Seriously. I manage a building in Cambridge and get notifications about zoning changes all the time. And definitely can't afford to live there any more.
The city council is currently considering an expansion of inclusionary zoning. The gist is that 20% of new apartments in buildings with six or more units will be reserved for people earning between 50-80% of median income. Put concretely, a school teacher with a stay at home spouse and two kids would be ineligible for one of these units.
Since there's no concomitant increase in density, we should see two things:
1. Overall construction should decrease relative to where it would have been. Projects that were previously viable are now underwater. Even worse, if the cap rate fluctuates entire classes of projects become nonviable.
2. Market rate housing will become more expensive at a faster rate. The market is clearing at levels that people at 50% median income can't afford, so setting aside units strictly reduces the market rate supply without any demand reduction.
>The gist is that 20% of new apartments in buildings with six or more units will be reserved for people earning between 50-80% of median income. Put concretely, a school teacher with a stay at home spouse and two kids would be ineligible for one of these units.
Are these developments really as "welfare cliff"-y as they seem? As in: if your income goes up, are you kicked out of the house?
Although, most of what I've read suggests that laws which increase cost (such as affordable housing requirements) have a tiny impact relative to laws which increase development time (such as the Telegraph Hill Dwellers calling for a stay of ~everything at council meetings); the latter are far more damaging. On your tool: if you move the affordability requirement from 10% to 25% and reduce the time to approval from 6 months to 4 months, you still build more housing!
> As in: if your income goes up, are you kicked out of the house?
I went to a City Council debate where this was a big issue. Theoretically, yes.
But the city doesn't actually want to kick people out of their houses.
But there was some concern that people had already pulled some shenanigans to make their finances temporarily suck so that they could get a house in Cambridge.
Friend of mine did something similar in San Francisco. Got a low-work part time job that paid in the affordable housing range for a year or two; he had accrued a large down payment; and he managed to win the BMR lottery. Bought a place in North Beach, tripled or quadrupled his income the following year.
That makes it sound a lot more cynical than it actually was--he originally chose the badly paying job for the lifestyle it allowed him--but it's definitely an abuse of a system that doesn't even function well when it's not being abused.
Permit delays introduce huge costs. While a developer is durdling around waiting for building approval they still need to finance the damn thing. At current interest rates every month in delay should work out to something like a 0.3% increase in costs. When we're talking about developments hovering on the border of profitability, this can make or break a project.
If you think about the current incentives for the DOBs that makes sense. Their KPI is essentially number of inspections, violations, plan re-views. How quickly the permits get done is usually not on the list.
It's not uncommon in NYC to go for more then a year through a permitting process for 1 to 3 family reno. That's one of the reason there was so much illegal construction happening here in the past.
It's super loosely enforced. I even knew someone in Cambridge who was -renting out- their affordable housing unit. So you had someone who qualified at some point for a $850,000 3 bedroom in a prime Cambridge location for just a few hundred bucks a month, who just moved out and rented it out for 2500 bucks a month. They never got caught.
Someone is always paying for that 20%. Hint: it's not the builder.
