Mayor Vincent C. Gray (D) and D.C. Department of Housing and Community Development Director Michael P. Kelly recently announced new regulations for the District’s Inclusionary Zoning (IZ) Program in an attempt to strengthen efforts to provide quality affordable housing. New regulations are expected to streamline the regulatory process, address building permit issues, enhance the outreach to qualified residents and make it easier for developers to build affordable housing units.

“These programmatic changes to the Inclusionary Zoning Program are vital to ensuring quality affordable housing is available for the residents of the District of Columbia,” said Gray. “My administration heard the concerns and made adjustments as needed.”

Inclusionary Zoning is a program created to preserve affordable housing opportunities by requiring new rental or condominium buildings with more than 10 units and renovated properties that are increasing the building size by more than 50 percent, to include an assigned percentage of affordable units in exchange for a density bonus. The specific goals of the IZ program are to create mixed-income neighborhoods, produce affordable housing for a diverse labor force, seek equitable growth of new residents and increase homeownership opportunities for low- and moderate-income levels. According to the 2013 IZ Annual Report, the average rent for IZ units in 2013 ranged from $1,505 for studios to $1,935 for two bedroom units.

Under the new regulations, prospective homeowners must attend counseling prior to registering for the program. This provision will better prepare residents to immediately purchase if they are selected for available for-sale units. Developers now have the option of using a lottery system to fill their units. The new regulations will give them additional options to submit a marketing plan, which must be approved by DHCD, or utilize a District-licensed real estate broker to attract purchasers.

Gray’s announcement was made in conjunction with the DHCD release of the 2013 IZ Annual Report, highlighting the progress of the IZ program, including programmatic challenges and low production numbers.

The 2013 IZ Annual Report notes that the median income of households renting IZ units as of the end of 2013 was $60,000 and that the three buyer subsidized projects completed in 2013 totaling 181 units of which 22 were required by IZ to stay affordable after subsidies expired. The average subsidy for all 181 units was $89,719 for a total subsidy toward IZ units of $1,973,821.

“This is has been a long time coming, and we are so proud to be able to make significant strides with the Inclusionary Zoning Program. We have heard and assessed concerns, and we believe these new regulations will address current issues as we continue to work with the development community and residents,” said Kelly. “The 2013 IZ report shows evidence of steady growth. With these new regulations, we hope to see significant improvements in developers’ ability to fill units.”

The 2013 IZ Annual Report shows that 19 projects with 95 inclusionary units started construction in 2013 and the Office of Planning is tracking another 99 IZ-applicable projects in pre-development stage that will provide another 1,124 inclusionary units. This represents an increase of 45 IZ units in the IZ pre-development pipeline since the 2012 Annual Report. In total, the IZ Report shows that 3,059 new units were issued building permits during 2013.

The regulations are open for public comment for the next 30 days before becoming final. To view the regulations and the full IZ report, visit DHCD’s website at www.dhcd.dc.gov.