Editorial: Want fewer homes and higher prices? Inclusionary zoning is for you

The Editorial Board / Pittsburgh Post-Gazette

As Pittsburgh City Council prepares to consider a proposal by Mayor Ed Gainey to expand citywide so-called “inclusionary zoning,” or IZ, two very different housing proposals — one part of reimagining the Ohio riverfront, the other an affordable housing redevelopment in Downtown — have made headlines. The feature they both share? They'd be illegal if Mr. Gainey’s IZ legislation passes.

These examples demonstrate how IZ’s one-size-fits-all approach to housing straitjackets developers of all kinds, and stifles badly needed residential construction in a city where affordability — once its calling card — has become a serious issue for livability and growth.

Inclusionary zoning in Pittsburgh began in 2019 with an overlay district — that is, zoning regulation layered on top of existing zones — in Lawrenceville in response to rapidly rising housing costs in the neighborhood. The rule required all new developments of 20 or more units to set aside at least 10% for families at or below 50% of the area median income (AMI), which is about $50,000 for a family of four.

Unsurprisingly, IZ did not contribute to lower housing prices in Lawrenceville. But, especially when combined with high construction costs and interest rates, it did contribute to a slowdown in new development in the neighborhood — which means that it stifled housing supply while demand continued to rise. In other words, the cost of living in Lawrenceville was much more likely increased than decreased by IZ.

Nevertheless, city leaders pressed forward in 2021 with an expansion of IZ to Bloomfield and Polish Hill. The rules caused damage. IZ, in combination with other stifling zoning rules, eventually scrapped a project promising 248 apartments at Bloomfield's Community Supermarket site, which will now remain an empty parking lot greeting everyone entering the neighborhood.

The theory behind IZ, that compelling developers to include deeply affordable housing in their projects will result in more deeply affordable housing, has yet to work in practice. And if IZ were expanded citywide, these two new developments would likely include less affordable housing than currently planned — or they wouldn’t get built at all.

The first is the residential portion of the Esplanade project, a long-delayed attempt to revamp the Ohio riverfront near the West End Bridge. Piatt Companies is looking to build a 19-story apartment building with more than 400 units, 20% of which will be affordable to households making 80% or less of AMI. But because the development does not include the precise requirement of 10% or more at 50% AMI, Piatt would have to go back to the drawing board — and likely settle for fewer affordable units in order to satisfy arbitrary IZ rules.

The second is even more remarkable: the redevelopment of the former John P. Robin Building, once home to Jones & Laughlin Steel headquarters and then City of Pittsburgh offices, by affordable housing developer Action Housing. The group’s plans include 68 units, all of which will be affordable for families between 50% and 80% of AMI. But under IZ, this would not be allowed, since no units are affordable at 50% or less of AMI. Any project that would fulfill the IZ requirements would involve creating less affordable housing overall.

While Pittsburgh does need more deeply affordable housing, one-size-fits-all inclusionary zoning is not the way to achieve that goal. Better to allow developers of all kinds to build more housing of all kinds, applying downward pressure on prices and freeing up other housing stock at lower prices for those who need it.

That’s a real affordable housing policy. IZ is just grandstanding.