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New Regulations Improve Inclusionary Zoning Program

Thursday, September 7, 2017
Proposed Changes Open for Public Comment

(WASHINGTON, DC) – A notice of emergency and proposed rulemaking to amend the regulations governing the Inclusionary Zoning (IZ) program was published in the DC Register on Friday, September 1, 2017.

The IZ program is one of many tools used in the District of Columbia to help address the affordable housing crisis, where, in exchange for bonus density, developers of larger new construction/substantial rehabilitation projects must set aside a percentage of housing units as affordable.

The new regulations propose a number of changes based on feedback the agency received from current program participants and an order by the DC Zoning Commission that simplified the program, to include setting aside most affordable rental units for households earning 60 percent or less of Median Family Income (MFI) and most affordable for-sale units for households earning 80 percent or less of MFI.

Other amendments include:

  • Clarifying the household registration process: Households must attend an IZ orientation before registering for the lottery, and households interested in purchasing an IZ unit should attend the homeownership training program after registering for the lottery.
  • Clarifying the lottery process: In conforming to DHCD’s current practice, the regulations provide that households must confirm interest in an IZ unit prior to a lottery, so that only interested households are included.
  • Income limits on lease renewals: In codifying current practice so that more households can remain in their IZ units, the regulations provide that the maximum household income upon renewal may be up to 140 percent of the higher of: (1) the then-current maximum household income; or (2) the maximum household income at the time of initial lease execution.
  • Combining lists of those who live and work in the District: To allow those who work in the District much greater opportunity to buy/rent an IZ unit, the regulations streamline how lottery selectees are ranked.
  • Allowing flexibility to housing cost limitations: Because so many households are paying even more for their current housing, the regulations allow households to spend up to 50 percent of their income on housing costs. The prior maximum of 38 percent for rental IZ units or 41 percent for purchase units; however, remains as an explicit program recommendation.

In August, DHCD released the Fiscal Year 2016 Annual IZ Report, which documents the growth of the IZ program and its increased importance in producing more affordable housing for District residents.

As part of the public comment process, DHCD will host a briefing at 2 p.m. Friday, September 15, 2017 at its Housing Resource Center, 1800 Martin Luther King Jr. Avenue SE.

Agency representatives will be available to summarize the proposed changes to the regulations and answer any additional questions. To register, please visit http://tinyurl.com/DCIZRulesBriefing or call 202-442-7200.

As emergency regulations, the published rules take immediate effect and remain in effect for 120 days or until final regulations are published after the comment period ends. The regulations were issued on both an emergency and proposed basis to effectively administer the Zoning Commission changes and rapidly provide needed affordable housing.

The public comment period ends on Saturday, September 30, 2017.

Bowser Administration’s Commitment to Affordable Housing

Since taking office, Mayor Muriel Bowser has made affordable housing a major focus of her administration, using tools like IZ as well the Housing Production Trust Fund. The District’s multi-pronged approach to housing production and preservation, homeownership, and development of vacant properties is winning national recognition. On April 28, DHCD was announced as a finalist for the Urban Land Institute’s Larson Housing Policy Leadership Award. This annual award, provided by ULI’s Terwilliger Center for Housing, recognizes innovative ways the public sector is addressing the nation’s affordable housing crisis. The winner will be announced next week.