Zoning Practice — February 2009

Ask the Author

Here are reader questions answered by Donald Shoup, FAICP, author of the January 2009 Zoning Practice article "Graduated Density Zoning to Encourage Land Assembly for Infill Redevelopment."

Question from Nicole Cromwell, AICP, Billings, Montana:

Do you know if any locations have used this density bonus to provide workforce or affordable housing (and thus restrict resale values)?

Answer from author Donald Shoup, FAICP:

I don't know of any city that has used graduated density zoning to provide affordable housing. Assembling sites for affordable housing is especially difficult because the limited rents cannot support high land values, and the high cost of conventional land assembly usually means that only high-end development can make a profit for infill projects. Graduated density zoning can help solve this problem in three ways.

First, the windfalls associated with a density bonus and land assembly may allow cities to require developers to include some affordable housing units without seriously reducing the incentive to assemble sites for market-rate housing. Second, if the redevelopment re-houses more people than it displaces, the increase in the housing supply can moderate housing prices overall. Third, by reducing the incentive to hold out from land assembly, graduated density zoning can accelerate recycling of land for all housing, including affordable and workforce housing.

Using incentives to help assemble land can turn protracted zoning disputes into voluntary market transactions. The delays and attorney fees involved in zoning disputes increase the cost of housing. If developers have to fight for five years to get a building permit, and they turn up at meetings with their attorneys rather than their architects, cities will never get much affordable housing. So if graduated density zoning does lead to voluntary land assembly for infill redevelopment, I suspect that cities will get more affordable housing as a result.

Question from Benjamin Tripp:

In your opinion, could Graduated Density concepts be applied not just to residential uses, but commercial ones as well? That is, could an ordinance be written that would allow say, only residential uses on lots smaller than one acre, but on parcels larger than one acre various commercial uses would be allowed, thus providing an incentive for land assembly?

Answer from author Donald Shoup:

In an older subdivision with small houses on large lots, many residents might welcome the prospect of graduated density if the city requires developers to help finance sidewalk repairs, street trees, and underground utilities around their projects. Infill housing might include some ground-floor retail uses, such as a grocery store, restaurant, or day care center. If the minimum site size for dense development were an entire block, the possibility of assembly would increase everyone's land value but no one would suffer from adjacent redevelopment next door or behind. The worst that could happen would be higher density across the street, but it would have all the required public amenities. Gradually, the entire neighborhood might make the transition into higher density, one block at a time.

I think graduated density zoning would also work in areas that are already fully commercial. Many major commercial strips in American cities are lined with little more than shacks on expensive land. If a city allowed higher density on lots wider than, say, 200 feet, developers might assemble wide lots for infill projects with retail below and offices or housing above.