As DC continues to explore ways to incentivize office-to-residential conversions and revitalize downtown, the Zoning Commission recently dismissed a pending text amendment that would have removed the exemption for inclusionary zoning (IZ) requirements in downtown zones. The decision of the Zoning Commission, with support from the Office of Planning, highlights the challenges of converting downtown office buildings to residential use and the City's concern about the economic and societal impact of empty office buildings in the downtown area.
On March 30, 2023, the Zoning Commission (ZC) voted 3–1–1 to deny the motion to set down ZC Case No. 21-23 for a public hearing and to dismiss the case without prejudice. ZC Case No. 21-23, which proposed a text amendment to apply IZ requirements to multiple downtown zones that are currently exempt from the program, was just one of four text amendments submitted by the Office of the Attorney General (OAG) in 2021 that focused on creating more affordable housing through the expansion of IZ. OAG's original petition requested that the Zoning Commission take emergency action to adopt the proposed amendment, set the petition down for a public hearing, authorize an immediate publication of the proposed rulemaking for the petition, and grant a waiver to authorize a 30-day notice period prior to the public hearing. However, OAG's request for the Zoning Commission to take emergency action was unanimously denied by the Commission in a January 2022 meeting.
During that same January 2022 meeting, the Commission requested that OAG submit an Economic Impact Analysis (EIA) and that, in response the findings therein, the Office of Planning (OP) submit a set-down report. Although no such EIA was ever submitted by OAG, OP submitted a set-down report, which was presented and discussed at last week's ZC meeting.
OP's report found that the proposed text amendment was inconsistent with the Comprehensive Plan, which generally calls for increasing housing production, citing data that suggested the proposed changes would lower land values and limit the opportunity to produce new housing. OP found further inconsistencies with the Comprehensive Plan, such as that the proposed amendment failed to provide any bonus density to offset the provision of affordable units, as the Comprehensive Plan requires such incentives, or public funding, to balance Inclusionary Zoning's affordability requirements. Additionally, OP argued that the proposed amendment could increase housing costs for existing units, making them less attainable and, as a result, would prevent the economic revitalization of downtown.
In the discussion following OP's presentation of the report's findings, all four of the Commissioners emphasized their general support and desire to create more affordable housing in the city, particularly in the downtown zones; however, they also expressed concerns that their approval to set down the case would create more uncertainty for residential developments currently in the pipeline during an already trying time for the market.
While the decision of the Zoning Commission temporarily removes uncertainty about the future of the IZ program downtown, the mayor continues to explore and advocate incentives for future downtown development and conversions. Several of these proposals, including tax abatements and expansion of the Height Act, may provide other opportunities to create new IZ units downtown in the future.
* The author would like to thank Anna Kaye, a Land Use Planner, for her assistance writing this article.