Affordable Housing Finance

Inclusionary Zoning Hurts More Than It Helps

Published: 2019 | Emily Hamilton | Mercatus Institute


Inclusionary zoning is popular among policymakers for two reasons. First, it appears “free.” It produces affordable housing units without an outlay of tax dollars. Second, it allows policymakers to appear as if they’re adopting a pro-affordability agenda without reforming the exclusionary zoning that leads to high house prices in the first place. Policymakers should not pursue inclusionary zoning as an affordability strategy. Rather, policymakers who want to create an environment of housing stability for households of all incomes should pursue land use liberalization (allowing for more abundant housing supply) along with subsidies targeted to those households that need them to afford market-rate housing.