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Zoning and Affordable Housing

Zoning Basics

Zoning is the use of municipal authority to restrict certain land uses to particular neighborhoods. It defines the allowable uses of certain areas, whether it is for residential, commercial or industrial use, or some combination of these. Over time, zoning has played an important role in shaping development. While it has been used to separate historically incompatible uses, such as stockyards from housing or factories from shops, it has also been used to reinforce racial segregation. Over time, this has created too much separation in some places. In fact, developments can safely and effectively accommodate multiple uses. Improving a neighborhood’s character via a mix of residential and commercial uses has become common practice in most metropolitan areas and is marketed to residents who want the convenience of amenities at their doorstep. Having these uses side-by-side (or combined in a single building) is known as “mixed-use” zoning.

Zoning is perhaps the most powerful regulatory tool at a jurisdiction’s disposal. It plays a huge role in how neighborhoods, cities and regions develop. If done well, zoning can help encourage economic growth while also providing affordable housing for households that would otherwise be displaced or unable to access a community. If done without adequate consideration, then zoning can produce or even deepen inequities across cities and allow unwanted development to threaten the stability of communities.

Zoning changes are often part of a jurisdiction’s comprehensive plan, which lays out the proposed or planned development within the jurisdiction’s boundaries. Comprehensive plans describe a jurisdiction’s goals for growth and development and provide a legal basis for all land use regulations and decisions.

Any changes to zoning must be enacted “in accordance with” the vision articulated in the plan. This often includes a discussion of the housing need in the jurisdiction. Several states, including California and Florida, require that a “housing element” that describes the goals, objectives and programs for meeting current and projected housing needs be included in comprehensive plans.

It is also important to note that zoning is important in every type of community: urban, suburban and rural. An urban jurisdiction can use it to shape a neighborhood’s character, e.g. shifting development from low-density neighborhoods to high-density, mixed-use neighborhoods, or allowing residential development in formerly industrial areas. Suburban and rural jurisdictions can use zoning to allow for open space preservation, subdivision of large parcels, or limit land use to certain industries. Such changes can be highly political, as extreme changes in zoning codes can produce very different types of neighborhoods. 

Using Zoning to Create More Affordable Neighborhoods

As presented here, we focus on the relationship between zoning and affordable housing in two component ways: increasing density through compact development and using zoning codes to create and protect affordability.  Both of these contribute to a regulatory and market context that makes below-market housing development feasible.

Increasing Housing Affordability Through Density and Mixed Use

The first component, compact development, incorporates the concepts of high-density and mixed-use. Compact development does not describe a specific building or project type, but rather refers to a development approach in which single-family or multifamily homes are built at relatively higher densities that maximize the use of land by accommodating a greater level of development on a given parcel. Compact development is facilitated by zoning districts and zoning overlays that allow for greater intensity of development, taller heights, reduced property line setbacks, more commercial space and lower parking requirements than typically found in single-family residential zones.

High-density zoning allows for more units per area, whether that is accomplished through apartment buildings, multifamily townhomes or allowing for the construction of accessory dwelling units  (ADUs) on parcels with existing single-family homes. Mixed-use zoning can allow for the inclusion of commercial buildings alongside residential buildings or the inclusion of street-level commercial space in the bottom of residential buildings.

Compact development can contribute to housing affordability in several ways. Mixed-use neighborhoods often allow for, as the term suggests, a mix of uses and facilitate a range of transportation choices, including pedestrian activity and public transit. This can reduce transportation costs, which contribute significantly to a household’s overall cost of living. Higher-density development also increases the number of units available in a neighborhood. This can help reduce the cost of housing in places where the cost is strongly influenced by supply. Producing larger amounts of units can also decrease the overall cost per unit.

The Bay Area region in California has seen some attempts to use ADUs to increase housing unit density. In San Francisco, a zoning code change in 2014 legalized existing ADUs throughout the city that were previously considered illegal. In 2015, San Francisco’s Board of Supervisors approved legislation that allowed for the construction of new ADUs in two of the city’s districts. Berkeley, Calif., did something similar in 2015 when city officials voted to remove barriers to constructing new ADUs. This change was made in order to increase the supply and range of housing, encourage new units near transit and minimize the impact of the new units on neighboring properties. Other cities in the country, including Portland, Ore., have pursued ADUs as a solution for affordable housing.

Increasing the development of housing density has also been examined at the federal level. In 2008, HUD published a case study on accessory dwelling units, which found ADUs to be an inexpensive way to increase a jurisdiction’s affordable housing stock. More significantly, in 2016 the White House released its Housing Development Toolkit, which includes the recommendations of “allowing accessory dwelling units” and “enacting high-density and multifamily zoning,” which are two important elements of compact development.

