Among the hot topics in affordable housing today, inclusionary zoning, also called inclusionary housing, consistently tops the list.

Inclusionary zoning (IZ) is a planning tool used by municipalities requiring or encouraging private developers to set aside a percentage of each new housing development to be priced affordably. An IZ policy, which is written into the local planning ordinance, must include a wide range of specifications, from definitions of affordability to developer incentives.

When properly designed and implemented, IZ ordinances can have an extremely positive impact on an area by creating diverse neighborhoods through economic integration, enabling middle- and working-class families to live in quality communities and increasing human capital resources by attracting a younger work force. IZ programs can create a sustainable supply of affordable housing units, while also increasing overall awareness of the affordable housing problem.

While the benefits of IZ are many, if proper precautions are not taken, IZ also has the potential to hinder growth by placing too great a strain on developers. Thus, the crux of a successful ordinance is to balance additional cost to the developer with an appropriate package of incentives. For instance, the higher the   set-aside requirement, i.e. the percentage of newly constructed units to be priced affordably, the greater the benefits must be to offset the added burden. While planning an ordinance, it is vital to begin a conversation with local developers to determine what incentives would be most appealing to them.

Through IZ, local governments can translate their intangible assets – power to grant density bonuses, expedite the permit process, relax design standards, waive municipal fees, etc. – into affordable housing units. This is truly a win-win.

The Initiative is currently investing in two organizations who are leading the charge for IZ in North Carolina, Davidson Housing Coalition and the Outer Banks CDC.  

Both of these grantees have developed ordinances that are beginning to bear fruit, a sign of the momentum that IZ is slowly but surely gaining across the state. More will follow on these organizations and their work with IZ in the summer edition of the newsletter.

If you would like to read more about IZ, including the ordinances for Dare County or the Town of Davidson, please visit the Initiative website at: www.ncinitiative.org/IZ

Photo: The town of Davidson designed and implemented one of the state's IZ ordinances.

East Carolina Community Development, Inc. (ECCDI) recently earned bragging rights at a groundbreaking ceremony in Jacksonville, NC. On May 31st, ECCDI received a $4.6 million check for a new 46-unit multi-family housing complex, called Emmerdale Apartments, from a package of bank grants and a municipal loan.

Located in Jacksonville, NC, the development will consist primarily of traditional 1-3 bedroom apartment units and will also include a number town homes. Construction of the residential buildings as well as a community building is expected to be completed by November of this year. While the entire complex will be affordable, the units will have varying levels of income targeting.

Funding for Emmerdale,  which  is  a Low-Income Housing Tax Credit (LIHTC)

development, came from a  combination of the Federal Home Loan Bank of Atlanta, Apollo Housing Capital and a low interest CDBG loan from the City of Jacksonville.

Keith Walker, executive director of    ECCDI, is no stranger to multi-family

Photo (left to right): Jack PenaSoto, Eric Mondres, Congressman Walter Jones, Keith Walker Walker and Peny Harker

housing and to LIHTC developments. In a few short years, ECCDI has built five senior housing complexes and four   multi-family complexes from Jacksonville to New Bern to  Beaufort.

"It's been a labor of love for ECCDI over the last three years," Walker said. "We've been able to secure funding to build affordable housing for working people in Jacksonville."

And East Carolina isn’t showing any signs of slowing down. There are two developments scheduled to break ground later this year, one in Jacksonville and the other in Newport. Thanks to the hard work of community economic development organizations like ECCDI, North Carolina may remain an affordable place to live yet.