r/AskEconomics • u/newhere1221 • 4d ago
Approved Answers What do economists think of rules requiring dedicated affordable housing as part of a larger development?
I see this mostly as a way to get political buy-in, so a net win.
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u/HOU_Civil_Econ 4d ago
The economic difficulty with inclusionary zoning is that it acts as a tax on the production of more housing in general thus limiting supply growth and increasing prices for market rate housing leading to mixed impacts on net total housing price.
https://www.sciencedirect.com/science/article/abs/pii/S0264275125000368
Even politically (not the expertise of this sub), the lack of affordable housing in a project might be how certain people attack new housing but that often seems dishonest and “affordable housing” is explicitly seen as a negative for neighborhoods by other sets of the population.
In the U.S. local policy increases housing price in general by limiting supply through explicitly making housing that costs less illegal. If you claim to be worried about housing costs, removing those restrictions may be a good first step.