Increasing Affordability Through Inclusionary Zoning

The other way in which zoning contributes to creating housing affordability is inclusionary zoning (also known as inclusionary housing, or IZ). When pursuing higher-density development, even if developers realize savings from selling more units on a set parcel of land, the cost savings are not always transferred to consumers in the form of lower prices or rents. In markets where the overall supply of housing is tight — or in specific neighborhoods where demand for compact, mixed-use development exceeds supply — the potential savings are not likely to be passed on to homebuyers or renters without explicit policies that build in affordability. For these reasons, communities interested in assuring that the benefits of compact development are equitably distributed will want to consider explicit policies to incentivize or require this outcome.

This is where inclusionary zoning can be effective. IZ programs tie the development of affordable housing to the development of market-rate housing. This is done by requiring or incentivizing a certain percentage of units in any new development to be affordable to households with a certain income range. Including such a requirement guarantees that the benefits of new development are made accessible to households along a range of incomes. Inclusionary zoning programs can be implemented alongside large transit-oriented development projects that build a higher density of homes and commercial spaces around new or existing transit stops. Inclusionary zoning helps prevent displacement due to the increase of property values prompted by such developments and allows the benefits of denser neighborhoods to be enjoyed by a diverse range of households.

A report published by the Lincoln Institute of Land Policy outlines the landscape of inclusionary housing. It includes case studies of inclusionary programs around the country, like the mandatory inclusionary program in Boulder, Colo., which has created 625 ownership and 125 rental units since its adoption in 2000. Boulder requires that 20 percent of owner-occupied units are made affordable to households at 113 percent or less of the area median income (AMI), while 20 percent of rental units are made affordable to households at 60 percent or less of AMI.

Another example is the program in Davis, Calif., which was started in 1987 and has created 800 ownership units and 1,200 rental units. The program in Davis requires 25 to 35 percent of rental units to be affordable to households that earn 80 percent or less of AMI and 10 to 25 percent of owner-occupied units affordable for households that earn 120 percent or less of AMI.


Changing the approved land use or density allowed for a land parcel is known as rezoning, and occurs when the current uses of land do not match the development needs of the jurisdiction. Decisions to rezone nonresidential areas for residential development should be balanced against the potential impact this change may have on existing businesses, as well as future economic development and job creation potential. A balanced approach is needed to ensure that rezoning does not stymie economic growth by limiting land available for commercial development, while also avoiding excessive limits on residential development.

While it can be complicated by politics, the rezoning process offers an opportunity to create affordable housing but also a time for increased speculation or opportunity for public opposition. The process to amend a comprehensive plan may be lengthy and require extensive public hearings. During this time, the land set for rezoning can be vulnerable to speculation, as allowing mixed-use or higher-density development can make the land more desirable for development. In order to curb the impact of speculation, jurisdictions may choose to establish a land bank or inclusionary housing policy in the rezoned area. Taking such a step will help limit the displacement of existing residents and build up a jurisdiction’s stock of affordable housing.

Impact of Zoning

The technical details of zoning become important in the rezoning process. While defining land use as residential, commercial or industrial may come across as fairly simple, the actual zoning regulations in mid-size and large cities become extremely complicated. For example, the City of Minneapolis uses 23 primary zoning districts to control land use within its boundaries. Each of these districts includes regulations regarding details of use, such as density, surrounding uses, setbacks, amount of impervious surfaces, residency requirements and others. In addition to these base districts, there are 16 overlay districts that provide further regulation as to what kind of development is permitted.  For example, the regulations for the Pedestrian Oriented Overlay District prohibit drive-through facilities, automobile services uses and transportation uses. These regulations also prohibit the placement of pole signs, “backlit awning and canopy signs” or “backlit insertable panel projecting signs.”

As suggested by this, zoning tends to be relatively specific in terms of what uses are allowed or encouraged. The map below shows the zoning districts of Washington, D.C. This map is included here to show how zoning is used to define particular areas, including several corridors along certain streets and avenues and special-purpose zones that allow for unique uses in certain areas. Two central corridors can be seen running north out of the downtown area, highlighted by boxes (14th Street NW is on the left and Georgia Ave NW is on the right). These corridors are zoned to allow and encourage mixed-use development. This includes some special-purpose zoning on the southern end of 14th Street NW that marks it as an “arts district.”

Implementation Example: Parking Requirements

Beyond the obvious impact of zoning on what types of businesses and services are located on which streets, more technical aspects of zoning also have a huge effect on the form that development takes. The parking requirements defined by zoning codes are a good example of this. Most zoning codes establish minimum parking requirements­—for example a developer must provide at least one parking space for every bedroom in a new apartment building. The impact of these requirements is addressed in the White House toolkit, which says that “parking requirements generally impose an undue burden on housing development.” Making changes to parking requirements is one of the most direct ways zoning can increase affordability of housing.

In areas well served by transit, parking requirements established strictly on the basis of traditional parking needs in other areas may overstate demand and overestimate residents’ rates of car ownership. Building parking areas is expensive. This is particularly true for the underground parking required in high-density areas with small lot sizes. Parking requirements can add significantly to the cost of developing housing and have been found to have a substantial impact on the financial feasibility of affordable housing developments. According to a study from 2016, requiring one parking space per unit increases the cost of development by 12.5 percent, and two spaces per unit increases costs by 25 percent. Other downsides of providing excess parking space include the usage of space that could be used for other on-site amenities (such as childcare facilities or medical clinics), reduced feasibility of infill development on small parcels where parking requirements cannot be satisfied and the potential undermining of a neighborhood’s walkability.

Localities have several options for designing a more equitable and responsive parking policy, including the following provisions:

Adjusting Parking Requirements for Specific Uses and Locations

At a minimum, communities interested in creating a more balanced parking policy can reduce the number of spaces required in areas within walking distance of robust public transit service.  Similarly, residents of certain types of multifamily properties often have lower car ownership rates and require fewer parking spaces. Tenants in transitional housing developments, for example, or residents of affordable senior housing often will not need the same number of parking spaces as residents in similarly sized market-rate family developments.  Deed restrictions—which provide a long-term guarantee that a property will continue to be used for the same purpose—or other use restrictions attached to housing properties can help to alleviate neighbors’ concerns about future uses and potential increases in demand for parking.

Replacing Parking with Transit in Joint Development Projects

“Joint development” projects enable local transit agencies to partner with private entities to develop agency-owned land near transit stations for residential, commercial or other uses. In many cases, these projects replace old surface parking lots, although some interpretations of Federal Transit Administration Guidance on Joint Development require one-for-one replacement of the commuter parking spaces.

Unbundling the Cost of Parking from Housing

In many developments, one or more parking spaces are included when a new resident rents or purchases a unit, so residents are essentially forced to pay for parking even if they don’t use it. The separation, or “unbundling,” of housing and parking can save residents money, reduce the amount of parking required by creating incentives for residents to use fewer spaces and indirectly promote the use of public transit.

In its Sustainable Transportation: Parking Toolkit, the Metropolitan Area Planning Council in Massachusetts lists several ways that parking may be separated from housing costs, including:

  • Reduce the number of parking spaces provided per unit to one in the lease or deed, with the option to rent or purchase additional spaces as needed.
  • Rent or sell parking spaces to tenants or buyers under a separate contract from dwelling units, at additional cost.
  • Reduce monthly rent payments for tenants who opt out of using a parking space.
  • In condominium developments, have owners rent parking spaces from the condo association, and use the revenue to supplement or replace revenue from condo association fees.

Unbundling parking allows for reduced parking requirements that reflect actual usage and reduced housing costs for residents who can meet their transportation needs through alternatives to car ownership, such as walking, biking, public transit and car sharing.

Maximum Parking Requirements

Rather than establishing minimum requirements, which contribute to the cost of development, some communities have adopted parking maximums, which place a ceiling on the number of parking spaces that may be provided within specified districts, typically mixed-use neighborhoods that are well served by public transit. Part of the goals of the city of San Leandro’s 2015 Downtown Parking Management Plan included encouraging the use of mass transit by requiring paid parking and free transit passes for workers in its downtown area. The city also set maximum parking requirements within its downtown transit-oriented development (TOD) zone and established a ceiling of one space per unit of new affordable housing. A similar policy has been adopted in Portland, Ore.

Community Opposition to Rezoning

Parking requirements are only one example of how zoning codes can have a tremendous impact on the development and feel of a neighborhood. Other zoning-related changes such as density, access to transportation and access to commercial amenities can have a huge effect.  Given the impact that zoning can have on communities and neighborhoods, it is not surprising that any changes to the zoning code present certain challenges.

One of the most common challenges in rezoning is opposition from nearby property owners who have concerns about the impact of new development on their quality of life and property values. This is often resistance to increases in density, such as the construction of a multifamily building in a neighborhood that is traditionally composed of single-family detached units.

