stop saying that studies like the one discussed "find" things. Mr. Kouchekinia didn't "find" that "for every percentage point increase in the stringency of an inclusionary zoning ordinance, the flow of new housing supply decreases by 7.6%” as one might "find" a rock lying on the ground. He collected data, made assumptions, and then developed estimates based on the data and the assumptions. I have a bias in favor of "unrestricted" development and also acknowledge that we have to accept that the best is the enemy of the good, and the practical, and making any progress in relieving the housing shortage involves catering to both "owner greed" and "developer/landlord" hatred, even though that dangerously limits what can be done. So I find the paper's arguments/conclusions quite believable and hopefully even capable of providing a certain measure of enlightenment to intellects less blinkered then Freddie's. But arguments aren't "findings".
Fair point, I’ll try to use “estimates” in the future.
That’s interesting! I hear “find” in this context as meaning that the person made a calculation that implies this, but *not* as a factive verb implying that the result is actually correct.
Meh. "The study found that X" seems elliptical for "The study found evidence that X." Sure, the evidence is only as strong as the researcher's methods are sound, but who reads papers like Mr. Kouchekinia's (or articles about such papers) without knowing that? IDK.
This is a pretty standard way People talk
> Everyone hates luxury development.
I don't!
I liked the rest of the post much more.
"Oh no my neighborhood is improving, how awful!" Gentrification is awesome, and I'm tired of pretending like it's not
It’s been a total disaster here. The developers all chose to rentmaxx but the median income threshold limits are too low for anyone who can pay the rental rate. Like 1900 apartments are sitting empty if I recall correctly
Excellent article, thank you. Can you change the headline to “Inclusionary zoning hurts the poor” or similar?
I’d like YIMBYs to consider street votes: https://www.sambowman.co/p/democracy-is-the-solution-to-vetocracy
Depending on how we define the poor, this isn't proven, so I'm glad that isn't the title. I'm sure that the price of housing in a non-inclusionary, upzoning scenario is still more expensive than 80% or whatever of the median income in many of these cities. Inclusionary voting DOES help people, even if inefficiently.
I’m skeptical that the Cambridge or New Haven reforms did much of anything. Sure, you get a few non-profit or public developments. But, like, we have to be honest with ourselves. You’re asking politicians to push thru contentious zoning reforms for very little benefit. And then these purported reforms wind up discrediting the idea that land use reform would be helpful because they don’t work to bring down prices. I’m just concerned that, for the amount of housing that gets built under reforms that include affordability mandates, it’s not worth (1) the costs in the discourse, that is, the common knowledge about whether reforms generally would work, (2) the energy from activists , advocates and allied politicians (who could be more fruitfully busy with things like public safety, to improve the reputation of cities, thereby making urbanization more popular) or (3) the costs in YIMBY-washing, where fundamentally anti housing politicians and municipalities get to say, look at us, aren’t we great, well we tried and it didn’t work, so sad.
I’ve worked in the multi family construction industry for fifteen years and in that time our prices have doubled due to how much materials and building department fees have increased. Then you add on the timeline for getting a project off the ground taking years of design professional fees. It makes sense why developers aren’t very interested in tax breaks later and rent caps. People aren’t going to like this but the only two things I can see helping that the government can do is permit reform and subsidies. Zoning is a boondoggle
"
You’re asking politicians to push thru contentious zoning reforms for very little benefit
"
The benefit is all the new houses that get built. And all the people that now have a place to live
The failures of neoliberalism really burn through the page here - there is nothing in this piece. Resembling an explanation of how truly poor people, people in the 10th or 15th or 20th percentile of income, are going to find places to live. Even the most wildly optimistic yimby doesn't believe that reforms are going to make housing actually dirt cheap, just cheaper, and those people can't afford housing even under the best case projections for the reforms you want. So what do you have to offer them? In this piece, literally nothing.
This is explicitly addressed in the article, which advocates for direct rental subsidies for the poor instead of inclusionary zoning.
“Then, the government would use some of the increased property tax revenues to pay for rental subsidies for low-income families — perhaps with larger subsidies allotted if a qualifying family chose to live in a high-opportunity (and commensurately higher-cost) neighborhood.”
“Make implicit costs and benefits explicit” is always right economically and usually a disaster politically.
Exactly. I feel like the subsidy wouldn't last very long and would absolutely never get enacted, making it doa.
Freddie has a point. With the progressive factions taking over Democratic politics, there’s not much constituency for market urbanism, for housing ideas that don’t simply mandate affordability. If we accept that development, and we still want reform, it might be better to roll over on issues like public subsidies for things housing and healthcare and grocery stores (lmao, vomit), like whatever the opposite of fiscal austerity is. The strength of market development, that is, the thing that people would like about it, even leftists, is that is not only “free,” from the perspective of the public fisc, but it actually causes tax receipts to increase net infrastructure. So, I think the idea would be to bandwagon with the left until they run out of fiscal space and then present market urbanism as least bad option to address the fiscal crisis.
That presumes the right doesn't get swept into power on the backs of said fiscal crisis...
I dunno bro, this sounds like accelerationism for moderates lmao
I am the rare The Argument/FdB dual subscriber, and I think you've made good points about YIMBYism in the past. Specifically by pointing out the tendency among YIMBYs to caricature all of their opponents as wealthy homeowners when the reality is often far more complicated.
That said, I think you whiffed on this one. It was one of the *main points* of Milan's piece that the poor would be better served by increased revenue for vouchers. You can agree or disagree--there are some empirical questions there I'm not equipped to answer while perusing the comments on my lunch break--but to say the article ignores the housing needs of the poor reflects a bad misunderstanding of the argument he's making.
“Rude, but illiterate.”
Responses like this really make it seem like you have trouble following the logical flow of an economics discussion that doesn't default to 19th-century Marxist boilerplate, as opposed to actual economic findings of the past 150 years.
Because if they understood actual economic findings they wouldn't be marxists
Why wouldn’t old housing become dirt cheap if new housing becomes cheaper?
That is a second- or third-order effect.
Freddie wants socialized housing as a first-order effect.
Tokyo exists, my guy.
In Cambridge, there’s a dedicated entity (Cambridge Housing Authority) for the group of folks you’re talking about funded in part with local taxes (a larger tax base helps CHA provide more housing).
The truth is, chronically poor people should not be living alone in a place like SF. They need to go live in places like Columbus, Ohio, or Des Moines, Iowa, where their rental subsidies or universal housing vouchers can go further. If they want to live in a tier 1 city they need to live with family, or we need to re-legalize micro apartments and SRO's for them
They will live with other people
I had a friend whose family immigrated from another Mexico.
His family and three others all bought a house together
They all lived in that house.And then bought another one and rented that one out and kept doing so until all four houses were paid off.Then, they finally each got their own home
People will do what they have to, to get ahead.
I had another family who's home.I visited, there was probably fifteen or twenty people living in the house bunk beds in all the rooms.
Me personally, my wife and I moved back in with my parents For over two years to save up to buy a home
Cambridge denizen here. Just popping in to say that this is one of the best distillations of IZ policies' drag on affordable housing that I have ever read.
Also - shoutout Burhan! I just met him on my block while he was campaigning for state senate!
Ayy a fellow yalie
Just do rent subsidies for the poor, infinitely better than either rent control or inclusionary zoning, which is just a poor man's public housing scheme since we don't know how to build anymore