Elusive Inclusionary Zoning

Inclusionary zoning, that is, mandating that a percentage of units in multiple unit buildings be set aside for low- or moderate-income households, has been a topic of discussion in the Common Council for a while now. In November 2020, just two aldermen--Rebecca Wolff (First Ward) and John Rosenthal (Fourth Ward)--were exploring the idea. In April 2021, the topic became the subject of a Common Council ad hoc committee. The most recent meeting of that committee, which seems to be made up only of Wolff, Rosenthal, and Council president Tom DePietro, took place this past Wednesday. 

Some inclusionary zoning provisions already exist in the city code. As Gossips pointed out in November, Chapter 325-17.4 F of the code imposes inclusionary zoning on the Riverfront Gateway District, the area where Hudson Terrace is located. Here's the language that's found there:

Inclusionary zoning. In order to ensure an economically diverse housing stock in the R-G District, the development or redevelopment of any multiple dwelling, multiple-family dwelling, or the subdivision of a parcel resulting in 10 or more dwelling units shall only be developed or redeveloped as set forth in this subsection. For purposes of this subsection, the term "redevelopment" means any activity related to a building or structure for which the issuance of a building permit would be necessary pursuant to § 325-30.

(1) Affordable housing set aside. At least 20% of the total number of dwelling units must be set aside and affordable as "low-income housing" or "moderate-income housing" as those terms are defined in § 325-42, whereupon the Planning Board shall grant a density bonus to the owner or developer of such parcel of no greater than 30% as provided for in § 325-28.2 G(1) (a) and (e), (2) and (3).

At Wednesday's meeting, Jeff Baker, counsel to the Council, brought § 325-28.2 to the committee's attention, the section of the code that offers density bonuses for affordable housing set asides. He asked the committee if they intended to replace the incentives that are already in the code with mandatory inclusionary zoning.

Wolff wanted to know if there was a draft of an inclusionary zoning law. When Baker said there was none, Wolff said there was no excuse for not having a draft. "There needs to be some movement," she said and suggested, "Maybe someone else can do this." Baker asked, "How are you going to reconcile [new legislation] with the other provisions in the code?" Wolff said a density bonus was typically offered as part of inclusionary zoning and reminded Baker that he had been "charged with preparing two drafts--one that had an incentive and one that did not." At some point in the discussion, Michelle Tullo, the recently appointed Housing Justice Manager, that she had never seen an inclusionary zoning policy that had no benefit or no choice and advised, "It is illegal to not give them anything."

Rosenthal asked if a density bonus would replace the previously discussed option of avoiding inclusionary zoning by paying a fee to the Housing Trust Fund. Wolff insisted that if there was to be a fee, it had to be a very high one. Rosenthal opined that a density bonus, which mostly has to be with increased building height, "becomes a very attractive way to entice developers," but added, "We have to balance the historic aesthetic." 

DePietro told the committee, "We're getting the reputation of being too hard on developers." Tullo also offered, "I keep hearing that the process here is unpredictable." Wolff insisted that both complaints had to do with the PILOT process, reminding everyone that the City had denied a PILOT to Crosswinds in 2006. Wolff is currently recommending that the IDA (Industrial Development Agency) retain Ted De Barbieri and Keith Hirokawa, two professors from Albany Law School who have a consulting firm called Living Communities Consultants, LLC, to produce "a process by which the Hudson Industrial Development Authority [sic] board can review PILOT applications submitted by developers, and a scoring rubric that the Hudson Industrial Development Authority [sic] board can use to score PILOT applications with an eye towards social equity." 

Not everyone on the committee agreed that the PILOT process was the reason Hudson was getting a reputation of being "too hard on developers." Although not discussed, there are a few other things that might contribute. One could be the misreading of the Schedule of Bulk and Area Regulations for Residential Districts back in 2013, which led to the assertion that each unit in a multiple unit dwelling in an R4 district had to be a minimum of 1,500 square feet. Another might be the hue and cry and protests about no public input when Hudson Development Corporation tried to find a partner for the development of the former Kaz site in 2018. Another might be the passion and unpleasantness last year surrounding the historic designation of the old Shiloh Baptist Church. With the exception of the 2013 fiasco, these instances can be seen as a community trying to protect its historic character from inappropriate development.

Tullo pointed out that inclusionary zoning is usually used to get affordable housing in areas of a city that have a different school district or better services but that rationale really didn't apply in Hudson, where the entire city is in the same school district. Wolff explained that the goal was "to create a city that has a range of people of different incomes." Rosenthal cautioned against building too much housing for the "lower end of income levels" or "disincentivizing to the degree that no one wants to build here." He concluded, "As much as we want to do this idealistic thing, we are still living in a market economy." DePietro suggested that a goal might be creating apartments that rented for between $850 and $1,300 a month.

Tullo commented, "I still haven't gotten a sense of the type or quantity of development you are considering. . . . It sounds kind of like throwing stuff on the wall to see what sticks."

Wolff observed, "Six years ago there was a lot of naturally occurring affordable housing on Warren Street," then acknowledged, "Inclusionary zoning may not be the tool to get more affordable housing."

Wolff suggested that Tullo and Baker work together to "get this moving" and said she wanted the ad hoc committee to meet again before its next monthly meeting. Baker promised a draft of the law before he left for vacation on August 22. The draft is expected to include a "high fee" for opting out of inclusionary zoning. The question of incentives is still unresolved.

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