The Structure and Potential Economic Effects of Inclusionary Zoning Ordinances (Feature‪)‬

INTRODUCTION Inclusionary zoning ordinances encourage or require real estate developers to set aside a percentage of the units included in market-rate residential development projects for low- and moderate-income households. By leveraging the resources of the private sector, this type of land use regulation potentially offers an effective way to expand the housing options available throughout a jurisdiction without the need for costly public subsidies. Surveys indicate inclusionary zoning has produced more than 34,000 affordable units in the state of California alone over the past three decades. (1) Success stories have also been reported in several other states where inclusionary zoning has become much more common in recent years. (2) Nonetheless, concerns have been raised that inclusionary zoning can constrain residential development and increase housing prices in some instances. Understanding its strengths and weaknesses is therefore essential to help policymakers craft regulations that expand housing opportunities, while being mindful of unintended economic consequences. (3) The literature review presented in this article is designed to provide such an understanding.