Inclusionary zoning & housing policies

Evidence Rating  
Evidence rating: Some Evidence

Strategies with this rating are likely to work, but further research is needed to confirm effects. These strategies have been tested more than once and results trend positive overall.

Disparity Rating  
Disparity rating: Potential to decrease disparities

Strategies with this rating have the potential to decrease or eliminate disparities between subgroups. Rating is suggested by evidence, expert opinion or strategy design.

Health Factors  
Date last updated

Inclusionary zoning (IZ) and housing policies require developers to reserve a proportion of housing units for residents with low incomes, often with restrictions on resales that specify purchase by households with low or moderate incomes. Inclusionary zoning and housing policies may be based on mandatory requirements or development incentives, such as expedited permits and approvals, relaxed design standards, fee waivers or reductions, or density bonuses (i.e., permits for larger buildings when affordable units are included on-site). Density bonuses help developers recover the costs of affordable units by including a greater number of market rate units1. Units created via IZ are available to homeowners and renters and are typically part of multifamily developments2.

What could this strategy improve?

Expected Benefits

Our evidence rating is based on the likelihood of achieving these outcomes:

  • Increased access to affordable housing

  • Increased access to quality housing

Potential Benefits

Our evidence rating is not based on these outcomes, but these benefits may also be possible:

  • Increased neighborhood socio-economic diversity

  • Increased asset accumulation

What does the research say about effectiveness?

There is some evidence that inclusionary zoning (IZ) and housing policies increase access to and production of quality, affordable housing for households with low and moderate incomes, especially in urban areas with strong housing demand3, 4, 5, 6. Available evidence from case studies and IZ policy analysis suggests such policies may increase the supply of quality, affordable housing available to rent and to purchase for households with low and moderate incomes7, 8, 9, 10, 11, and ensure long-term affordability of housing stock7, 8, 9, 12. The effects of IZ policies vary significantly depending on policy design and local context13. Additional evidence is needed to confirm effects2, 3, 14, 15.

The amount of affordable housing produced by IZ policies varies with how long the policy has been in place16, whether it offers density bonuses or other incentives, and the types of projects eligible for consideration3, 7. IZ policy design features such as long-term affordability requirements influence the magnitude of the effect IZ policies can have on the supply of affordable housing and the reduction of concentrated poverty12. Some IZ policies may include homes for purchase, offering families with lower incomes the opportunity to build wealth through homeownership8, 14.

IZ policies appear most effective when they include incentives for developer participation5, 6, 10 and when implemented as part of a multi-component affordable housing strategy3. Mandatory IZ policies are more effective than voluntary policies3, 17; however, most states with mandatory policies lack the tools to support policy enforcement (i.e., ensure units are rented or sold to eligible households)18. National data suggests the most productive IZ policies focus on households with very low incomes, provide developer incentives, are managed by third parties, require units to remain affordable for 50 years or more, and have a tracking system for affordable units7. Though most IZ policies do not generate affordable housing units for households with the lowest incomes, developers usually construct units that are affordable for residents with moderate incomes to increase the return on their investment1. Some IZ policies may allow developers to pay in-lieu fees rather than building on-site affordable housing; the funds can then be used to construct or rehabilitate affordable housing elsewhere, or for other city-supported housing assistance programs19, 20.

Overall, IZ policies do not appear to change the number of housing projects started21, 22. Though, in larger cities with high cost housing markets such as Boston, San Francisco, and New York City, IZ policies may be associated with increased housing costs and lower production14, 23. A study in the Baltimore-Washington, D.C. region found increased housing prices without decreased housing production under mandatory inclusionary zoning policies. In that study, voluntary IZ policies did not increase either affordable housing supply or housing prices13.

Cities with IZ policies appear to have a larger proportion of multifamily housing units, higher prices for single family units, and smaller single family houses than cities without IZ policies3, 21. IZ policies may minimize adverse effects of gentrification4, 22, 24, such as displacement of families with low incomes25. IZ policies that provide incentives for developers to include public spaces in their plans (e.g., plazas or walkways) may increase access to privately owned public space and increase mixed-use development26. IZ policies that help families with low and moderate incomes move to affordable units in low poverty neighborhoods may increase their access to employment, public services, recreation centers, and some forms of transportation27. Residents of cities with IZ policies may experience less frequent physical and mental distress along with lower rates of poverty and unemployment compared to cities without IZ policies28.

To retain affordable housing units over time, IZ policies restrict resale amounts which, in turn, limits tax revenue potential18 and sale proceeds for those units29, 30. Additional evidence is needed to determine the effect of IZ policies on the cost of residential development overall6.

