Systemic racism, bias and other forms of intentional oppression have shaped the laws, institutions and the daily lives of Black Americans since the inception of this nation. Scholars like Natalie Moore and Richard Rothstein detail how neighborhood disinvestment and housing disparities are the direct result of race-based policies. Exclusionary zoning, racially restrictive covenants, and redlining all deprived households of color of equal access to neighborhoods of their choice and of wealth-building through traditional homeownership. 

Historically, exclusionary zoning practices were explicit in their intent to create and reinforce racial segregation. An ordinance in Indianapolis required a majority of white residents to give written consent before an African American could move into the area.  An ordinance in Apopka, an Orlando suburb, barred Blacks from living on the north side of the railroad tracks and Whites from living on the south side. Many local ordinances like these were in effect until the late 1960’s.   

What do we mean by Racial Equity?

Racial equity is defined as “both an outcome and a process.” Racial equity places priority on ensuring that people of color are afforded opportunities that they historically have been denied and from which they continue to be excluded.

  • As a process, it means that Black, Brown and other marginalized people of color are actively leading the creation and implementation of policies, programs and practices that have an impact in their lives. It also means that White people are acknowledging and confronting racism and unconscious bias within themselves in addition to the sometimes-flawed existing regulations that shape the places we all live, work, learn and gather.
  • As an outcome, it means that a person’s racial identity does not determine their life opportunities and results, such as access to a safe home and amenity-rich neighborhoods.

In recent decades, exclusionary zoning has taken a far more subtle form.  Today, planners use the term exclusionary zoning to refer to some relatively common restrictions, such as low-density zoning permitting only for-sale single-family homes.  Such rules can exacerbate economic and racial segregation by preventing developers from building naturally lower-cost homes and apartments, like small houses, duplexes, or apartment buildings. 

Inclusionary housing is a response to historical and modern forms of exclusionary zoning. Although not intended to completely right racial injustices embedded in our nation’s housing practices, it can provide an immediate supply of affordable housing for households earning below median income in neighborhoods already rich with services and amenities. As Raj Chetty’s research pointout, upward mobility within a person’s lifetime is partially dependent on where they reside. Providing safe housing in neighborhoods with access to better schools, food and transportation is not a panacea – but it is one strategy municipalities can adopt to help address racial disparities in health and wealth.

Incorporating racial equity into inclusionary housing programs 

Done right, inclusionary housing programs can be an important tool for advancing racial equity in housing.  But what exactly does “doing it right” look like in practice? 

Grounded Solutions identified 14 key steps to advancing racial equity through specific technical elements of inclusionary housing programs. These are: 

  1. Choose income targets for the affordable units that match those of renter households of color. 
  2. Require or encourage the construction of unit sizes that match the household sizes of renter households of color. 
  3. Adopt building design standards to avoid stigmatizing residents of affordable units. 
  4. Consider the use of City subsidy to advance racial equity goals. 
  5. Base the decision about compliance alternatives on the needs and preferences of households of color. 
  6. Establish high bar marketing requirements to ensure renters of color have access. 
  7. Support preference policies that advance racial equity. 
  8. Require a lottery for applicant selection (rather than first come, first served). 
  9. Set limits on resident selection screening criteria. 
  10. Require rental property owners to accept Section 8 Housing Choice Vouchers. 
  11. Collect and analyze data on the race and ethnicity of those served by affordable units. 
  12. Base the decision about which resale formula to use on feedback from people of color and equity-oriented organizations. 
  13. Require lasting affordability for affordable units. 
  14. Partner with a Community Land Trust for stewardship of affordable units. 

 While there is no perfect example of a racially equitable inclusionary housing program, there are programs that have incorporated one or more key elements that help advance racial equity. This report provides more detail on the recommendations above and how they advance racial equity; for each recommendation, we spotlight an example of a best practice from the field. This companion report addresses how to use a racially equitable process to develop your inclusionary housing program.   

Common Questions

How does a feasibility study help establish an appropriate inclusionary policy?

An economic feasibility study conducted by a qualified real estate economist can provide local policymakers with a clearer sense of how inclusionary housing requirements will impact the profitability of local development projects and the price that developers can pay for developable land. The economist will research local prices and rents as well as the key factors driving the cost of building. The economist will use this information to assess whether or not proposed affordable housing requirements would make typical projects infeasible. Any kind of feasibility study is necessarily somewhat imperfect, but the goal is to give policymakers a general sense of the likely impact of proposed housing requirements and incentives on land prices and development profits. Ultimately, a detailed feasibility study is the only way to address legitimate concerns about whether affordable housing requirements could do more harm than good.

Read more about conducting an economic feasibility analysis here.

Will property owners pass the cost on to tenants/homebuyers?

No: Rents and home prices are set by a market. When a city imposes inclusionary housing requirements, it may increase a developer’s costs. But developers can’t really pass those costs onto home buyers or tenants because new units must still be competitively priced in the overall market. Instead, over time, land prices will fall to absorb the cost of the inclusionary housing requirements. Any incentives offered by a community would reduce the degree of land price reductions. Both theoretical and empirical economic research supports the conclusion that in the short term the costs associated with affordable housing requirements are born by developers and in the longer run they are passed on to land owners.


Can inclusionary housing produce enough units to solve the problem?

Probably Not: Inclusionary housing is only ever one among several tools that cities deploy to address the dire need for more affordable housing and the full set of policies is not enough to meet the full need in most cities. But that is no reason not to do all that we can. Denver City Council member Robin Kniech says “no one ever says we shouldn’t pave the roads just because we can’t fill every pothole.”

While inclusionary housing is only one tool in the toolbox, it’s an important one. Nationwide, 258 inclusionary housing programs reported creating about 110,000 affordable homes. Also, 123 programs, some of which overlap with the 258 programs reporting units, reported collecting $1.76 billion in fees to use for affordable housing.

The way you design your program can make a difference in how many units it produces. While the average production rate across all programs is 27 units per year, excluding programs that have produced zero units, average production rate for the country’s top 20 programs is 235 units per year—almost 10 times greater (Wang and Balachandran, 2021). The most productive programs share certain features: they are mandatory, offer incentives, allow developers flexibility with multiple options for compliance, and require long-term affordability.


Inclusionary Housing in the United States: Prevalence, Practices, and Production in Local Jurisdictions as of 2019

How prevalent are inclusionary housing programs in the United States? What are the program design patterns? And what is the scale of production for these programs? Building on our earlier work, Grounded Solutions Network embarked on a large-scale data collection effort between 2018 and 2019 to study inclusionary housing programs in local jurisdictions. The study yielded this report.
Read the Report

Racial Equity in Inclusionary Housing

How can inclusionary housing programs best incorporate racial equity? These two reports focus on two important elements intended to engage both the process and outcome of racial equity: Advancing racial equity through anti-racist methodologies that engage in transformative change, and advancing racial equity through specific technical elements of inclusionary housing policies, programs and practices.
Read the Reports

Affordable By Choice: Trends in California Inclusionary Housing Programs

This report examines inclusionary policies all over the state of California and looks at their effectiveness, what kinds of homes were produced, who lived in these homes, and the overall impact on the city or county. View Report

Is Inclusionary Zoning Inclusionary?

This report examines 11 inclusionary programs across the United States to determine the extent to which the policies serve lower-income families and provide inclusionary residents with access to low-poverty neighborhoods. They also evaluate whether inclusionary programs offer lower-income children opportunities to access high-performing schools. View Report