and accessory dwelling units could provide
a market response resulting in more units in
desirable locations.
Reducing or eliminating caps on density
(dwelling units per acre) or mandatory
minimums on parking can increase the
potential revenue of a project to the point
of becoming feasible and attractive to real
estate developers. While loosening
restrictions on increasing supply may not
entirely solve issues of affordability, it could
create additional capacity—especially in
neighborhoods where economic
opportunity is more readily accessible.
Some communities have gone one step
farther with zoning ordinances, by
requiring a certain portion of any new
development be priced in such a way that is
affordable to individuals of varying income
levels (generally set at 80 percent of area
median income or some such level).
This practice is known as inclusionary
zoning. While this tool ensures the
provision of affordable housing in new
developments, it can make new
development less likely if the potential
project revenue is reduced.
To counter this challenge, some
communities have provided density
bonuses, which allows developers to
build additional units beyond what the
zoning ordinance allows in exchange for
including affordable units within a project.
This regulatory approach to affordable
housing development incentivizes the
development of affordable housing rather
than requiring it. While inclusionary zoning
and/or density bonuses are not likely in the
near term in Central Indiana, these tools are
being utilized in other states as a way to
guide the market toward providing more
affordable housing.
Setting a course for growing Central Indiana’s economy—
and positioning housing strategies alongside those goals—
could have a greater impact on families than examining
housing strategies on their own (or economic strategies
solely), coordinating efforts provides a real opportunity to
achieve greater impact.
People-Oriented Housing Approaches
While tenant-based assistance through
Housing Choice Vouchers or other subsidies
is one way that some families are able to
reduce the cost of their housing to a
manageable amount, universally reducing
the cost of housing in this way is infeasible
and impractical.
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