Inclusionary Zoning in Affordable Housing | Big Picture Broward | Big Picture Broward
Inclusionary Zoning in Affordable Housing requirements for Fort Lauderdale Development

The hidden backlash of Inclusionary Zoning in Affordable Housing

[Finding smart solutions to house our workforce in downtown Fort Lauderdale is priority #1]

The latest discussion surrounding downtown development has been Inclusionary Zoning in Affordable Housing.


Most jobs are located close to our city centers – specifically, downtown Fort Lauderdale. Our affordable housing options need to remain in proximity. But with ongoing development, guaranteeing that is becoming more uncertain.

Housing for our workforce that is close to the area, or at the very least has affordable transit access to and from the area, is hard to come by in Fort Lauderdale. Combine this with the cost of commuting back and forth from the western suburbs to the city center (sometimes from as far as two hours away), and the cost of living becomes even more expensive and stressful.

This is not only bad for the employee, it makes attracting and hiring qualified workers difficult for the employer.

As a city, we need to start thinking progressively. We need to raise the bar and set ourselves apart from other cities regionally and nationally. We should get serious and embrace a plan that makes Fort Lauderdale attractive to a talented workforce and also inspires our existing local talent to stay here.

Inclusionary Zoning in Affordable Housing

Inclusionary zoning in affordable housing will have long-term consequences for downtown Fort Lauderdale.

The Fort Lauderdale City Commission seemingly has it’s heart in the right place. Unfortunately, by considering inclusionary zoning in affordable housing as the “go-to” method for cultivating workforce housing units, they are falling into a rabbit hole that many cities who have tried it, now regret. Many who work in this sector of housing understand that inclusionary zoning, the method of requiring affordable units to be included as part of all varieties of new housing projects, is often a political position to appear empathetic towards the workforce housing. Many progressive cities have stopped using inclusionary zoning in affordable housing as a method to build workforce housing units because it just doesn’t work.

The inclusionary concept requires that all market-rate housing projects be built to include a percentage of housing units that could be afforded by people who earn 60% or less than the median income. In Broward County, 60% of the median income is $36,540. The affordable units would require deed restrictions to assure that rental rates or sales prices are affordable for the 60% of median income people in perpetuity. As an example, a luxury condo project on Las Olas Blvd with units ranging from $1 -5 million, would be required to have a percentage of its units in the $205,000 range.

Inclusionary Zoning in Affordable Housing

While it sounds like the city commission is leveling the social playing field, they are only making matters worse.

For the conventional rental builder, the deed restrictions would make bank financing for the other 85% of market rate units within the project almost impossible. It would also require the management to implement accounting methods and practices that are atypical to market rate property managers. For the sales product, a buyer would be unable to sell their unit at a profit above a fixed affordable price point and it would certainly hurt sales comps for the market rate units.

The end result would be that little or no additional affordable units would be built using this inclusionary method and the landowners would opt to build other real estate products such as hotel, office retail or industrial. Simple economics would tell you that as the population grows and traffic congestion increases, the demand to be close to work will heighten. With inclusionary zoning detracting builders, it will mean less supply with higher demand, which works counter-intuitively and causes an increase in housing costs.

The fact is, the business community is on board with finding a solution. Business groups like the Broward Workshop, (which includes real estate development professionals) have made affordable housing for our workforce, a priority.

Since the cost of land and construction are the same whether it is the market rate or a 100% affordable workforce housing project, then affordable housing projects must include subsidies to achieve affordable rental rates. It has been calculated by many local affordable housing professionals, that the gap is approximately $50,000 per unit. So for a 100 unit project, the gap would be $5,000,000. And if the goal is to build say 250 units a year in the city Fort Lauderdale, the total gap is $12,500,000 per year.

Inclusionary Zoning in Affordable Housing

To achieve this gap, the city should look to a menu of programs (some of which already exist).

1. Federal and state tax credit programs

2. reduction in park, school, impact fees and building permits

3. Local governmental agencies donating land towards these projects

4. governmental agencies building transit lines into the city center that incorporates workforce housing

5. The final ingredient. The one that makes the real difference. When there is a financial gap (and there will be), the city commission should have to walk the walk, and if the goal is to make our city center a desirable ecosystem for our future workforce, then make room in the city’s budget to fill the final gap on workforce housing projects.