Inclusionary housing is a housing policy approach in which creators of new housing are encouraged or required to offer a certain share of housing to be made affordable by people with low to moderate incomes; or alternately to pay 'in-lieu fees' to support such housing.
Inclusionary housing policies are sometimes referred to as “inclusionary zoning” (IZ) because this type of requirement may be implemented through an area’s zoning code; however, many programs impose similar requirements outside the zoning code. (Jacobus 2015).
The usage 'inclusionary' implicitly contrasts with so-called exclusionary zoning practices, which aimed or aim to exclude particular demographic groups or low-cost housing from a municipality through the zoning code.
There are variations among different inclusionary zoning programs. Firstly, they can be mandatory (e.g. MIZ, Mandatory Inclusionary Zoning, in Seattle) or voluntary. There are also variations among the set-aside requirements, affordability levels coupled with the period of control. In order to encourage engagements in these zoning programs, developers are awarded with incentives for engaging in these programs, such as density bonus, expedited approval and fee waivers.
Boston's Inclusionary Development Policy, introduced in 2000, requires any residential development that includes ten or more units and that receives financing from the city, is on city property, or needs an exception to current zoning regulations to designate fifteen percent of its market rate units as affordable housing (Zhorov 2016). Rather than adhering to these base stipulations, developers have the option, in some cases,make a monetary contribution for as much as $380,000 per unit (depending on where the proposed development is located) to a fund for affordable housing or to build affordable housing units off-site at an increased ratio (up to 18 percent of the total) (Zhorov 2016).
Boston's inclusionary strategy is aimed at providing affordable housing for middle-income earners in attractive areas of the city from which they would otherwise be shut out (Zhorov 2016). The plan reserves housing spots for residents making up to 100 percent of the Area Median Income (AMI) as well as a certain number of units for people making 70 percent or less of the AMI (Zhorov 2016).
Inclusionary zoning requirements are currently illegal in Denver, per Town of Telluride vs. Lot Thirty-Four Venture (2000), which classified inclusionary zoning as a form of rent regulation (which is illegal statewide).
This does not prohibit the city from providing developers voluntary incentives for including affordable properties, such as height bonuses.
New York City
New York City Council approved a mandatory inclusionary housing program in 2016. The approved measures were designed to take into account a situation in which the City's population had grown by one million people since 1990, along with steadily rising housing costs and large numbers of residents on waiting and lottery lists for public housing and private affordable units (New York City Council 2016). Unlike Boston's strategy, New York's inclusionary housing scheme specifically targets lower income residents with a Deep Affordability Option that requires higher percentages of building floor areas to be set aside for residents making an average of 40 percent of the AMI (New York City Department of City Planning 2016) (New York City Council 2016). "The Department of City Planning and the Department of Housing Preservation and Development have stated that the central goals of the proposal are to create more economically diverse communities across New York City and to ensure that a share of new housing in growing communities is affordable" (New York City Council 2016). The policy is applied to areas rezoned to allow the construction of more residences than currently allowed (New York City Council 2016). Areas under consideration at this writing include "East New York in Brooklyn; Inwood and East Harlem in Manhattan; Flushing West and Long Island City in Queens; the Jerome Avenue corridor in the Bronx; and Bay Street in Staten Island" (New York City Council 2016). In addition to the program being applied to areas of rezoning, it would also apply to private rezoning applications that involve an increase in density (e.g. in a situation where a developer was applying to build a residential structure with more units than currently allowed) (New York City Council 2016).
In its 2016 Legislative Session the State of Oregon lifted its preemption on inclusionary zoning. In response, the City of Portland has initiated an Inclusionary Housing program for the city, under the direction of the Portland Housing Bureau. Oregon and Texas were the two states in the nation that did not allow for the use of inclusionary zoning.
Rogers, Jules. "Where is PDX's Inclusionary Housing?" [Portland] Business Tribute, 16 May 2017. http://pamplinmedia.com/but/239-news/358959-238386-where-is-pdxs-inclusionary-housing.
"The Inclusionary Housing Zoning Code Project is a collaborative effort between the Bureau of Planning and Sustainability and the Portland Housing Bureau to meet the need for affordable housing in the city. With the adoption of SB 1533 in February 2016, the City of Portland has taken new measures to address the affordable housing shortage and created an Inclusionary Housing Program. The new program mandates the provision of affordable housing units in new multi-dwelling residential development through policies and regulations.
The Zoning Code amendments include:
- A new chapter in Title 33 (33.245) to require that all development projects with 20 or more dwelling units in one building participate in the Inclusionary Housing Program. The new code sets the percent or share of units in a development that must be affordable at different income levels to meet the terms of the program, called the “inclusion rate”, depending on if the units are provided on-site or off-site.
- Amendments to base zones and plan districts subject to the Inclusionary Housing Program requirements to create bonuses for floor area and density.
- Amendments to minimum parking standards for residential development to comply with the Inclusionary Housing Program close to transit and affordable housing units elsewhere in the city.
