Inclusionary Zoning

There are 4 key components of an Inclusionary Zoning policy that play an important role in determining how effective the policy is in producing actual housing:

• The percentage required (these often range from 10% to 25%);
• How the percentage is broken down. For example, a jurisdiction may have a 15% Inclusionary requirement with 8% for low-income and 7% for very-low income housing. Ideally, the breakdown of the percentage should reflect the identified housing needs in the community.
• How strong the policy language is in terms of requiring developers to build the units on-site (“must build”).  Most jurisdictions offer the option for the developer to pay an in-lieu fee instead of building affordable housing on-site.  Depending on the jurisdiction, this option may be available to all developments or it may be limited to small projects or projects facing special hardships.  In-lieu fees can often be positive, allowing for the more efficient development and thus, to a greater unit of units offered at deeper levels of subsidy.  In addition, it may make some developments feasible, where a “must build” policy would be cost-prohibitive.  However, when land is scare or expensive, in-lieu fees may limit affordable housing construction to areas far away from the original development; this may led to less income diversity in the transit district and a reduction of access to transit for lower-income households. 
• The formula for setting the in-lieu fee.  Different jurisdictions have different formulas for calculating their in-lieu fees.  Some have a flat rate per unit, while others calculate a fee based on a percentage of building costs or sales prices.  Regardless of formula, however, it is important to make sure that the in-lieu fee is set at a level high enough to fund the construction of off-site units.

• Restrict off-site compliance to sites within ½ mile of transit stations. Land in the transit zone should be designated as a location where developers “must build” the inclusionary homes rather than having the option of building them on cheaper land somewhere else in the city;
• Prohibit in-lieu fees, unless the local government or affordable housing developers have site control of multiple parcels in transit zones that can utilize in-lieu fee revenues for affordable housing
• Allow developers to meet their inclusionary requirements through 100% affordable buildings, as opposed to requiring that every building feature a mix of market-rate and affordable units.  This flexibility makes it possible for market-rate developers to contract with nonprofit developers to produce and manage the affordable housing more efficiently
• Apply inclusionary requirements to condominium conversions, when other condo conversion controls are not already in place.

Jamaica Plain, Boston

In 2004, Jamaica Plain Neighborhood Council (JPNC), located in Boston, Massachusetts, unanimously passed a proposal creating inclusionary zoning in which housing developers of 10 units or more were required to make 13 percent of the units affordable to households earning between 80 percent to 120 percent of the Boston Area Median Income. However, the median income in Jamaica Plain is $39,000, which happens to be 50 percent of the Boston area median income. JPNC observed that in comparison to other cities’ inclusionary zoning programs, Boston’s requirements were fairly low. Other cities require higher percentages to be set aside for affordable housing and most require the units to be affordable to those with lower incomes. As a result, the JPNC urged the city through the Boston Redevelopment Authority to amend the Mayor’s Executive Order on affordable housing as it affects the Jamaica Plain Zoning District. It calls for all private developers of housing of 10 units or more to provide 25 percent of the units in their development as affordable to persons earning 80 percent or less of the area median income, requires all affordable housing to be constructed or reconstructed within the proposed to development and remain affordable for 50 year and accept no cash payments in lieu of providing affordable units. The JPNC mandated that developers intending to develop 10 or more units in Jamaica Plain would be required to meet with the Housing and Development Committee to present their development proposal and designating 25 percent of the units as affordable housing. Also, approval of the Housing and Development Committee would be a prerequisite for the Boston Redevelopment Authority’s recommendation of approval.

Napa County, California

As opposed to just designating a percentage of housing units to be affordable, Napa County, CA requires that all affordable units developed as a result of its inclusionary zoning ordinance be built with quality materials and with appropriate unit size and design comparability to market rate units. The ordinance requires that the affordable units are comparable in the number of bedrooms, exterior appearance and overall quality of construction to the market rate units in the same project. Each city in Napa County has the discretion to permit a reduction in square footage and interior features in the affordable units, which may be approved by staff. However, the ordinance states that approval cannot be given unless the affordable units are developed with good quality materials and are consistent with contemporary standards for new housing. Further, Napa County requires that affordable housing units be even distributed throughout the project but permits clustering (approval required) if it furthers affordable housing opportunities.

Montgomery County, Maryland

Montgomery County adopted the first inclusionary zoning ordinance in the United States in 1976. The Moderately Priced Dwelling Unit Ordinance requires developers of all mixed-use projects with 20 or more residential units to make 12.5 percent to 15 percent affordable for lower-income households in exchange for a 22 percent density bonus. This ordinance has resulted in the construction of more than 11,800 affordable units since it was enacted. For example, a garden apartment community across the street from the Glenmont Metro station in Silver Spring has been redeveloped with a mix of 1,550 apartments, condominiums, live-work units and townhomes – 12.5 percent of which are “moderately priced” workforce housing. The development includes a retail center with restaurants, a gym and services, and a landscaped central park connecting to a linear park along a nearby stream, which provides appealing public space for active and passive recreation. The development, station, surrounding neighborhoods and nearby community attractions — including a regional park — are all linked with walkways. The provision of on-street and structured parking and a pedestrian-scaled streetscape helps create a sense of place, increase pedestrian activity and transit ridership, and reduce vehicle trips.

• Jamaica Plain Neighborhood Council
• California Affordable Housing Law Project & Western Center on Law & Poverty, “Inclusionary Zoning: Policy Considerations and Best Practices”, 2002
• Inclusionary zoning
• Housing Policy.org Inclusionary zoning
• National Association of Home Builders
• Nonprofit Housing Association of Northern California (NPH) Inclusionary Housing Toolkit
• California Rural Housing Coalition Searchable Database of California Inclusionary Housing Policies.
• PolicyLink. Equitable Development Toolkit: Inclusionary Zoning.