Secretary of Housing and Urban Development Juliàn Castro defended his department’s new “Affirmatively Furthering Fair Housing” program on Capitol Hill last week. Designed to integrate low-income families into higher-income neighborhoods, the proposed rules would funnel federal grant money to developers who build medium- and low-cost residences in wealthier neighborhoods.
The basic idea – if you build it, they will come – has been tried before, in the nation’s capital.
Since 2009, Washington, D.C. has incentivized builders to integrate financially homogenous neighborhoods through the Inclusionary Zoning Affordable Housing Program. It operates on a similar principle as the federal program, though with the subsidy coming in the form of “bonus density” (maximum number of lots allowed in a certain zone) rather than a federal grant. In the federal program, construction companies receive a check from the government for building cheaper, denser housing; in D.C., they’re allowed a special dispensation from zoning laws that helps them sell more lots. Both systems encourage low-cost, high-density building in government-designated zones.
So how well has the D.C. program done? According to the Washington City Paper, “Through 2013, the program created just 30 [inclusionary zoning] units, of which 28 were for moderate-income households and only two were for low-income households.” The Washington Post reported that, since the program’s inception, “the number of people who have used it to buy homes is only four, with three more deals under contract.” Even with 123,000 D.C. residents below the poverty line, the number of people who can afford a mortgage at the reduced price and who want to move into a socially and economically unfamiliar neighborhood is apparently vanishingly small.
According to the program’s 2013 Annual Report, the median income of households that rented Inclusionary Zoning units was $60,000. Federal guidelines set the poverty line for a family of five at less than half that – about $28,000.
Other data in the annual reports also don’t add up – literally. Although the Department of Housing and Community Development (DHCD) claims two Inclusionary Units built in 2011, 18 in 2012, and 15 in 2013 (totaling 35), the 2013 Annual Report claims, “The addition of units produced in 2013 brings the IZ program totals to thirty (30) units had been produced [sic].” Whereas just previous reports listed three of those units for low-income (as opposed to middle-income) households, the 2013 Report gives a lower number: “two (2) were a low-income unit [sic].” For the first two years of the program, no Inclusionary Units were built, and none was purchased or rented until 2013. Neither the Office of the Mayor nor DHCD would comment on how much D.C. has spent on the program.
Unlike D.C.’s program, which aims to mitigate economic divisions only, the proposed Obama administration rules seek to address “disparities by race, color, religion, sex, familial status, national origin, or disability in access to community assets” in addition to “housing choices continue to be constrained through housing discrimination, the operation of housing markets, investment choices by holders of capital, the history and geography of regions, and patterns of development and the built environment.”
THE WEEKLY STANDARD reported on a pilot program pursued by the Obama administration in Westchester, New York in 2013. Although HUD’s website portrays the new rules as furthering “the impact [the Fair Housing Act of 1968] intended,” unnamed federal officials told Wall Street Journal that “there has been a significant change in the Department of Housing and Urban Development.”
According to the Martin Prosperity Institute at the University of Toronto, Secretary Castro’s native San Antonio is the sixth most economically segregated city in the country. Obama’s native Chicago is fifteenth.
Benjamin Parker is an intern at The Weekly Standard.
