There are always trade offs. There is no free lunch. There is always an opportunity cost for what could have been done in absence of IZ. It’s even illustrated in the chart of units by IZ rate. The unit maximizing rate of IZ is 0%.
IZ is failing in Seattle and the requirement is vanishingly small, a few handful % of the project value.
Ultimately, when you’re in a housing deficit, IZ is just choosing favorites about who gets displaced. When the market is in disequilibrium because of a shortage, there will be a loser, IZ just says it’s someone who doesn’t/can’t fill out the paperwork.
A possible middle ground between IZ and LVT: Auctioning or selling upzoning capacity for new developments. Let developers buy additional FAR at a flat price per square foot. It has the political economy benefit of IZ (no new tax on voters, optically appears that developers fund everything). Importantly, it can also outflank IZ from the Left - "IZ means the government is delegating the task of providing subsidized housing to private developers." It is both more efficient and more politically favorable to charge developers and then use the cash to build or buy subsidized housing directly!
There are always trade offs. There is no free lunch. There is always an opportunity cost for what could have been done in absence of IZ. It’s even illustrated in the chart of units by IZ rate. The unit maximizing rate of IZ is 0%.
IZ is failing in Seattle and the requirement is vanishingly small, a few handful % of the project value.
Ultimately, when you’re in a housing deficit, IZ is just choosing favorites about who gets displaced. When the market is in disequilibrium because of a shortage, there will be a loser, IZ just says it’s someone who doesn’t/can’t fill out the paperwork.
A possible middle ground between IZ and LVT: Auctioning or selling upzoning capacity for new developments. Let developers buy additional FAR at a flat price per square foot. It has the political economy benefit of IZ (no new tax on voters, optically appears that developers fund everything). Importantly, it can also outflank IZ from the Left - "IZ means the government is delegating the task of providing subsidized housing to private developers." It is both more efficient and more politically favorable to charge developers and then use the cash to build or buy subsidized housing directly!
I haven't had time to skim this in detail, but I wonder how you can even unwind overly heavy IZ requirements.
-The general public thinks that IZ "improves affordability"--even if it is at the cost of many more market rate units not existing
-Any attempt to remove/water down IZ feels like an attack on affordable housing even if it is a more optimum outcome for housing production.
How do you create a political coalition/economy that eventually beats bad policy?
Short of a huge supreme court case overruling IZ we're going to be stuck with a huge tax on new and existing housing for a very long time.
Fuck man just build houses and let people sell or rent them for whatever they want.
If you want to give poors free money just give them free money: