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

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  • Bernard Nzau

    (School of the Built Environment, University of Salford, Manchester M5 4WT, UK)

  • Claudia Trillo

    (School of the Built Environment, University of Salford, Manchester M5 4WT, UK)

Abstract

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.

Suggested Citation

  • Bernard Nzau & Claudia Trillo, 2019. "Harnessing the Real Estate Market for Equitable Affordable Housing Provision through Land Value Capture: Insights from San Francisco City, California," Sustainability, MDPI, vol. 11(13), pages 1-21, July.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:13:p:3649-:d:245166
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    References listed on IDEAS

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    1. Edward L. Glaeser & Joseph Gyourko, "undated". "The Impact of Zoning on Housing Affordability," Zell/Lurie Center Working Papers 395, Wharton School Samuel Zell and Robert Lurie Real Estate Center, University of Pennsylvania.
    2. Mathur, Shishir & Smith, Adam, 2013. "Land value capture to fund public transportation infrastructure: Examination of joint development projects' revenue yield and stability," Transport Policy, Elsevier, vol. 30(C), pages 327-335.
    3. Corianne Payton Scally & J. Rosie Tighe, 2015. "Democracy in Action?: NIMBY as Impediment to Equitable Affordable Housing Siting," Housing Studies, Taylor & Francis Journals, vol. 30(5), pages 749-769, July.
    4. Gabriel Metcalf, 2018. "Sand Castles before the Tide? Affordable Housing in Expensive Cities," Journal of Economic Perspectives, American Economic Association, vol. 32(1), pages 59-80, Winter.
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    Cited by:

    1. Canelas, Patricia & Noring, Luise, 2022. "Governmentalities of land value capture in urban redevelopment," Land Use Policy, Elsevier, vol. 122(C).

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