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VerbalReading Comprehension

Free GMAT Reading Comprehension Practice Question

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When a city adopts inclusionary zoning, it requires developers of new market-rate housing to set aside a fraction of units, often 10 to 20%, for households below a defined income threshold. Advocates credit such mandates with the below-market units they directly create, and on that measure the policy succeeds: in cities that adopt it, the count of newly built affordable units rises. Because the requirement attaches to construction that would have occurred anyway, supporters describe it as affordability secured at no cost to the public budget.

The economist Hargrove argues that this accounting flatters the policy by ignoring its effect on the total housing supply. A set-aside functions as a tax on each project, since the developer recovers the loss on below-market units by raising rents on the remainder or, where that is not possible, by building less or not at all. Comparing fourteen metropolitan areas, Hargrove found that the cities imposing the steepest set-asides issued markedly fewer building permits per capita over the following decade than otherwise similar cities without mandates. On this reading, the policy does not enlarge the stock of housing so much as redistribute access to it, transferring affordability to the households who win the unit lottery while leaving marginal renters, who never reach that lottery, facing tighter and costlier markets.

Hargrove is careful not to overstate the case. The permit gap he documents could reflect differences in land availability or local demand that his fourteen-city sample does not fully separate from the mandates themselves, and he concedes that modest set-asides in high-demand cities may suppress little construction. His claim is therefore the narrower one that inclusionary zoning should be judged by its effect on the whole market, not by the affordable units it visibly produces. Whether that effect is large enough to outweigh the policy's direct benefits, he leaves to the evidence each city can gather.

The passage provides support for each of the following statements about inclusionary zoning or Hargrove's analysis of it EXCEPT:

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Answer & Explanation

Correct answer

C

This is an except-support question: four choices are statements the passage supports, and the credited answer is the one statement it does not support.

Choice (C) is credited because the passage deliberately narrows Hargrove's position instead of turning it into a policy recommendation. It says his claim is "the narrower one that inclusionary zoning should be judged by its effect on the whole market, not by the affordable units it visibly produces," and adds that "whether that effect is large enough to outweigh the policy's direct benefits, he leaves to the evidence each city can gather." A claim about how to judge the policy, paired with an explicit refusal to settle the cost-benefit question, is not a recommendation to abandon the policy. Choice (C) inflates a methodological, deliberately open-ended position into a concrete policy prescription, so it is the one statement the passage does not support.

Each other choice is directly supported. (A): the passage states that supporters describe the policy as "affordability secured at no cost to the public budget," which supports the no-public-spending description regardless of Hargrove's later objection. (B): the passage states that "in cities that adopt it, the count of newly built affordable units rises," which directly supports the increase in newly built affordable units. (D): the passage states that "the developer recovers the loss on below-market units by raising rents on the remainder," which supports the higher-rents mechanism, and the choice's hedge "may" matches the passage's conditional framing. (E): the passage states that "the permit gap he documents could reflect differences in land availability or local demand that his fourteen-city sample does not fully separate from the mandates," which supports Hargrove's acknowledgment of alternative explanations.

Choice (C) combines two failure modes: it overstates the scope of Hargrove's conclusion, turning a narrowed evaluative claim into a prescription, and it ignores the passage's hedge that he leaves the cost-benefit question to the evidence, treating an open question as a settled verdict.