Inclusionary Housing, also known as Inclusionary Zoning, calls for a portion of housing units in residential projects to be available for low- and moderate-income households. Many programs provide developers with “cost offsets” or incentives, such as density bonuses, zoning or design flexibility, parking reductions, fee waivers, or an expedited review process for providing these affordable units. IHI believes that cost offsets are a critical element in successful programs. The term inclusionary is used as a counterpoint to exclusionary practices of all types that effectively prevent affordable housing from being available to people who live or work in that community
Inclusionary Housing programs are based on a variety of legal frameworks and can be mandatory or voluntary. Affordable units can be provided on-site as part of a mixed-income project or at another location. In some cases, financial contributions in lieu of units can be made to affordable housing funds.
Since the 1970s, more than 300 local governments and numerous states have adopted inclusionary housing programs resulting in the production and preservation of hundreds of thousands of affordable homes and apartments. Adaptable to local conditions, Inclusionary Housing tools have been successfully used in states such as California, Colorado, Illinois, North Carolina, Maryland, Virginia, New Jersey, and Massachusetts. Santa Fe, New Mexico, and Burlington, Vermont, are among cities that have adopted Inclusionary Housingstrategies.
The success of Inclusionary Housing programs results from private residential activity, so the tool works best in locations with strong real estate markets with active development of market rate housing.