Inclusionary zoning policies are an increasingly popular tool for addressing affordable housing challenges, with many cities and counties adopting such policies.  This policy that is zoning encourages or requires developers who are creating market-rate housing to set aside a percentage of the housing to be sold or rented. Its help local decisionmakers determine whether to include an in-lieu fee option in their inclusionary zoning ordinance and also help local decisionmakers understand what variations of in-lieu fees exist and how to structure in-lieu fees. As housing costs rise in markets across the country, local decisionmakers are looking for tools that create more affordable housing units. Inclusionary zoning enables the delivery of affordable housing in cities.

As housing costs rise in markets across the country, local decisionmakers are looking for tools that create more affordable housing units. Inclusionary zoning enables the delivery of affordable housing in cities that have historically high housing costs or where costs are rapidly going up because of gentrification and property value increases. Andrew Trueblood, director of the Office of Planning in Washington, DC, has said that inclusionary zoning is “not the biggest program that produces affordable housing in the city, but it is the biggest program that produces affordable housing in high-cost areas.” Under inclusionary zoning, developers are encouraged or required to set aside a share of the market-rate housing they’re creating to be sold or rented at below-market rates. Inclusionary zoning leverages the private market to create housing units that are affordable to households with lower incomes while allowing development projects to produce a return on investment. For that reason, inclusionary zoning policies are more effective in areas where more development is occurring. Inclusionary zoning ordinances are popular with policymakers because they create affordable housing units with little to no public subsidy. A 2016 survey found that 886 jurisdictions in 25 states and the District of Columbia have inclusionary zoning programs, although nearly 90 percent of them were in New Jersey, Massachusetts, and California (Thaden and Wang 2017).