Cornerstone’s beta Inclusionary Calculator has been getting a lot of press!1 We are thrilled the tool is gaining visibility and, more importantly, that it is being used in policy conversations. We’d like to put our own Cornerstone perspective into the mix and also clear up any misperceptions. So, here it is, straight from the Horse’s mouth:
- The intention of the Calculator is to help users to understand the interplay between Inclusionary Housing requirements and real-estate financial feasibility. We hope that by making it publicly accessible we have created an opportunity for more community members to have informed discussions about the realistic possibilities for Inclusionary Housing in their city. It won’t make everyone an instant expert on real estate economics, but it cracks open up the black box surrounding whether development will “pencil” when affordable housing units are included onsite.
- Although Cornerstone promotes Inclusionary Housing as a policy tool that is useful in many – but not all – circumstances, we have worked to make sure that the tool is objective and accurate. We do not intend it as a tool for advocates alone, but one that can be trusted by developers, policy makers, and advocates alike. We contracted with professional real estate economists to develop the tool and piloted it with experts in the field to ensure that back-end calculations and baseline assumptions of the Calculator are consistent with industry standards. Sometimes the Calculator shows that inclusionary housing requirements could feasibly be accommodated within a project, sometimes it will show just the opposite.
- The Calculator’s results are only as good as your inputs. If you, the user, enters incorrect information about land costs, rental rates, or more obscure variables like the local capitalization rate, then the Calculator’s results will not reflect local development conditions. The Calculator is particularly sensitive to the Cap Rate, Construction Cost, and Rental/ Sales price assumptions, so try to get those right. The importance and difficulty of getting your input assumptions right is one of the reasons that the Calculator cannot substitute for professional real-estate analysis by an experienced consultant. That said, we believe that the Calculator will get a careful user in the ballpark of what affordable housing requirements might be possible.
The Calculator is a work in progress, and we welcome your feedback. This launch of the beta Calculator was the culmination of almost two years of work to develop, vet, test, and pilot the Calculator. But, the Calculator needs the helping hands of thoughtful users like you. Please let us know what you think by using the calculator and writing to us in the comments!
1 Read more on what others are saying about the Inclusionary Calculator:
Leveling the Information Playing Field Between Advocates and Developers by Miriam Exel-Lute, Rooflines.
A Rational Way to Weigh Affordable Housing, Not that We Want to be Rational by Jim Schutze, Dallas Observer.
Affordable Housing is a Moral Choice (and the Numbers Prove It) by Kriston Capps, CityLab.