Impact of falling housing market
As the housing market has collapsed we have seen market rate home prices fall to a level that is not much higher than our moderate income affordable prices. This has made it very hard to sell inclusionary housing units with long term resale controls. Have any programs found ways to respond to this challenge?
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Replies to This Discussion
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Permalink Reply by Getabecha Mekonnen on -
I have added question than answer, and hope some one will respond. Developers that have restircted units are asking that the cap of 80% AMI be raised to 120% to increase the pool of candidates for second / third generation buyers. With all the price adjustments we have seen as noted in the earlier question , has anyone encounted similar issues?
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Permalink Reply by Rick Jacobus on -
This does not seem like an unreasonable request if it is true that the units are not selling to 80% buyers. San Francisco has given themselves the flexibility to do this. (See the notes from the webinar on this topic for a description of San Francisco's policy).
If the real problem is that the 'affordable' price is too close to the market price, then allowing higher income buyers may not make any difference. In that case, the solution might be to go the other way - to add some additional subsidy and target the homes to buyers earning 60% of median (for example). Obviously this only works if you have additional housing funds available but it might be worth considering in this market. If the price that was based on 80% of AMI is no longer below market, you need a lower price to reach buyers who are going to be willing to accept restrictions. -
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Permalink Reply by Maya Brennan on -
To add yet another question on the impact of the falling housing market on IZ, what are areas with IZ policies doing to ensure that the incentives or offsets are appropriate given the current market conditions? Is this becoming an issue, or has development slowed down so much that there aren't market-rate projects in the works that IZ would apply to?
Also, thanks, Rick, for posting notes from the webinar on IZ in a down market. Really helpful stuff for those of us who missed it! -
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Permalink Reply by Rebecca Cohen on -
This thread is now over a year old, but I thought it was worth revisiting to see if more practitioners have modified their inclusionary zoning programs to respond to the depressed housing market. If so, have changes been adopted on a temporary basis, or have communities found ways to generally improve their programs' responsiveness to fluctuations in the market on an ongoing basis?
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