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City could lose ground on affordable housing

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Paul Snyder

paul.snyder@dailyreporter.com

A cash-strapped city budget might force Madison to lose the affordable housing created through the city’s now-abandoned inclusionary zoning ordinance.

“There are some out there in areas where you’re not going to find many other affordable opportunities,” said Barb Constans, a grants administrator for the city and administrator of Madison’s inclusionary zoning program. “The goal, originally, was to build permanently affordable units. Once you do it, you want to try to keep it that way.”

Madison’s Community Development Authority could buy some inclusionary zoning units to preserve affordable housing in more expensive parts of the city, but the CDA does not have much money. Inclusionary zoning was a city ordinance requiring developers include affordable units in new housing developments in exchange for benefits such as flexibility in zoning.

“The mayor authorized $135,000 in this budget for the CDA to look for and buy IZ properties,” Constans said. “The CDA is talking about buying units already owned once those occupants decide to move, and an ancillary part of the discussion is to buy units that aren’t occupied so that the costs of developing them don’t just roll out.”

But Constans said rough estimates on how much it would cost to buy or hold the units are difficult to determine in the housing market, and the city does not have know when occupants might decide to move. Trying to keep a few affordable units affordable could be a gamble, she said.

“And $135,000 is barely enough to buy one,” Constans said, “let alone buy it and hold it.”

The city’s efforts to preserve inclusionary-zoning housing are well-intentioned but half-hearted, said Carole Schaeffer, executive director of Smart Growth Greater Madison Inc.

“Logistically, you have no idea how long people are going to live in units, and if they do move, whether you’ll be able to buy it at assessed value,” she said. “At best, if you buy these, I think it might only work for one cycle because I don’t know where the city could get the money to keep buying and maintaining these properties.”

There are 27 occupied inclusionary zoning units on which the city has the right of first refusal if the occupants move, Constans said. She said there are three unsold units the city is marketing.

There could soon be more.

The city approved Madison-based Veridian Homes’ 1,000 Oaks subdivision plan before inclusionary zoning expired. Madison at first held the line, saying the 46 inclusionary zoning units planned for the development would have to remain even though the ordinance was due to sunset.

Veridian’s Vice President Don Esposito said the city ultimately waived 44 of the units.

“We’ll treat it the way we always have,” he said. “When they are developed and marketed, we’ll see if they sell. And if not, we’ll ask the city to release them from the program.”

During the almost five-year run of inclusionary zoning, Esposito said, Veridian developed more than 120 inclusionary zoning units, only three of which were purchased. The rest, he said, were ultimately released from the program.

“It had an economic impact on us,” Esposito said. “In terms of time spent developing plans and winding them through the city’s approval processes, we spent well in excess of $600,000 that provided no return.”

Constans said there are no guarantees the CDA can buy and hold any of the remaining units. Although there are no ordinances obligating the CDA to acquire the units, and it might be easier to release them from the program, the value of keeping some affordable housing options downtown should not be understated, she said.

The idea is admirable, Schaeffer said, but, then, so was the original idea of inclusionary zoning.

“No one ever argued that the intentions were bad,” she said. “In the end, it’s just not practical.”

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