Despite these concerns, the evidence does not indicate that increasing housing density negatively impacts local property values. At least one study from Harvard University researchers has even demonstrated that single-family homes close to multifamily buildings appreciate in value at rates equivalent to, or higher than, those that are not near multifamily homes. Moreover, those same researchers found no link between higher-density multifamily housing and increases in crime rates or traffic congestion. This is not to say that community concerns about rezoning are always unfounded. Proposed rezoning of neighborhoods can engender resistance from communities concerned that changes in zoning will prompt drastic changes in their neighborhoods.

In situations where local attitudes might be working against fair housing needs, removing certain parts of the rezoning process from local control can allow for equitable development. In 1969, the state of Massachusetts passed the Massachusetts Comprehensive Permit Act, known more widely by the chapter of Massachusetts law in which it is found: Chapter 40B. Chapter 40B (officially titled “Regional Planning”) gives affordable housing developers the right to appeal to a state-level body if local zoning authorities deny their rezoning application. Proponents argue that putting land use decisions at the state level helps mitigate the influence of overly parochial community opposition, and also encourages a regional perspective on housing need. In the event of an appeal, the burden is on the local zoning board to prove that there is “a valid health, safety, environmental, design, open space, or other local concern … [which] outweighs the [regional] housing need.” The specific regulation can be found here.

Chapter 40B focuses on addressing the regional need for affordable housing by circumventing any local jurisdictions that might prevent its development. While opponents argue that this limits the ability of local communities to control the development of their own neighborhoods, this process is allowed only in municipalities where less than 10 percent of the housing stock is affordable to low-income households. This targets the law to towns where there is a need for affordable housing and a lack of support for its creation. In 2010, there was an attempt to repeal Chapter 40B. This is despite the fact that it had successfully created over 250,000 units of affordable housing as of the end of 2014. The measure was defeated by a vote of 58 percent against.

Another example of conflict over zoning can be found in Austin, Texas. In 2016, community groups came out against the rezoning of a 3-acre site along the border between downtown and East Austin. The rezoning was proposed in order to allow the construction of two 15-story apartment towers. Opponents claimed that the allowed building height would be inappropriate for the neighborhood and cause significant traffic problems. The City Council member for the neighborhood took it a step further, suggesting that the new project would further solidify a geographical divide between the minority communities of East Austin and the Anglo neighborhoods on the other side of Interstate 35. The rezoning request was ultimately dropped by the developer.


Key Resources

Rezoning and Other Policy Tools

The Pratt Center for Community Development has produced a series of reports related to rezoning and land use in New York City.

Rezoning for Higher-Density Development

The Lincoln Institute of Land Policy’s website contains a Visualizing Density page, which provides users with a thorough overview of development density, including an image gallery that displays different levels of density and a quick quiz to test your knowledge of density.

Rezoning Underutilized Industrial or Commercial Land for Residential Development

The U.S. Environmental Protection Agency’s Brownfields and Land Revitalization website provides a wealth of information, including basic details about brownfields, news updates and case studies of successful brownfield revitalization projects. The Northeast Midwest Institute’s Brownfields page and the International City/County Management Association (ICMA) offer additional resources on brownfield redevelopment.

Borrowing Innovation, Achieving Affordability: What We Can Learn From Massachusetts Chapter 40B. 2016. Berkeley, CA: Terner Center for Housing Innovation, University of California Berkeley.

What Makes Inclusionary Zoning Happen? 2016. Lisa Sturtevant and Brian Stromberg. Washington, DC: National Housing Conference.

Separating Fact from Fiction to Design Effective Inclusionary Housing Programs. 2016. Lisa Sturtevant.  Washington, DC: National Housing Conference.

Inclusionary Upzoning: Tying Growth to Affordability. 2015. Robert Hickey.  Washington, DC: National Housing Conference.

Right Size Parking: Multi-family Parking Strategies Toolkit. 2015. Seattle, WA: King County Metro.

Achieving Lasting Affordability through Inclusionary Housing. 2014. By Robert Hickey, Lisa Sturtevant, and Emily Thaden.  Cambridge, MA: Lincoln Institute of Land Policy.

Compact Units: Demand and Challenges. 2014. By Vicki Been, Benjamin Gross, and John Infranca. New York City, NY: NYU Furman Center for Real Estate and Urban Policy.

Parking Reform Made Easy. 2013. By Richard Wilson. ACCESS Magazine.

Zoning as a Barrier to Multifamily Housing Development. 2007. By Gerrit Knaap, Stuart Meck, Terry Moore, and Robert Parker. Chicago, IL: American Planning Association, Planning Advisory Service Report Number 548.

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