News Archives InfoFax Affordable Finance Initiatives research mainpage <Back to Infofax Archive Page>

11/6/01: David Rusk explains in his book Inside Game/Outside Game, how urban sprawl, race and concentrated poverty have interacted to shape metropolitan America.

Inclusionary Zoning: A Viable Solution to the
Affordable Housing Crisis?

Inside Game/Outside Game: The Emerging Anti-Sprawl Coalition

By David Rusk

Over 25 years ago, wealthy Montgomery County, Maryland, outside Washington, DC, adopted its Moderately Priced Dwelling Unit (MPDU) ordinance. The "MPDU" mandate was the nation's first inclusionary zoning law.

In any new housing development of 50 or more units, the county council ruled that at least 15 percent of the housing must be affordable for the lowest one-third of the county's households. As compensation, developers could receive a density bonus of up to 22 percent. By law, the county public housing authority could buy one-third of the affordable units.

In the decades after the advent of the ordinance, for-profit homebuilders produced almost 11,000 MPDUs-two-thirds purchased by young teachers, police officers, retail and service workers. Over 1,500 MPDUs, scattered in more than 200 middle class subdivisions, were purchased by the housing authority.

The result? Montgomery County became one of the nation's more racially and economically integrated communities. Ensuring housing for a diversified labor force also was key to successfully diversifying the county's job base.

A Different Philadelphia Story

Let us imagine what a major metropolitan area-Greater Philadelphia, for example-would be like today if, by some political magic, a similar inclusionary zoning policy had been applied 25 years ago to its 339 cities, boroughs, towns and townships (spread across eight counties in two states). During that period, developers built about 575,000 new homes-85 percent in the suburbs of Philadelphia, Chester and Camden. Under a Montgomery County-type formula, 38,000 new units would have been affordable for working class households. Another 19,000 new units would have been bought or rented by a regional network of housing authorities.

With federal subsidies, every public housing project in Greater Philadelphia could have been redeveloped as mixed-income housing, reducing overall unit densities by one-third in the process. Two-thirds of the new residents could have been market rate owners or renters; only one-third would have been public housing households (including low-income senior citizens). The city's high-poverty ghettos would have been reborn as mixed-income neighborhoods. Some 17,000 public housing families, displaced from their former projects, could have moved (in small numbers) into scattered site units throughout the city's suburbs, as required by the regional mixed-income housing rule. Philadelphia*s suburbs would be more integrated by race and income.

High concentrations of poverty would have vanished. Poverty rates could have been brought below 30 percent in every one of 70 high poverty census tracts in Greater Philadelphia.

The region's crime rate would have dropped dramatically. Attending low poverty suburban schools, poor children's test scores would have jumped 10 to 15 percentage points. Unemployment among their parents would have dropped (perhaps by one-third, one study suggests) in job-rich suburbs. Relieved of a heavy burden of poverty-related costs and acquiring a more economically balanced population, the city's fiscal distress would have been alleviated. City neighborhoods and schools would become feasible choices for more middle-class families (both white and black).

With no high poverty neighborhoods expelling remaining middle class residents from the core, growth pressures on the periphery would probably ease. Rather than consuming land at six times the rate of regional population growth, the Greater Philadelphia area*s rate of sprawl might even drop to only twice the rate of population growth even without stringent regional growth management controls.

Inside Game/Outside Game

How urban sprawl, race and concentrated poverty have interacted to shape metropolitan America are the central themes of my new book, "Inside Game! Outside Game" (The Century Foundation/Brookings Institution Press). The dramatically different Greater Philadelphia illustrates what might have been the impact of changing the public "rules of the game," particularly as they affect land development and housing markets.

"Inside Game/Outside Game" draws on extensive analysis of census data and my experiences as a speaker and consultant on urban policy in over 90 metropolitan areas during the 1990s. The title conveys the book*s principal finding: the downward course of poverty-impacted urban neighborhoods and declining central cities is rarely reversed by solely playing the "inside game (policies and programs targeted solely within the boundaries of such neighborhoods and cities). Reversing urban decline requires playing and winning the "outside game" as well (policies that deal with regional trends beyond the target communities* boundaries).

Key elements of the "outside game" are:
  • regional land use planning and growth management (to combat suburban sprawl and urban abandonment);
  • regional "fair share" low- and moderate-income housing (to reverse rising economic segregation); and
  • regional tax base sharing (to offset widening fiscal disparities).

Changing the "Rules of the Game"

Changing these "rules of the game" is primarily a task for state legislatures. Some state laws provide for relatively few local governments. Maryland*s dominant, "big box" county governments, for example, have both legal and political ability to adopt county-wide growth management and mixed-income housing rules.

However, most metropolitan areas feature a multiplicity of "little box" local governments that resist voluntary compacts on tough, controversial issues. Only changes in state or federal law can set different region-wide requirements. And although federal writ follows federal dollars, it is state legislatures that draw up the rules regarding what local governments can do and how they do it.

No policy would have a greater impact than mandating "fair share" mixed-income housing as a modest proportion of all new developments. Across metropolitan America there are twice as many poor whites as there are poor blacks or poor Hispanics. Poor whites, however, rarely live in poverty-impacted neighborhoods. Only one of four poor whites lives in a neighborhood where poverty rates exceed 20 percent (and 1 of 20 in neighborhoods with poverty rates higher than 40 percent).

By contrast, the numbers are reversed for poor minorities. Three of four poor blacks (and half of poor Hispanics) live in poverty-impacted neighborhoods-and one-third of poor blacks live in high-poverty neighborhoods.

This racially skewed concentration of poverty drives up crime rates, drives down local school test scores, depresses local property values and often drives up tax rates of fiscally stressed city governments.

Yet research demonstrates that "mainstreaming" poor minorities into middle class communities (as most poor whites are) slashes crime and delinquency, boosts school performance, narrows the "segregation tax" that minority homeowners pay in the value of their homes and eases fiscal burdens on city governments.

Mixed-income housing proposals, however, run into many Americans' deepest fears about race and class and are hardest to achieve politically. "Inside Game/Outside Game" argues that urban sprawl is the issue around which the most potent coalition can be built.

New Coalitions for Regional Reforms

Farm and preservation and environmental groups have long pressed for state growth management laws. But sprawl's impact has been greater on social geography than natural geography.

Frustrated suburbanites, stuck in traffic, are currently the most visible recruits to the anti-sprawl movement, but other groups are signing on. Mainstream business organizations, like the Silicon Valley Manufacturers Group, Chicago's Commercial Club, the Greater Baltimore Committee and the Atlanta Chamber of Commerce have become growth management converts. University researchers, like the Ohio Housing Research Network, are increasingly assessing sprawl's costs and providing fuel for grassroots organizers.

The civil rights movement changed the nation's racial rules (our stewardship to each other). The environmental movement changed the nation's environmental protection rules (our stewardship to nature).

Now civil rights and environmental activists are tentatively reaching toward each other to change the rules that divide American society by space and class.