Terner Center Blog: No Limits

Strengthening Feasibility Studies for Inclusionary Housing Policies

Posted on by Terner Center

Paired with other public investments and financing products, inclusionary zoning policies can increase the supply of affordable housing, particularly in high-cost regions.

Inclusionary policies work by requiring or offering incentives to developers to include below-market-rate (BMR) units in new housing developments, or pay a fee to an affordable housing fund in the city’s budget. These policies also can include offsets to developers, such as density bonuses or permitting streamlining. As Grounded Solutions Network and Lincoln Land Institute identified in a recent study, over 800 jurisdictions in the United States currently have inclusionary zoning programs.

Yet these policies can be controversial, and require a sensitivity and responsiveness to market economic conditions to ensure that inclusionary policies maximize the number of affordable units without yielding negative impacts on the production of new housing.

To determine what inclusionary ratios can achieve policy goals while working with the costs of building  (meaning a project would still pass an acceptable “hurdle rate” for profit), cities often undergo feasibility studies to identify the economic conditions that typical projects face. But no agreed-upon set of professional best practices exists for these studies, and there is criticism that the studies can be expensive, time-intensive, and don’t necessarily capture the “real-time” insights into market conditions that cities need for optimal decision-making.

This summer, the Terner Center, Grounded Solutions Network, and the Lincoln Land Institute convened a group of stakeholders for an exploration of the current and prospective “best” practices in feasibility study methodology. We brought together consultants who produce feasibility studies, academic researchers who study housing economics, and nonprofits and public agencies who commission and use the studies.

A full report and summary of these conversations are now available on Grounded Solutions Network’s inclusionary housing website.

For the most part, it is clear that there is currently a great diversity in feasibility study methodology and metrics, and no single approach is considered standard or best practice. Participants agreed that this is justifiable in part because methodologies should reflect the real, specific circumstances of a market--and often its submarkets.

Yet, the convening participants did agree that feasibility studies should be transparent in their documentation and should be, as much as possible, replicable. They also agreed that, too often, feasibility studies are taken as a red or green light for inclusionary zoning, whereas the studies should be treated more as one element in determining which policies are best-suited to increasing housing affordability in a city. Finally, the convening also made clear that there is appetite for new online resources--like the Terner Center’s housing development dashboard or Grounded Solutions Network’s Inclusionary Housing Calculator--that offer accessible and transparent tools to help cities and decision-makers better understand and fine-tune the impacts of inclusionary zoning policies in the context of their local markets.

Overall, this new report represents a step towards providing the necessary resources and documentation to improve feasibility studies and, more importantly, the inclusionary policies that they help to calibrate.


Announcing New Resources for Understanding Land Use in California

Posted on by Terner Center

Local land use--the accumulated set of decisions and policies about whether, how, and what we build--is a current that runs throughout much of our work here at the Terner Center. Land use policy not only shapes the supply of housing in a region, but is also deeply intertwined with sustainability, economic mobility, and access to neighborhoods and opportunity. Made possible by funding from the Department of Housing and Community Development, in 2017 the Terner Center launched a survey of planners across the state to learn more about local land use policy contexts in California. Today we are delighted to release…


InnovateHousing: New Ideas on the Future of Home

Posted on by Terner Center

In the face of a national housing crisis, where an unprecedented number of families are struggling to afford a home, can technology and the tech sector offer solutions? This was a key question animating InnovateHousing: New Ideas on the Future of Home, co-hosted by the Terner Center and Fannie Mae on Thursday, November 8th. The conference was invitation-only, but also accessible via a livestream. It brought together over four hundred people in-person and virtually, with a huge diversity of stakeholders and sectors represented on the panels and in the audience, including policymakers, entrepreneurs, lenders, developers, academics, and advocates. In opening…


Disparity In Departure: Los Angeles Region Supplement

Posted on by Elizabeth Kneebone and Issi Romem

This study was published jointly by BuildZoom and the Terner Center for Housing Innovation at UC Berkeley. Source: https://en.wikipedia.org/wiki/Coachella_Valley The Bay Area is undoubtedly at the forefront of a housing affordability crisis that is pricing a growing number of households—particularly lower-income households and households of color—out of the region. But it is not alone. Those same price pressures are apparent in other parts of the state (and country), including the Los Angeles region. While the two regions are different in many ways, they are similar in two key respects: both have powerful economies that have been drawing people in for a long time, and…


Are Tiny Houses Useful and Feasible for Addressing the Homelessness Crisis?