How could this strategy advance health equity? This strategy is rated potential to decrease disparities: suggested by expert opinion.

Inclusionary zoning (IZ) and housing policies have the potential to decrease disparities in access to affordable, quality housing options between households with lower incomes and those with high incomes. IZ is generally used in wealthier, and often gentrifying, areas that are attractive to private development. As a result, IZ may increase affordable housing options for families with middle or moderate incomes either to rent or purchase but remain out of reach for families with lower incomes1, 2. Some experts suggest IZ policies can be designed to increase age, racial, and socio-economic diversity in neighborhoods and maintain affordable rents and purchase prices for residents in essential service professions such as teaching, firefighting, nursing, and law enforcement1, 27.

Neighborhoods with IZ units appear to be more racially and socio-economically diverse than neighborhoods without IZ homes2, 14, 28. IZ has the potential to reduce residential segregation and increase social mixing when IZ policies require affordable units to be located at the same location as market rate units1. Residential segregation increases racial disparities in housing stability, homeownership, and property values49. IZ policies that support homeownership may help reduce the racial wealth divide, since a significant part of the racial wealth divide at all income levels relates to lower homeownership rates and lower home values for people of color49, 50, 51.

What is the relevant historical background?

Discriminatory housing, lending, and exclusionary zoning policies in the era of Jim Crow and government-sanctioned segregation led to the redlining practices of the Federal Housing Administration (FHA) and concentrated poverty. The FHA was established in 1934, based on the premise that racial segregation protected property values for white neighborhoods. The FHA’s redlining policies entrenched racial residential segregation by denying people of color access to government-insured mortgages and labeling homes in neighborhoods where people of color lived as uninsurable, thereby guaranteeing that property values in those neighborhoods would be less than those in white neighborhoods51. The Fair Housing Act of 1968 was passed to reduce housing discrimination, but it has not stopped housing discrimination against people of color or helped rebuild the marginalized neighborhoods created by residential segregation52.

With housing prices on the rise, inclusionary zoning (IZ) began in the 1970s as an experimental housing policy which would allow state and local governments to allocate federal funding according to their housing needs53. Massachusetts was one of the first states to develop an IZ program in 1969. This was followed in 1973 by Montgomery County, Maryland’s program, which remains one of the most successful in the country. Montgomery County’s public housing authority purchases 33% of affordable units directly from developers participating in the IZ program to subsidize rent for residents with low and very low incomes. Their IZ program also offers below-market interest financing for households with low and moderate incomes so they may purchase affordable units53.

In 1975, California passed legislation requiring IZ policies at the local level to support affordable housing; however, this did not have an impact until the 1990s when a dramatic increase in home prices spurred action by local governments. By 2007, approximately one-third of communities in the state had active IZ programs, especially those with the most expensive housing markets53.

Yet, even with early successes, the popularity of IZ policies varies across the country. Wealthier cities and counties in the Northeast and West are more likely to use IZ as a way to include affordable housing in new housing developments than communities in the Midwest or South. IZ policies also appear to be more common in communities with greater population density and more residents of color2, 28.

Equity Considerations
  • How do your local agencies track affordable units created by inclusionary zoning (IZ)? How does the tracking system ensure that the greatest benefits are experienced by residents, rather than developers?
  • How can your IZ policy be tailored, through on-site requirements, minimum size requirements, rental price restrictions, etc., to meet affordable housing needs of households with very low incomes in your community? If your community is preempted by the state from implementing local IZ policies, how can community members be mobilized to share potential benefits of IZ with state policymakers?
  • What protections are in place to make sure money collected through in-lieu fees, opt-outs, or buy-out provisions is used to support affordable housing? If your local IZ policy allows developers to build off-site affordable units, how can policymakers ensure units are constructed in areas of opportunity with strict affordability rules?
  • What partnerships might IZ policymakers and developers create to connect essential service providers such as first responders, police officers, firefighters, or teachers with opportunities for affordable housing created by IZ in the communities they serve?
Implementation Examples

There are hundreds of inclusionary zoning (IZ) and housing policies across the U.S.; most policies are in New Jersey, Massachusetts, and California31. As of 2022, national data reports that 70% of IZ policies are mandatory, with most requiring units to maintain affordability for at least 30 years7. New Jersey, Maryland, and Oregon have state mandated policies and Massachusetts has both a mandatory and a voluntary, incentive-based policy18.

