In many communities without formal inclusionary housing policies, developers are often asked to provide affordable housing in larger, high-profile development projects, often as part of a package of negotiated community benefits.


  • Larger projects can often afford to provide more affordable units than would typically be required by a broadly applicable ordinance.
  • Direct negotiation offers developers an opportunity to propose alternatives that may work better for their projects.
  • Negotiated agreements have frequently been used as a temporary step prior to the implementation of an inclusionary ordinance.


  • Project-by-project negotiations are time consuming and therefore generally only used for large projects.
  • Without a formal policy, many smaller projects will provide no affordable units.
  • This can be seen as unfair to developers of larger developments and it often results in fewer affordable units being built.

Santa Cruz, California

Santa Cruz went through a multi-year planning process to figure out how development could better meet the city’s needs. The work resulted in new requirements for developers that want to build taller buildings. In certain parts of the city, developers can build up to 32-36 feet without significant discretionary approval procedures. If they want to build higher, up to 60 feet in some cases, developers must sign a development agreement and provide additional benefits, usually more affordable housing. Santa Cruz uses an on-call consultant economist to determine how much value is created by the extra density so the city can adjust the requirements accordingly.

Common Questions

Does an inclusionary policy have to be written into zoning code?

No: Several communities have adopted inclusionary policies through methods other than zoning code amendments. This may be by resolution of municipal council or executive order of the mayor, for example. The decision to adopt inclusionary housing as an ordinance or through resolution should be based on the following:

  • If the inclusionary program is to be of limited duration and impact (e.g. applied only to select developments or areas), then a resolution may be appropriate.
  • If the inclusionary program is of extended duration and universal impact, then it should be adopted through ordinance.

While adopting a policy as an ordinance can be a cumbersome process, it is less subject to changes due to near-term political shifts and changing priorities of municipal officials. It also provides certainty to developers because the regulations are codified as law with defined requirements and application.

Boston, Massachusetts is one example of an inclusionary development policy that has been adopted by executive order. The policy was first adopted through an executive order of the mayor in the year 2000, requiring a 10 percent affordability component in any residential project of 10 or more units that is financed by or developed on property owned by the city or the Boston Redevelopment Authority (BRA), or where zoning relief is requested. The city is currently in the process of amending their zoning code to incorporate inclusionary zoning to (1) increase developer certainty in its implementation and application and (2) make it a permanent ordinance rather than an executive order that is easily changed by political shifts.