In California we have
many local ordinances that require large builders to set aside units
or money for housing for people with low incomes. It is politically
called “affordable housing” and technically called “inclusionary
zoning.”
This has been around for thirty years and is bad policy. What is happening is that Lefty local politicians know that the public considers “affordable housing” to be a desirable public goal. But they also know that the public would never vote for increased taxes to pay for it. So these contemptible public officials have create a specific tax on new construction that can only be used for one specific policy purpose. It is a single purpose tax --- which is always bad. The auto companies have given us a single purpose tax on gasoline that can only be used to build highways. Single purpose taxes are always self-serving bad policy.
I turns out that this
“affordable housing” tax also fails to do what it intends to do.
Benjamin Powell and Edward Stringham have published a paper studying inclusionary zoning over a 30 year period and found that it produced virtually no housing --- a few dozen units per county. I read the paper and it is simple and accurate. In a few pure cases Powell and Stringham were able to find that inclusionary zoning completely stopped new housing construction, so housing prices just kept rising and becoming less affordable.
It is time to get rid of this piece of bad policy that doesn't work.