Many cities have mandatory local IZ policies, including Boston, MA; San Diego and San Francisco, CA; and Washington, D.C.,32, 33, 34, 35. Other examples include Boulder, CO; Cambridge, MA; Irvine, CA; Santa Fe, NM; and Stamford, CT19. Chicago, along with its suburbs of Evanston, Highland Park, and Lake Forest, has a policy that allows developers to pay an in-lieu fee rather than build affordable housing. Revenue is then added to the City of Chicago Affordable Housing Opportunity Fund to build or rehabilitate affordable housing, or to the city supported rental assistance program19, 20. In 2018, Atlanta established an IZ policy designed to increase affordable housing for teachers, police officers, and firefighters in new developments, offering access to neighborhoods with better opportunities for education, employment, green space, and more. As of 2021, the policy had created 362 affordable units. In certain areas, participation is mandatory, though developers may pay in-lieu fees instead of building on-site affordable units27. Local governments should make sure that in-lieu fees are high enough to support affordable housing goals for their community in both the current market and political context before offering developers an opt-out for building on-site affordable units36.

Inclusionary zoning is also used throughout all five boroughs of New York City; the number of affordable units varies by targeted income, location, and if the affordable units must be in the same building as the market rate units or if they may be constructed off-site37. Burlington, VT has a mandatory policy, which is administered by the Champlain Housing Trust, a community land trust38, 39.

As of 2021, Arizona, Indiana, Kansas, Tennessee, Texas, and Wisconsin passed preemption laws restricting the use of mandatory inclusionary zoning40, even though housing affordability issues are being exacerbated by the COVID-19 pandemic and expiring eviction moratoriums41. In North Carolina, cities and counties may only create regulations that clearly follow the state’s constitution, which does not currently support IZ policies; however, the cities of Davidson, Chapel Hill, and Manteo have used their authority over general zoning policies to establish local IZ policies. Supporters of IZ in North Carolina have called for an amendment to the state constitution in favor of IZ and other efforts to increase affordable housing and reduce evictions42, 43, 44.

The Housing Solutions Collaborative is building a team to promote housing equity in Oakland, CA and is considering a voluntary inclusionary zoning policy as a part of their innovative, multi-component initiative to support affordable housing needs45.

Inclusionary zoning policies can also be a part of transit-oriented development (TOD). TOD, like IZ, uses developer incentives such as density bonuses and expedited permits, to increase affordable housing options, specifically near public transportation. In Los Angeles, the passing of Measure JJJ by voter approval in 2016 created a Transit Oriented Communities Incentive Program which, through density bonuses, has slowly created additional affordable housing near bus and train stations46, 47, 48.

Implementation Resources

Resources with a focus on equity.

IHI - Innovative Housing Institute (IHI). Resources. Baltimore, MD.

LISC-Affordable housing - Local Initiatives Support Corporation (LISC). Helping neighbors build communities: Affordable housing.

LHS - Local Housing Solutions (LHS). To enhance local affordability and foster inclusive communities. New York University, Furman Center and Abt Associates, Inc.

Furman Center-Land use - Furman Center for Real Estate and Urban Policy. Research area: Land use. New York University, Furman Center.

Furman Center-Affordable housing - Furman Center for Real Estate and Urban Policy. Research area: Affordable & subsidized housing. New York University, Furman Center.

AIC-IZ - All-In Cities, an Initiative of PolicyLink. All-In Cities Policy Toolkit: Inclusionary zoning (IZ).

City of Atlanta-IZ report 2021 - City of Atlanta, GA. Office of Housing & Community Development, Department of City Planning. Inclusionary zoning report. January 2021.

LawAtlas-IZ - LawAtlas. Local inclusionary zoning laws.


* Journal subscription may be required for access.

1 Urban-Stacy 2021 - Stacy CP, Morales-Burnett J, Noble E, Hodge T, Komarek T. Inclusionary zoning: How different IZ policies affect tenant, landlord, and developer behaviors. Washington, D.C.: Urban Institute; 2021.

2 Urban-Spauster 2021 - Spauster P, Lo L, Freemark Y. The rise of market-reliant affordable housing tools: Findings from the National Longitudinal Land Use Survey. Washington, D.C.: Urban Institute; 2021.

3 Mukhija 2015 - Mukhija V, Das A, Regus L, Tsay SS. The tradeoffs of inclusionary zoning: What do we know and what do we need to know? Planning Practice & Research. 2015;30(2):222-235.

