What is Inclusionary Housing?

Inclusionary Housing (or inclusionary zoning) is defined as a mandatory requirement or voluntary goal to reserve a certain percentage of housing units for lower-income households in new residential developments. The affordable units are often expected to be dispersed throughout the development in an effort to include a mix of income levels within new residential areas.

Since 1999, inclusionary housing programs have created about 30,000 affordable homes and apartments in California.* As of March 2006, one-third of all localities in the state (about 170 California cities and counties) reported using inclusionary housing, a 60 percent increase since 2003, when researchers identified 107 inclusionary policies and ordinances. The spread of inclusionary programs is most dramatic among cities, although smaller towns and counties are increasingly considering these programs.

The performance of our schools, urban sprawl, transportation gridlock, the continued strength of the California economy, and health care for families and children--these are pressing social issues at the top of the agenda of decision makers and concerned citizens. Largely hidden from view is how powerfully affordable housing impacts these issues.

In designing effective inclusionary housing programs, the most significant policy considerations are:

1. The inclusionary percentage-how much is required;
2. Income levels targeted;
3. Alternatives to construction on-site;
4. Developer incentives;
5. Length of affordability

*From: Affordable in the Right Places: Trends in California's Inclusionary Housing, published jointly by the Nonprofit Housing Association of Northern California, California Coalition for Rural Housing, San Diego Housing Federation, and Sacramento Housing Alliance, August 2007.