Local leaders are no longer only interested in incentives to encourage business attraction and commercial development.
I am increasingly asked about incentives that can support affordable housing in communities. To provide good answers, Smart Incentives will be working with our partner Lisa Sturtevant & Associates on this issue in the coming months.
In the meantime, here is an excellent summary of incentives communities provide to developers to support inclusionary housing, as presented by the Grounded Solutions Network, Lincoln Institute of Land Policy and the National Housing Conference.
- Density bonus – The density bonus is the most common form of incentive used by inclusionary housing programs. Developers are allowed to build more housing units on a site if some of the units are set aside for affordable housing.
- Expedited processing – Expedited processing moves projects with an affordable component to the front of the line in zoning, planning, and building permit processing.
- Fee waivers – Many communities offer partial or full waivers of planning, permitting, or impact fees to projects that include affordable units.
- Parking reduction – Some programs allow projects with affordable units to build fewer parking spaces than would otherwise be required under local zoning rules.
- Tax abatement – Property taxes are one of the more significant annual expenses associated with housing. Some communities offer a partial abatement or complete waiver of property taxes to owners of projects with affordable housing.
Inclusionary housing “refers to a range of local policies that tap the economic gains from rising real estate values to create affordable housing opportunities for low- or moderate-income households.” More than 500 cities have used various inclusionary housing tools, according to the Grounded Solutions Network and its partners.
Inclusionary housing helps create affordable housing in places that are desirable to residents of all income levels and in neighborhoods where market-rate housing is being built.
To learn more, please see https://inclusionaryhousing.org.