In response to the nationwide affordable housing crisis, many local governments are turning to inclusionary zoning as an effective local tool for generating much needed affordable housing. In crafting an inclusionary housing program, every community faces a major decision: should the inclusionary housing program be mandatory or voluntary? This decision raises questions common to any policy debate involving markets and governmental regulation. Is a mandate needed to produce affordable housing or are incentives sufficient to spur developers to create affordable homes and apartments? Can a community provide enough incentives (through density bonuses, flexible zoning standards, fee waivers, etc.) to entice developers to build affordable housing without a mandate? Will mandates for affordability and the production of affordable housing, even when coupled with generous cost offsets, chill market activity and exacerbate affordability problems by restricting supply? Mandatory or voluntary – which approach will produce more housing and more affordable housing for the preferred populations?

Every community will engage in its own political debate and evaluate its own legal authority to determine its position on mandates and incentives. However, experience with inclusionary housing, both recent and long-standing, provides a number of insights on this important policy decision. Overall, mandatory programs have produced more housing, produced more housing for lower-income populations; provided more predictability for developers and the community; and have not stifled or chilled development activity. As a result, more communities are choosing mandatory approaches. This article will explore this issue by examining program experience and studies from across the country.