20 years ago, the Colorado Supreme Court decided that classic public private partnership (PPP) ‘inclusionary zoning’ projects were a form of rent control, expressly forbidden by legislation.
This year, housing activists are pushing hopefully for a change in fortunes for PPP projects, even though everywhere the bloom is coming off that rose, at least as a meaningful way of producing quantities of affordable housing.
PPP inclusionary zoning delivers affordable units by shifting some of the cost of the affordable units somewhere else. One possibility is to shift the cost to the other units in the building. Potential buyers or investors might balk at the high unit prices, in which case such projects might not get built at all.
Or the cost could shift to governments or some other Good Samaritan, in which case the project would be guaranteed. Experience elsewhere indicates this creates the opportunity for shoddy, corner-cutting building.1
So really, is Colorado’s late embrace of PPP housing worth the bother? Directing subsidy dollars to projects that are need-driven, not investor-profit-driven, could deliver far more reliable and longer lasting truly affordable housing, compared to ’boutique’ affordable housing projects.2
A further benefit, they could provide relief for middle classes struggling with affordability via a ‘trickle up’3 effect.
Read more on Colorado’s tardy embrace of PPP inclusionary zoning projects at CPR News: After 20 Years, Colorado May Reverse Decision That Limits Cities’ Affordable Housing Powers
