Inclusionary Zoning (IZ)

Inclusionary zoning (IZ), also known as inclusionary housing, is a policy that requires a share of new housing development to be affordable to low- or moderate- income households. The cost of developing affordable units is typically offset with a density bonus (an allowance to build more units than would otherwise be permitted). By including affordable housing in a market-rate housing development, inclusionary housing policies promote mixed-income development projects. IZ tends to be successful in creating affordable housing units in locations with strong residential real estate markets.

California is a leader in the application of local inclusionary zoning policies; approximately 170 cities throughout the State have instituted IZ policies.² The following San Mateo County jurisdictions have adopted inclusionary zoning or other below-market housing policies:

In 2015, the California Supreme Court unanimously upheld a San Jose inclusionary law that requires developers of large for-sale residential projects to create some units at below-market rates or pay in-lieu fees to build affordable housing.³ The court’s decision did not address rental housing.

• IZ policies foster mixed-income development projects and neighborhoods.
• IZ programs can disperse affordable housing in low-poverty neighborhoods, and can help mitigate displacement in neighborhoods undergoing development and gentrification.
• IZ is a market-based tool that leverages private sector development, and as a result, requires limited public investment compared to other affordable housing programs.
• Research on inclusionary programs has suggested that these programs provide low-income families with access to low-poverty neighborhoods and higher-performing schools. ⁴

• Inclusionary programs must be designed carefully to ensure they are effective in producing affordable units alongside market-rate development.
• The features of an IZ program must be tailored to the particular housing needs and market conditions of the jurisdiction, and IZ policies sometimes need to be modified as these conditions change over time.

• Develop informational resources for your community: Interactive maps showing jurisdictions with inclusionary zoning ordinances and the number of units created under IZ policies.

• Inclusionary Zoning and Mixed-Income Communities, Evidence Matters, Spring 2013, U.S. Department of Housing and Urban Development
• Tool: Inclusionary Zoning, Housing Innovations Program, Puget Sound Regional Council