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As housing costs soar in major cities across the United States, inclusionary zoning is an attractive option debated among planners and policymakers. Inclusionary zoning (IZ), a city-enacted ordinance that requires builders to set aside a percentage of housing units for low-income to moderate-income families when constructing market-rate housing, has long been seen as a mutually beneficial solution to subsidize affordable housing. But new research suggests that this practice may not benefit every community.

Harvard Kennedy School faculty members Linda Bilmes, the Daniel Patrick Moynihan Senior Lecturer in Public Policy, Justin de Benedictis-Kessner, assistant professor in public policy, and Brian Iammartino, adjunct lecturer in public policy, worked with graduate students in Bilmes’ “Greater Boston Applied Field Lab” course to analyze how communities are faring in implementing IZ. This experiential course is supported by Harvard Kennedy School’s Rappaport Institute for Greater Boston and the Bloomberg Center for Cities at Harvard.

A new working paper by Bilmes, de Benedictis-Kessner, Iammartino, and several of their students, “Can Inclusionary Zoning Be an Effective Housing Policy in Greater Boston? Evidence from Lynn and Revere,” offers five key takeaways:

• IZ policies involve a tradeoff between the number of units produced and the depth of affordability. The study found that the deeper the affordability level required, the fewer total units will be built. “IZ is most effective at producing moderate-income housing units rather than very low-income housing units,” they point out. “This tradeoff affects both the feasibility and the outcomes achieved by an IZ policy.” 
• Cities should include positive incentives in order to make inclusionary developments financially feasible for developers who must find private financing. Two effective program levers can include eliminating minimum parking requirements and adding density bonuses within an IZ policy so that these policies do not decrease housing production. “The overall objective should not be to dampen development,” the researchers say, “but to incentivize developers to incorporate affordable units into their market rate developments and to increase the economic mobility and prosperity of residents.”
• IZ should be used in combination with other affordable housing tools because IZ alone will not solve affordable housing. “The creation of new affordable housing units is a step forward,” the researchers say, "but that must be balanced alongside the need to avoid dampening the local housing market.
• IZ policies work best when tailored to the needs of a specific community. “Looking at a city’s historical production of housing is helpful when understanding community needs,” the researchers note. “If housing production has historically not kept up with population growth this determines a city’s starting point. Additionally, addressing political risk by bringing all parties into the IZ policy planning process from the beginning can reduce potential political push back.”
• Due to IZ’s sensitivity to labor, housing construction and other costs, IZ policies must be revisited regularly and updated to ensure they are achieving the desired outcomes.

While the study suggests that IZ may not be the right choice for every community, where it is a good fit, the capacity to produce affordable housing is there. Based on interviews with the municipal leaders in the target cities of Lynn and Revere, two Massachusetts communities experiencing robust housing development, along with dozens of other Boston-area policymakers, developers, and housing industry groups, the researchers found carefully targeting IZ policies may lead to affordable housing production in locations that might not otherwise have any below-market-rate housing.

While creating affordable housing is a priority across the country, the authors suggest in a that creating affordable housing takes a comprehensive approach. They argue addressing the overall housing shortage in cities such as Boston includes having the support and participation of private developers along with “a wider investment in regional transportation and increased direct housing subsidies.”