Steven Greenhut on California's Exclusionary Affordable Housing 'Inclusionary Zones'


Dwight Burdette/

California's housing prices plummeted after the bubble burst in 2008, but now are approaching levels not seen since the market's height—especially along the Southern California coast and around San Francisco Bay. This has reignited the perennial question: What should policy makers do to promote "affordable" housing? Earlier this month, the state Supreme Court heard arguments in a Northern California case that could have statewide impact, given that it ponders the constitutionality of one way officials promote the construction of lower-cost housing. Whatever the court decides, it's unlikely to have any noticeable effect on prices. The issue, writes Steven Greenhut, is "inclusionary zoning." In exchange for allowing builders to construct houses, officials require them to set aside a percentage of the new houses that would be sold at below-market rates.