Harnessing the Real Estate Market for Equitable Affordable Housing Provision through Land Value Capture: Insights from San Francisco City, California

• Main Authors: Bernard Nzau, Claudia Trillo
• Format: Article
• Language: English
• Published: MDPI AG 2019-07-01
• Series: Sustainability
• Subjects: affordable housing; inclusionary housing; land value capture; rezoning; social inclusion
• Online Access: https://www.mdpi.com/2071-1050/11/13/3649

Affordable housing remains a serious problem in many countries. Even as the housing affordability crisis deepens, most cities continue to exhibit robust real estate markets with high property prices. The low-income and poor households are unable to access affordable housing and remain excluded. This paper draws from empirical research conducted in the city of San Francisco and focuses on the application of Land Value Capture (LVC) through increased Inclusionary Housing (IH) requirements after plan changes that increased density potential in San Francisco’s Eastern Neighbourhoods to evaluate its effects on the goals of increasing both affordable housing and social inclusion. Findings reveal that the increased inclusionary requirements used as LVC mechanism enabled 76.2% of all the affordable housing units produced in the Eastern Neighbourhoods to be produced by market-rate developers in 2011−2015 as compared to the rest of San Francisco, where 35.5% of the affordable units were produced from the market through inclusionary policy during the same period. The study demonstrates that upzoning underutilised land coupled with a well-planned LVC mechanism can help harness the strength of the real estate market and increase both affordable housing production and social inclusion.