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Inclusionary zoning (IZ) is municipal and county planning ordinances that require or provide incentives when a given percentage of units in a new housing development be affordable by people with low to moderate incomes. Such housing is known as inclusionary housing. The term inclusionary zoning indicates that these ordinances seek to counter exclusionary zoning practices, which exclude low-cost housing from a municipality through the zoning code. Non-profit affordable housing developers build 100% of their units as affordable, but need significant taxpayer subsidies for this model to work. Inclusionary zoning allows municipalities to have new affordable housing constructed without taxpayer subsidies. In order to encourage for-profit developers to build projects that include affordable units, cities often allow developers to build more total units than their zoning laws currently allow so that there will be enough profit generating market-rate units to offset the losses from the below market-rate units and still allow the project to be financially feasible. Inclusionary zoning can be mandatory or voluntary, though the great majority of units have been built as a result of mandatory programmes. There are variations among the set-aside requirements, affordability levels, and length of time the unit is deed-restricted as affordable housing.
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