New market-rate development tends to occur in high-opportunity areas from which people of color have been systematically excluded and are often unable to afford. In communities with stronger housing markets, inclusionary housing is an effective tool to provide affordable homes in high-opportunity areas. But in communities with less strong housing markets, it may not be financially feasible for developers to include affordable units in new market-rate development.
This article describes some approaches that communities can take to craft an effective inclusionary housing program early in the market cycle, or in mixed markets where one neighborhood varies dramatically in rent levels from the next.
