Designing a Policy - Inclusionary Housing

No two inclusionary housing policies are exactly the same. Policymakers in each community must consider a number of distinct questions. Every policy addresses each of these questions though the specific answers differ considerably from place to place depending on local conditions.

Key Program Design Questions

Program Structure

How should the program be structured?
Should there be formal requirements?
Should participation be voluntary or mandatory?
Should requirements apply everywhere or only in targeted areas?
Should the program require units or fees?
Should the policy exempt projects below a certain size?
Should rental or ownership projects be exempt?

On-site Development

Performance Requirement

What share of units should be provided at affordable prices or rents?
Do affordable units need to be identical to market-rate units?
If not, what design standards should apply?
Do affordable units need to be distributed throughout the market-rate project?

Income Targeting

Which income groups should the affordable units serve?
How can inclusionary programs serve very low-income (50 percent AMI?) households?

Off-site Development

Should developers be allowed to build affordable units offsite?
Should nonprofit partnerships be encouraged?
Should developers be allowed to donate land instead of building affordable units?
Should developers be allowed to access public subsidies for affordable units required under the inclusionary program?

In-Lieu Fees

Should developers be allowed to pay a fee instead of producing on-site units?
How should the fee be determined?
How should fees be adjusted for inflation?

Incentives

Should the program offer incentives to offset some or all of the cost of providing affordable units?

Affordability Preservation

How long should inclusionary units be required to remain affordable to lower-income residents?
Can inclusionary ownership units balance affordability and asset building opportunities?

Resources

Inclusionary Housing Program Design Worksheet

This worksheet gives municipalities the tools to design the basic structure of an inclusionary housing program. The worksheet helps municipalities define need, outline a basic program structure, plan policy choices, describe incentives, and decide compliance alternatives. View Worksheet