Inclusionary Zoning (IZ)
Details About Inclusionary Zoning
Inclusionary zoning ordinances vary widely among jurisdictions. Variations can include:
- Mandatory or voluntary: some ordinances require all eligible development to provide an affordable component, while voluntary ordinances provide incentives to encourage affordable units.
- Size threshold at which the ordinance applies: projects below a certain level (e.g. below 10 units) are often exempt from the ordinance.
- Percentage of units to be dedicated as affordable: typically ranges from 10 to 30 percent.
- Level of affordability: policies typically target low- and moderate-income households rather than very low- income households.
- On-site or off-site: some ordinances require affordable units to be built on-site as part of the project, while others allow them to be built off-site nearby, and often requiring a higher percentage of affordable units to be created in exchange for building off-site.
- Payment of in-lieu fees: some programs allow developers to buy out of their inclusionary obligation by paying a fee into a local housing fund to be used for building affordable housing elsewhere.
- For-sale or rental: IZ is used for both ownership and rental housing.
- Length of affordability: many IZ ordinances require long-term affordability periods of at least 30 years, or longer to ensure lasting affordability of inclusionary units. Many programs also restart affordability terms whenever a property is resold within the control period.1