(Courtesy of Level 2 Development)

Twelve new houses are coming to a blighted area of Northeast Washington reserved for families making up to 50 percent of the area median income, or about $54,722 for a family of four.

The 1,200-square-foot, three-bedroom residences will be on Central Place NE, a one-block street in Ivy City. Six three-story townhouses will be divided into two residences apiece.

Level 2 Development will contribute $1.4 million toward building the residences to meet a zoning requirement placed on its luxury apartment project next door. The firm is working in partnership with Habitat for Humanity, Washington, on the construction.

As inclusionary zoning regulations mandate, all developers of new projects in the District must set aside a portion of the units as affordable housing. The units are often limited to those making up to 80 percent of the area median income, which is about $60,839 for one individual and $86,912 for a family of four.

Level 2 Development also is working on another project in Northeast — the Highline at Union Market, a 315-unit apartment building at 320 Florida Ave. NE. As they were working on the Highline, developers say they began to wonder whether there was a better way to meet the requirement than to set aside affordable apartments within their building.

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“The units are, on average, 600 square feet,” said David Franco, principal at Level 2. “That’s not going to accommodate a family.”

Moreover, said Franco, the 80 percent area median income wasn’t going to meet the needs of the community.

“According to the Area Neighborhood Commission 5D commissioners, people in the neighborhood have incomes far lower than 80 percent AMI,” recalled Franco. “From our experience with The Harper [a Level 2 apartment building on 14th Street NW that opened in 2014], we got a lot of college graduates, who came with rent checks from their parents and new BMWs, applying for affordable [inclusionary zoning] units. These were upper-middle-class people.”

Lowering the limit to 50 percent AMI and expanding the units to fit a family was a way to deliver “far more meaningful affordable housing” than the policy mandated, said Franco.  Franco said he was pleased to find a need within Ivy City, which is in the same area as the Highline.

“Not only are we impacting the Union Market district,” said Franco, “we are reaching into our next door neighborhood community, which is blighted, and lending a hand.”

Level 2 officials say they also plan to hold 13 apartment units within the Highline for people making up to 80 percent AMI to complete their inclusionary zoning obligation.

The idea came about after extensive talks between Level 2 Development, ANC 5D, and the Office of Planning. The Zoning Commission approved the overall planned unit development for the project last month.

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“This was a very inventive way to deal with inclusionary zoning, “said Jennifer Steingasser, deputy director of D.C.’s Office of Planning. “This was the first PUD to take this approach, and it should result in a whole different type of homeownership opportunities [with larger houses rather than small apartments]. These sorts of creative solutions are hard to legislate, but the PUD process, which involves direct negotiation with the Zoning Commission, is a good vehicle for them.”

That said, the inclusionary zoning regulations are up for revision. The Zoning Commission plans to hold a public hearing  Nov. 19, Steingasser said, to assess the policy’s efficacy so far.

Level 2 is finalizing plans for the residences and will seek approvals on the specific design from the Board of Zoning Adjustment in the next few months. Once permits are in, Franco hopes to begin construction in June of 2016.

Shilpi Malinowski is a freelance writer.