Over the past months, we at the Marin Environmental Housing Collaborative have talked to thousands of residents about the need for more affordable housing.
Thankfully, most people we meet overwhelmingly support our mission. However, the question of how we should fund these homes sometimes inspires more conversation. While we stress Marin’s desperate need for more funding, some residents argue that developers have a responsibility to pay for new affordable housing.
As it turns out, Marin County does require this. In a policy called “inclusionary zoning,” developers generally must ensure that 20% of the units they build are affordable or pay a fee for new projects.
On paper, this idea seems like a tempting answer to our housing crisis – developers pay, problem solved, right? But it is fundamentally a fool’s gold approach. And if we rely on it – or worse, work to expand it – our housing crisis will continue to intensify.
In fact, it’s almost shocking how few affordable homes were created through these inclusionary requirements. According to a 2023 county report, the policy was responsible for just 127 affordable homes in Marin since 1980. For context, the state requires Marin County to build over 14,000 homes by 2031, of which just under 9,000 must be affordable.
That means inclusionary housing would take over a thousand years to hit that latter number at our current rate. Even if developers build 14,000 units with affordable housing attached, only 2,800 would be guaranteed below market rate.
It might be tempting to simply increase the percentage of affordable homes developers have to build. But that won’t work. For starters, new state laws often give developers little incentive to listen to local inclusionary requirements. So long as developers set aside a small percentage of units to be affordable (generally around 10% to 20%), the state density bonus applies and helps advance the project.
This is good, because if Marin could increase inclusionary requirements, the housing crisis would likely become much more severe. One famous study found that new inclusionary requirements increased rents by 20% on average in California cities. The reasons why aren’t difficult to understand: Market-rate units have to be offered at a higher price to cover inclusionary units.
Already, Marin has created the fewest homes per capita in the Bay Area. Our inclusionary requirements play a factor in this. Increasing inclusionary requirements would make it even more difficult for projects to pencil out. That means less affordable homes. Crucially, it also means fewer market-rate homes. While affordable homes are essential for housing our workforce right now, studies prove that building market-rate housing lowers rents in the long run.
San Rafael makes a strong case study for inclusionary housing practices in Marin. After a report relayed that San Rafael’s 20% inclusionary requirement was one of the top hindrances to new development, the city made the then-controversial move to lower their requirements to 10% in 2020. This resulted in a nearly 100% increase in the number of new homes permitted by 2022.
The path to building enough affordable homes now is through funding. We need a whole lot more of it. In 2023, near-ready affordable housing projects requested over $3.5 billion, but the state only had $576 million to give out. In Marin, state and federal funding for affordable housing production and preservation was just $38 million in 2023, a 54% decrease from the year prior.
This lack of funding kills new homes, as nonprofit developers are forced to slowly collect financing from countless sources with their own regulatory requirements. It’s not uncommon for this purgatory to take over a decade, and many projects fall through. Currently, over 1,100 affordable homes in the county are ready to break ground but lack sufficient financing. If we don’t increase funding soon, many of these projects will perish.
While roping in new funding for affordable housing won’t happen overnight, Proposition 5 is a desperately needed first step. If it passes in November, it will make it easier for locals to fund new affordable homes without relying on a state government that has moved to cut funding in recent years. So let’s secure that money and get to work saving our communities.
David Newman, of San Francisco, is an intern for the Marin Environmental Housing Collective. Learn more at marinmehc.org.