As housing prices rise, developers and land owners are able to make greater profit for building commercial and residential developments.
Inclusionary policies seek to “capture” a portion of the higher value by requiring that developers include affordable housing in developments that otherwise would not include it. In its simplest form, an inclusionary housing program might require developers to sell or rent 10 to 30 percent of new residential units to lower-income residents.
Local inclusionary housing programs can vary. Some of this variation is related to state policy: the legal authority for municipalities to implement an inclusionary housing policy depends on whether or not state law allows it.* However, even within the same state, local jurisdictions adopt different programs in response to local conditions.
Several examples illustrate what these local programs have in common and also how they differ to meet local circumstances. See Designing a Program for more detailed information about the specific mechanics of these programs.
In Fairfax County the expansion of the DC Metro created a once-in-a-lifetime opportunity to build a new transit-oriented community at Tyson’s Corner. In a suburban area that housed fewer than 20,000 people in 2010, the county has planned a 24-hour urban center that will be home to more than 100,000 people and 200,000 jobs.
Fairfax County requires up to 20 percent of all residential units at Tyson’s Corner to be affordable for people who earn between 60 and 120 percent of the area’s median income. In addition, new commercial development projects pay a fee to fund affordable housing units.
Chapel Hill is a fast-growing college town where rising demand for student housing and tech-driven job growth have combined to drive up housing prices and rents. In 2000, as a part of the Comprehensive Plan, the Town Council adopted a voluntary policy encouraging any residential developments that involved a rezoning to include 15 percent affordable housing.
The informal policy resulted in the creation of more than 170 affordable units over a 10-year period as well as payment of over $1 million in affordable housing fees. In 2010, the Inclusionary Zoning Ordinance was formalized and added to zoning code in part because local developers preferred the flexibility of a formal ordinance. The Inclusionary Zoning Ordinance now requires all residential projects proposing five or more units to provide 15 percent of the units (10 percent in the Town Center) at prices that are affordable to low- to moderate-income households.
Resort communities often struggle with particularly acute affordable housing challenges. These communities typically employ many lower-wage workers who struggle to find housing in towns where there is high demand for luxury second homes. In Breckenridge only 25 percent of the housing units are occupied by year-round residents. Like most other Colorado ski towns, Breckenridge adopted a “Workforce Housing” program in the late 1990s. The program relies on a development impact fee to generate funding, which the town uses to purchase units in new and existing developments integrated throughout the community. Breckenridge has created a stock of more than 600 permanently affordable homes. These workforce units represent just 18 percent of all new housing units built since 2000, but they account for nearly 50 percent of the growth in housing units for permanent residents and 60 percent of the growth in families with children in the town. Today, 32 percent of the town’s permanent residents live in price- and income- restricted workforce housing units.*
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
This article from Grounded Solutions Network offers tips to help communicate about inclusionary housing in ways that circumvent common misperceptions and creates a new narrative for policymakers in moderate markets and more conservative political climates. Not every message is right for every community; advocates and policymakers should tailor these messages to their circumstances. View Report
