What effect would the 25% on-site Inclusionary requirement in the proposed June charter amendment have on our housing market? Is there a connection between the affordability increase and a loss of housing? That’s what Chief Economist, Dr. Ted Egan and his team were asked to answer in only 5 weeks. Using data from 2001 – 2013, the Controller and his team created an economic model used to estimate which zoning, structural, and market factors statistically explain which City parcels added new housing over the 12-year period. The goal was to predict the impacts of the proposed Inclusionary changes. Dr Egan visited RegComm last Friday to share his 17-page report and discuss his conclusions. These include:
- Increased private investment in affordable housing would improve affordability for low-income residents who already spend at least half of their income on housing.
- However, this would increase development costs, resulting in a slowdown in the market. This would have an overall negative impact on the housing market by putting an added strain on the existing supply.
- Policy changes that make market-rate housing infeasible raise the price of existing housing.
His study is a preview of what’s expected to come in a more lengthy economic feasibility analysis due later this spring.
If you don’t have time to read the full 17 page report, these four pages explain each scenario.