4 US HUD-Levy 2012 - Levy DK, Franks K, Bertumen K, et al. Expanding housing opportunities through inclusionary zoning: Lessons from two counties. Washington, D.C.: U.S. Department of Housing and Urban Development (HUD), Office of Policy Development and Research and Urban Institute; 2012.

5 Mukhija 2010 - Mukhija V, Regus L, Slovin S, Das A. Can inclusionary zoning be an effective and efficient housing policy? Evidence from Los Angeles and Orange counties. Journal of Urban Affairs. 2010;32(2):229-52.

6 Read 2009 - Read DC. The structure and potential economic effects of inclusionary zoning ordinances. Real Estate Issues. 2009;34(2):1–9.

7 Wang 2022 - Wang R, Fu X. Examining the effects of policy design on affordable unit production under inclusionary zoning policies. Journal of the American Planning Association. 2022;88(4):550-564.

8 Dawkins 2017 - Dawkins C, Jeon JS, Knaap GJ. Creating and preserving affordable homeownership opportunities: Does inclusionary zoning make sense? Journal of Planning Education and Research. 2017;37(4):444-456.

9 Thaden 2017 - Thaden E, Wang R. Inclusionary housing in the United States: Prevalence, impact, and practices. Cambridge, MA: Lincoln Institute of Land Policy; 2017.

10 Schuetz 2009 - Schuetz J, Meltzer R, Been V. 31 Flavors of inclusionary zoning: Comparing policies from San Francisco, Washington, D.C., and suburban Boston. Journal of the American Planning Association. 2009;75(4):441-56.

11 Brookings-Brown 2001 - Brown, KD. Expanding affordable housing through inclusionary zoning: Lessons from the Washington metropolitan area. Washington, D.C.: Brookings Institution; 2001: Discussion Paper.

12 RAND-Schwartz 2012 - Schwartz HL, Ecola L, Leuschner KJ, Kofner A. Is inclusionary zoning inclusionary? A guide for practitioners. Santa Monica: RAND Corporation; 2012: Technical Report 1231.

13 Hamilton 2021 - Hamilton E. Inclusionary zoning and housing market outcomes. Cityscape. 2021;23(1):161-194.

14 Urban-Ramakrishnan 2019 - Ramakrishnan K, Treskon M, Greene S. Inclusionary zoning: What does the research tell us about the effectiveness of local action?. Washington, D.C.: Urban Institute; 2019.

15 Sturtevant 2016 - Sturtevant L. Separating fact from fiction to design effective inclusionary housing programs. Inclusionary housing: A series of research & policy briefs. Washington, D.C.: National Housing Conference and Center for Housing Policy; 2016.

16 Schuetz 2011 - Schuetz J, Meltzer R, Been V. Silver bullet or trojan horse? The effects of inclusionary zoning on local housing markets in the United States. Urban Studies. 2010;48(2):297-329.

17 von Hoffman 2006 - von Hoffman A, Belsky ES, Lee K. The impact of housing on community: A review of scholarly theories and empirical research. Cambridge: Joint Center for Housing Studies (JCHS), Harvard University; 2006:W06–1

18 Karki 2015 - Karki TK. Mandatory versus incentive-based state zoning reform policies for affordable housing in the United States: A comparative assessment. Housing Policy Debate. 2015;25(2):234-262.

19 LawAtlas-IZ - LawAtlas. Local inclusionary zoning laws.

20 US HUD-Evidence matters IZ 2013 - U.S. Department of Housing and Urban Development (HUD). Evidence Matters: Inclusionary zoning (IZ) and mixed-income communities. 2013.

21 Bento 2009 - Bento A, Lowe S, Knapp GJ, Chakraborty A. Housing market effects of inclusionary zoning. Cityscape: A Journal of Policy Development and Research. 2009;11(2):7-26.

22 SCANPH 2005 - Southern California Association of Non-Profit Housing (SCANPH). How does inclusionary housing work? A profile of seven southern California cities. Los Angeles: Southern California Association of Non-Profit Housing (SCANPH); 2005.

23 Furman Center-Madar 2015 - Madar J. Creating affordable housing out of thin air: The economics of mandatory inclusionary zoning in New York City. Housing for an inclusive New York: Affordable housing strategies for a high-cost city. New York University, Furman Center; 2015.

24 CDC-Gentrification - Centers for Disease Control and Prevention (CDC). Health effects of gentrification.

25 Damewood 2011 - Damewood R, Young-Laing B. Strategies to prevent displacement of residents and businesses in Pittsburgh's Hill District. September 2011.

