IZ Update

Inclusionary Zoning Report
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BIA Position on Inclusionary Zoning

The BIA supports efforts by the City of Philadelphia and the development community to promote the creation of additional workforce and affordable housing. It is our mission to build housing for households at all levels of the market spectrum, including middle and lower-income households.

We nevertheless have fundamental concerns about the City's recently-enacted IZ legislation, primarily because it (thus far at least) demands that developers bear the entire cost of inclusionary zoning. For builders and developers in Philadelphia, who already are faced with building costs that are nearly double those in the suburbs, the new law amounts to little more than an unfunded government mandate that will create yet another disincentive to build competitively priced housing in Philadelphia.

Therefore, while the BIA supports the goals of inclusionary zoning, we strongly recommend enactment of companion legislation that achieves cost neutrality through the implementation of a series of jointly-negotiated incentives that incorporate the following principles:

• Negotiating IZ legislation that has monetary and investment incentives which will not limit private capital investment into the city or place an unnecessary burden on private development.
  
  
• Furthering the discussion on how an inclusionary housing program would be administered and operated in such a way as to not delay or add to the cost of producing housing.
  
  
• Analyzing additional/alternative sources of revenue which may provide dedicated revenue to the Housing Trust Fund to further meet the needs of the middle and lower-income housing markets, i.e. making everyone pay their fair share, not just putting the burden on private developers.
  
  
• Providing economic information illustrating why on-site units are not feasible in the market and putting the emphasis on negotiating reasonable in-lieu fees.
  
  
• Identifying and negotiating other issues important to the BIA as part of the negotiation on this legislation i.e. labor costs, state building code, approval processes.

The BIA is committed to working diligently with members of City Council and other government agencies and stakeholders to ensure that not only does the private market continue to provide a boost to the city's revenue coffers, but provides the sort of creativity and resources necessary to meet the needs of all segments of the housing market spectrum.

Report: Housing mandate would cripple construction
Philadelphia Business Journal
Friday, May 30, 2008