"The other parts of the Inclusionary Housing Program will be implemented through amendments to Title 30, the Housing Code. These provisions include the incentive packages offered to offset the costs to development and a fee schedule for the in-lieu fee option.
San Francisco 
Catalano, Tujia, & Chloe Angelis. "SF Inclusionary Affordable Housing Legislation Nearing Conclusion and Final Vote." Reuben, Junius & Rose, LLP article. June 23, 2017. http://www.reubenlaw.com/sf-inclusionary-affordable-housing-legislation-nearing-conclusion-final-vote/.
San Francisco Office of the Controller. "Inclusionary Housing Working Group: Preliminary Report." September 2016.
Mark Vallianatos notes: "the SF prop C inclusionary study showed annual benefits of $44 million in BMR units, annual increased housing costs of $1.8 billion."
- Proposal from Supervisors Safai, Breed, Tang: Inclusionary Affordable Housing Fee and Dwelling Unit Mix Requirements. (April 2017).
- Proposal from Supervisors Kim, Peskin: Inclusionary Affordable Housing Fee and Requirements (April 2017). https://sfgov.legistar.com/LegislationDetail.aspx?ID=2909828&GUID=BB4FBE55-FF04-442F-A446-832E61E18CB8&Options=Advanced&Search=.
- YIMBY Action Stance on SF Inclusionary Housing Ordinances (April 10, 2017). https://yimbyaction.org/inclusionaryproposals/.
Inclusionary Forum project idea
Tim McCormick @tmccormick 2:03 PM - 7 Feb 2018
Replying to @tmccormick @danbertolet and 4 others
"here's a project idea: given that IZ is a front-burner issue in PDX+SEA, and to varying degrees many other places, how might we build & fund a model forum (perhaps online + events) to explore issues & guide policy in the most constructive way possible? #InclusionaryForum ?"
Tim McCormick @tmccormick 2:08 PM - 7 Feb 2018
Replying to @tmccormick @danbertolet and 4 others
e.g. consider a range of players who care a lot about IZ (mayors, planning depts, builders, housing orgs, tenant orgs, foundations, etc), pitch them that it'd be well worth X tiny % of that value to chip in for and join in on a really well-run #InclusionaryForum to guide path fwd"
That inclusionary zoning alone ...
- Is an inadequate measure to meet the need (especially for low-income residents) for affordable housing, since it is a mixed model (usually accounting for the creation of many more market rent units than those designated as affordable)
- Provides a "Bandaid solution" to deeper systemic problems
- Fuels gentrification and pushes up land values and housing costs in the areas in which it is implemented
- Where it drives up pricing inclusionary zoning may result in restricting housing supply
- May incentivize the destruction of existing (e.g. rent-controlled) affordable housing
"The bigger concern about inclusionary zoning is that it tends to drive up the cost of building new housing, thereby restricting supply, and actually aggravating market-wide affordability problems. While the comparative handful of new units set aside for low or moderate income households are visible, there is an invisible cost in the form of units not built, and consequently, higher market rents for everyone. "
- Economist, Joe Cortright (editor/founder of City Observatory).
"Portland’s affordability mandate saved its latest skyscraper proposal"
Portland’s council just showed why inclusionary housing can lead to more homes if done right.
by Michael Andersen, Portland For Everyone, March 28, 2018
"Inclusionary Housing in the United States: Prevalence, Impact, and Practices" by
Emily Thaden and Ruoniu Wang, Grounded Solutions, Sept 2017.
- Brasuell, J. "Inclusionary Zoning and Unintended Consequences." Planetizen, September 19, 2016.
- City of Portland. "Inclusionary Housing Zoning Code Project." https://www.portlandoregon.gov/bps/71274.
- Cortright, Joe (2016). "Portland considers inclusionary zoning." City Observatory, (September 13, 2016). cityobservatory.org/portland-considers-inclusionary-zoning/.
- Jacobus, Rick, et al. "Inclusionary Housing: Creating and Maintaining Equitable Communities." Lincoln Institute for Land Use Policy, 2015. http://www.lincolninst.edu/sites/default/files/pubfiles/inclusionary-housing-full_0.pdf.
- New York City Council. (2016). Mandatory Inclusionary Housing. Retrieved from http://labs.council.nyc/land-use/plans/mih-zqa/mih/.
- New York City Department of City Planning - NYC Planning. (2016). Mandatory Inclusionary Housing. Retrieved from https://www1.nyc.gov/site/planning/plans/mih/mandatory-inclusionary-housing.page
- Valdez, Roger. "Sticky Narratives: The Real Story of MIZ, and the Non-profit Housing Industrial Complex." Smart Growth Seattle, May 15, 2017. http://www.smartgrowthseattle.org/sticky-narratives-real-story-miz-non-profit-housing-industrial-complex/.
- Zhorov, I. (2016). Ideas Worth Stealing: Inclusionary zoning to grow affordable housing.Keystone Crossroads. Retrieved from http://crossroads.newsworks.org/index.php/local/keystone-crossroads/91987-ideas-worth-stealing-inclusionary-zoning-to-grow-affordable-housing-.