AMI: Area Median Income (AMI) is the midpoint of a region’s income distribution. It is commonly used by housing practitioners and policy makers to calculate income limits for eligibility in a variety of housing programs.
Barriers May Exist to IH: Map designation for states where legal barriers may exist to local inclusionary housing policies (particularly mandatory policies that do not allow developers to “opt out” of the program), e.g. state law limits local rent control provisions or the state is a “Dillon’s Rule” state and no statute expressly authorizes inclusionary housing measures.
Compliance Options: Options provided in the inclusionary housing program for meeting the requirement of contributing to affordable housing when new development occurs. Common options include providing the permanently affordable units on-site, direct off-site development, land dedication, and in-lieu fees.
Dillon’s Rule: In “Dillon’s Rule” states, actions by localities must be explicitly authorized by state statute and may not conflict with state law.
Highest Income Served: Measured as a percentage of area median income, it is the ceiling of the highest income level – across both rental and ownership if both types of developments are regulated under one program – according to program’s income targeting requirements.
Home Rule: In “home rule” states, cities, municipalities, and/or counties are granted the ability to pass laws to govern themselves, within the bounds of state and federal law, by the state constitution or legislature.
IH Permitted: Map designation for states where all types of inclusionary housing policies are explicitly permitted by legislation.
IH Prohibited: Map designation for states where at least some form of local inclusionary housing policies (typically mandatory policies) are clearly prohibited for both ownership and rental housing, either by statute or by court decision.
Incentives: Many inclusionary housing programs offer planning and zoning or financial benefits (“incentives”) in order to at least partially offset the cost of providing affordable housing units in market rate buildings. Common incentives include the right to build higher density buildings, lower parking requirements, or property tax abatements.
In-Lieu Fees: The most common alternative way for developers to satisfy a city’s affordable housing requirements is to pay a fee in lieu of (instead of) on-site production. In lieu fees are generally paid into a housing trust fund and used (often along with other local funding sources) to finance affordable housing developed off site.
Inclusionary Housing Program: A set of rules or a government initiative that encourages or requires the creation of affordable housing units or payment of fees for affordable housing investments when new development occurs.
Linkage/Impact Fee (Fee-Based) Program: Linkage fees (sometimes called impact fees or development fees) are an alternative to traditional inclusionary housing programs. They are called linkage fees because they attempt to link the production of market-rate real estate to the production of affordable housing. Residential linkage fees are fees that are charged to developers of new market-rate housing and used to fund the development of affordable housing. Commercial linkage fees (also sometimes called ‘jobs/housing linkage fees’) are fees that are charged to developers of new office or retail properties and used to fund the development of affordable housing.
Local Government: The administration of a particular town, city, county, or district.
Lowest Income Served: Measured as a percentage of area median income, it is the ceiling of the lowest income level – across both rental and ownership if both types of developments are regulated under one program – according to program’s income targeting requirements. If a program has a single income targeting requirement (e.g. all units must serve households making 50-80% AMI), the highest income served and lowest income served are the same (80% AMI) because, while some units may at some point serve households making 50-79% of AMI, the lowest income required to be served by any given unit is 80% AMI.
Mandatory Program: Mandatory inclusionary housing programs require the creation of affordable housing when new development occurs; the developer has no choice about whether to provide the affordable units.
No Barriers to IH: Map designation for states that are “home rule” states and rent control is not prohibited nor are there other potential sources of risk under state law.
Regulated Units: Housing units that are under some sort of governmental regulation requiring they be rented or sold at affordable prices to low-income households.
Set-Aside: The portion of on-site housing units that must be affordable. In most cases it is measured as the percentage of total project units.
TIF: Tax increment financing (TIF) is a public financing method that is used as a subsidy for redevelopment, infrastructure, and other community-improvement projects.
Traditional Inclusionary Housing (Unit-Based) Program: Program that creates affordable units directly or through alternative compliance options such as payments of in-lieu fees.
Unit Concessions: Adjusted requirements to inclusionary units (e.g. smaller size/less expensive finishes) as a type of incentive that helps offset the cost of providing affordable housing units in market rate buildings.
Unregulated Units: Market-rate housing units that are not under any governmental regulation requiring they be rented or sold at affordable prices to low-income households.
Voluntary Program: In voluntary inclusionary housing programs, the developer has the option to receive certain valuable incentives in exchange for providing affordable homes. While voluntary programs usually produce fewer affordable homes than mandatory programs, sometimes voluntary programs have some notable political and legal advantages.