26 Yoon 2015 - Yoon H, Srinivasan S. Are they well situated? Spatial analysis of privately owned public space, Manhattan, New York City. Urban Affairs Review. 2015;51(3):358-380.

27 City of Atlanta-IZ report 2021 - City of Atlanta, GA. Office of Housing & Community Development, Department of City Planning. Inclusionary zoning report. January 2021.

28 Jones 2022 - Jones A, Squires GD, Crump S. The relationship between inclusionary zoning policies and population health. Housing and Society. 2022;49(1):38-57.

29 Gibbons 2015 - Gibbons LK. Considering the cost of inclusionary zoning and resale restrictions in the District of Columbia. Policy Perspectives. 2015;22:1-8.

30 Dulchin 2013 - Dulchin B, Gates M, Williams B. Housing policy for a strong and equitable city. Toward a 21st Century City for All. Center for Urban Research, The Graduate Center at City University of New York; 2013.

31 AIC-IZ - All-In Cities, an Initiative of PolicyLink. All-In Cities Policy Toolkit: Inclusionary zoning (IZ).

32 Boston-IZ - City of Boston. Inclusionary development policy: 2019 update.

33 San Diego-IZ - City of San Diego. Inclusionary housing.

34 San Francisco-IZ - San Francisco Planning. Inclusionary affordable housing program.

35 DC DHCD-IZ - Washington, D.C., Department of Housing and Community Development (DC DHCD). Inclusionary zoning (IZ) affordable housing program.

36 Urban-Shroyer 2020 - Shroyer A. Determining in-lieu fees in inclusionary zoning policies: Considerations for local governments. Washington, D.C.: Urban Institute; 2020.

37 Furman Center-NYC housing - Furman Center for Real Estate and Urban Policy. State of New York City’s subsidized housing in 2017. New York University, Furman Center; 2018.

38 Burlington-IZ - City of Burlington, VT. Inclusionary Zoning (IZ) program.

39 CHT-VT - Champlain Housing Trust (CHT). Northwestern Vermont-based community land trust (CLT).

40 LawAtlas-State preemption - LawAtlas. State preemption laws in 12 domains.

41 Urban-Greene 2020 - Greene S, Ramakrishnan K, Morales-Burnett J. State preemption of local housing protections: Lessons from a pandemic. Washington, D.C.: Urban Institute; 2020.

42 Skahen 2021 - Skahen RK. Opportunity in a pandemic: Ending the eviction cycle by constitutionally providing for inclusionary zoning with state-enacted land-use regulations. Campbell Law Review. 2021;43(3):375-402.

43 Chapel Hill-IZ - Town of Chapel Hill, North Carolina. Inclusionary housing program.

44 Davidson-IZ - Town of Davidson, North Carolina. Affordable housing (also known as inclusionary housing).

45 ChangeLab-Glass 2022 - Glass P, Ansong T. Inclusionary zoning & housing for residents with disabilities: A housing solutions collaborative update. ChangeLab Solutions. Oakland County, Michigan; 2022.

46 AHLA-Vosburgh 2022 - Vosburgh T. Have TOC and Expo TNP resulted in housing growth near Westside rail stations? Part II. Los Angeles, CA: Abundant Housing Los Angeles (AHLA). 2022.

47 Los Angeles-TOC - City of Los Angeles. Los Angeles City Planning. Transit Oriented Communities (TOC) Incentive Program.

48 Zhu 2021 - Zhu L, Burinsky E, De la Roca J, Green RK, Boarnet MG. Los Angeles’ housing crisis and local planning responses. Cityscape. 2021;23(1):133-160.

49 PRRAC-Haberle 2021 - Haberle M, House S, eds. Racial justice in housing finance: A series on new directions. Washington, D.C.: Poverty & Race Research Action Council (PRRAC); 2021.

50 Urban-McCargo 2020 - McCargo A, Choi JH. Closing the gaps: Building black wealth through homeownership. Washington, D.C.: Urban Institute; 2020.

51 Kaplan 2007 - Kaplan J, Valls A. Housing discrimination as a basis for Black reparations. Public Affairs Quarterly. 2007;21(3):255-273.

52 Urban-Reynolds 2021 - Reynolds K, Lo L, Boshart A, Galvez MM. Federal reforms to strengthen housing stability, affordability, and choice. Washington, D.C.: Urban Institute; 2021.

53 Zhang 2019 - Zhang T. Making inclusionary zoning more inclusive: How D.C. should reform its inclusionary zoning policy to account for income, racial, and geographic segregation. Georgetown Journal on Poverty Law and Policy. 2019;27(1):171-195.