Posted on by Rebecca Coleman

As part of our commitment to the education and professional development of UC Berkeley students, the Terner Center highlights exceptional student work that connects to our mission and research agenda. The analyses and policy proposals put forth in these projects may not be reflective of the official position of the Terner Center. This piece is the fourth in a series to be released this summer by recent graduates of the City and Regional Planning and Public Policy graduate programs at UC Berkeley. The full report is available here. Tiny houses are on many people’s minds as a possible solution to address our homelessness…


School District Employee Housing in California

Posted on by Sean Doocy

As part of our commitment to the education and professional development of UC Berkeley students, the Terner Center highlights exceptional student work that connects to our mission and research agenda. The analyses and policy proposals put forth in these projects may not be reflective of the official position of the Terner Center. This piece is the third in a series to be released this summer by recent graduates of the City and Regional Planning and Public Policy graduate programs at UC Berkeley. The full report is available here. Housing costs in California have risen dramatically in recent years, particularly in employment-rich coastal urban…


Mapping Oakland’s Vacant Parcels

Posted on by Hayley Raetz

As part of our commitment to the education and professional development of UC Berkeley students, the Terner Center highlights exceptional student work that connects to our mission and research agenda. The analyses and policy proposals put forth in these projects may not be reflective of the official position of the Terner Center. This piece is the second in a series to be released this summer by recent graduates of the City and Regional Planning and Public Policy graduate programs at UC Berkeley. The full report is available here. Vacant Parcels in Oakland Despite Oakland's high demand for housing, vacant parcels remain abundant…


Measuring the Housing Permitting Process in San Francisco

Posted on by Brian Goggin

As part of our commitment to the education and professional development of UC Berkeley students, the Terner Center highlights exceptional student work that connects to our mission and research agenda. The analyses and policy proposals put forth in these projects may not be reflective of the official position of the Terner Center. This piece is the first in a series to be released this summer by recent graduates of the City and Regional Planning and Public Policy graduate programs at UC Berkeley. How long does it take to get a building permit in the Bay Area? Ask 10 developers, you will likely get…


Aligning Sustainable and Affordable Development in California

Posted on by Sarah Mawhorter and Carol Galante

California has long been considered a leader in combating climate change, but the state’s housing crisis—with inadequate supply in urban cores and a legacy of sprawling suburban development—threatens its ability to achieve its greenhouse gas emission reduction goals The Sustainable Communities and Climate Protection Act (Senate Bill 375) aligns land use and transportation planning in order to drive development in transit-accessible places and reduce car dependency and vehicle emissions. SB 375 resulted directly from the goals laid out in the Global Warming Solutions Act of 2006 (Assembly Bill 32) and was signed into law in 2008. SB 375 requires California…


Highlights from the James R. Boyce Affordable Housing Competition Studio Symposium

Posted on by Carol Galante

As the number of individuals and families experiencing homelessness remains at troubling heights, particularly in high-cost regions, planners, architects, and developers are working to confront the crisis with innovative design, financing, and construction methods. Through the James R. Boyce Affordable Housing Studio course—generously funded by a gift from CED alumni James R. Boyce (M. Arch. ‘67) and co-taught by David Baker and Daniel Simons of David Baker Architects—Carol Galante, Faculty Director of the Terner Center and the I. Donald Terner Distinguished Professor of Affordable Housing and Urban Policy in the College of Environmental Design, connects students from a variety of…