Cluster development concentrates houses on smaller lots within specified areas of a parcel or site, allocating the remainder of the parcel to be set aside as common open space or to protect environmentally sensitive areas. Clustering houses can reduce the cost of housing by centralizing infrastructure. Road frontage, lot size, setbacks, and other traditional subdivision regulations may also be relaxed to permit the developer to preserve ecologically sensitive areas, historical sites, and/or other unique characteristics of the land being subdivided. Cluster development most often incorporates affordable housing when used in conjunction with density bonuses.

Cluster development targets the population that resides or will reside in the cluster zone generally. When density bonuses are allowed in conjunction with cluster development, some of the additional units are often targeted to low- and moderate-income renters and homebuyers.  By enacting zoning policies that support a diversity of housing types, Cambridge, MA accommodates mixed-income developments such as Auburn Court. The development includes a mix of one-, two- and three-bedroom units, flats and duplexes for a total of 137 housing units.