Inclusionary housing ordinances are one mechanism, among many, intended to spur affordable housing development within the private market. The typical argument justifying why the private market does not create affordable units is that it is not economically viable given the economics of housing production. Inclusionary housing ordinances work to overcome that economic barrier and establish incentives that may make affordable housing development feasible. These incentives may be in the form of zoning exemptions and density bonuses in return for units reserved for low and moderate-income households and may assist communities to meet their fair share of regional affordable housing needs.

The ordinances facilitate mixed-income development, where a portion of the new units created are reserved for qualified low to moderate-income households, while the remaining units are sold or rented at or above market value. Developments should be designed with a common aesthetic, making the affordable units blend in and be visually unidentifiable from the rest. Thus, inclusionary zoning helps avoid the segregation of affordable or low-income housing, allowing a more diverse and appealing housing stock to be created.