A federal judge has ruled in favor of the District in a four-year case over inclusionary zoning, a policy allowing developers to construct larger buildings than otherwise permitted in exchange for creating affordable units. The case was a touchstone of affordable housing issues in D.C.—leading some organizations to push for improvementsto the city’s IZ program.
In December 2012, real estate developer Art Linde brought the suit, via one of his companies, over a 22-unit condo building at 2910 Georgia Ave. NW near Howard University. Linde’s company for the building argued that IZ requirements prevented the developer from making an “economically viable use” of the property. In fact, the building was the first to bring IZ units onto the the District’s housing market—a total of two.
Linde’s lawyers contended that the city’s Department of Housing and Community Development could not supply the developer with any qualified buyers for the two affordable condos. The 20 other condos sold within a few months. The LLC argued that IZ amounted to an unconstitutional taking of property rights as well as a denial of due process and equal protection rights.
On Tuesday, U.S. District Court for D.C. Judge Colleen Kollar-Kotelly denied Linde’s company’s constitutional challenge to the District’s IZ program. In her ruling, Kollar-Kotelly dismissed the company’s constitutional claims while acknowledging that D.C. may have indeed “‘fumbled and bungled every aspect of the IZ Program’s implementation,'” as the developer had stated in its complaint.
“The Court does not intend to minimize Plaintiff’s [2910 Georgia Avenue LLC’s] legitimate grievances with the District’s administration of the IZ Program, or to suggest that the District acted perfectly at all times,” the judge wrote. “The Court merely concludes that at no point did the District’s conduct rise to the level of a violation of the United States Constitution.” D.C.’s IZ program was first approved in 2007 and took effect in 2009, slow to start after the recession.
City Paper has reached out to Linde and his attorneys for comment and will update this post if we hear back. Meanwhile, D.C. Attorney General Karl Racine‘s office says the ruling “is a major victory for the IZ program,” which requires that 8 to 10 percent of a new development’s residential space be set aside as affordable housing. Last year, the D.C. Zoning Commission lowered the income threshold for affordable units through IZ.
“We are committed to using all of the tools in the toolbox to protect affordable housing” via IZ and other legal means, Racine says in a statement.
Kollar-Kotelly’s opinion notes that IZ requirements did not stop the developer of 2910 Georgia Ave. NW “from earning a considerable profit from its property”—some $6 million from the sale of the market-rate units in the building, which resulted in a “20 percent return on their investments.”
Affordable housing advocates praised Kollar-Kotelly’s decision. Cheryl Cort, policy director at the Coalition for Smarter Growth, says IZ “has proven to be a reasonable program for developers and an important development to D.C.’s residents searching for more affordably priced homes.” And Claire Zippel, an analyst at the D.C. Fiscal Policy Institute, notes the District isn’t alone in enacting IZ regulations. “I am heartened but unsurprised by the court’s affirmation of inclusionary zoning, which has worked successfully with the private sector to create hundreds of affordable homes in D.C.—and hundreds of thousands of affordable homes in more than 500 jurisdictions across the country,” Zippel explains.
In January, a majority of the D.C. Council co-introduced a bill that would amend existing IZ law to reflect last year’s changes by the Zoning Commission.