Photo: David Sundberg

The tri-state region is one of the least affordable and most segregated metropolitan areas in the U.S.

More than one out of every five households in the region pays more than half of their income for housing, and most of these households have low or very moderate incomes. With rents rising virtually everywhere across the tri-state area, there are fewer places where these families and individuals can afford to live. It is particularly difficult, and often virtually impossible, to find an affordable home where the schools are good, the streets are safe, and jobs are accessible by public transit.

This affordability crisis accentuates the deep divides by income and race that stymie opportunities for many poor, especially black and Hispanic residents, to get ahead, and limits the economic potential of the region as a whole. In spite of our diversity, the region is one of the most segregated metropolitan areas in the United States. A contributing factor is that many places still restrict the creation of apartments and townhouses—home types that are generally more affordable than single-family houses. Even when these are permitted, development that includes subsidized housing is often fiercely resisted by existing residents. These regulations exclude poor and even moderate-income residents. Since lower-income residents are disproportionately people of color, and because of previous policies like redlining and restrictive covenants, limited zoning regulations that allow only single-family houses or make no provisions for affordable housing also perpetuate racial and ethnic segregation.

Inclusionary zoning is an effective tool to address segregation while creating more affordable homes

Inclusionary zoning is a policy that requires new multifamily housing construction to include some low- and moderate-income homes. An effective way to create more affordable homes, inclusionary zoning plays a critical role in creating more mixed-income housing and neighborhoods. New York City now requires affordable homes as part of every new housing development, but only in a few parts of the city—specifically, areas that have in recent times been rezoned to create more housing.

Outside of New York City, almost 100 municipalities in our region, and hundreds more across the country, have adopted some type of inclusionary zoning, but these vary widely and have no clear or consistent definitions or minimum standards across jurisdictions. On average, municipalities which have these policies in the region are lower-income, and therefore offer fewer opportunities for affordable housing in communities where there are resources to support high-quality schools, parks, transportation and other sources of well-being and opportunity.

To be fair and effective, inclusionary zoning needs to be applied throughout the region

To promote mixed-income, diverse communities, inclusionary zoning needs to apply in affluent as well as low and middle-income jurisdictions. Regulations can and should be flexible enough to apply to the needs of each community, existing neighborhood characteristics, incomes and market conditions. It does mean, however, that New York, New Jersey and Connecticut will need to enact legislation to:

  • Allow multifamily housing near all train stations as-of-right, making it easier, faster and more cost-effective to build this type of housing.
  • Develop and enforce minimum thresholds for affordable housing for every municipality (or sub-municipality in the case of larger cities), with enforcement policies such as local zoning overrides for affordable housing or mixed-income developments.
  • Ensure that new housing construction in every municipality provides specified shares of low-and moderate-income housing that is affordable to households that would otherwise be excluded from the neighborhood; that minimum acceptable standards be applied; and that similar definitions of terms and enforcement mechanisms be used.

These three components will encourage substantially greater production of new homes, especially mixed-income housing, thereby increasing development opportunities while reducing racial and economic neighborhood segregation.

To maximize the amount of affordable housing, prioritize its location in higher-income areas, and respond to local conditions, municipalities and states should adopt these policies:

  • Give developers options to make projects financially feasible across a range of market conditions. These options should be structured to encourage more market and moderately priced homes in low-income neighborhoods needing investment, and build more low-income homes in high-income neighborhoods. This structure also enables more growth across the board, by leveraging the market in high-income areas while not overly depressing it in lower-market areas.
  • Set minimum thresholds for the share of low-to-moderate income homes at 15 percent to 30 percent. While specifics should vary depending on the local market, lower minimums should generally be set for projects providing homes for low- and very low-income households, and higher thresholds for projects providing homes for moderate income households.
  • Encourage homeownership for moderate-to-middle income households by prioritizing owner-occupied units when developing middle-income homes pursuant to inclusionary zoning laws. This can be especially important to help stabilize neighborhoods and give existing residents a means to benefit from rising property values.
  • Limit options for building affordable homes off-site, or paying into a fund that supports affordable units at offsite locations. Allowing developers to buy out of their requirement to build affordable units within their proposed development perpetuates segregation and often leads to poorer quality, poorly maintained affordable units. However, if offsite land is cheaper it may result in the ability to build more affordable homes while maintaining a financially feasible development. The cost of buying out of onsite affordability through a cash payment or constructing off-site housing should be set significantly higher than it is currently, in order to make sure that the number of new affordable homes created outweighs the benefits of creating mixed-income, onsite housing developments.
  • Implement inclusionary zoning in tandem with stronger state incentives and assistance for municipalities to develop multi-family homes in appropriate locations. These homes can range from accessory apartments in one and two-family homes to large apartment buildings near transit hubs. Planning grants and technical assistance should be provided to assist municipalities, and state infrastructure funding should be contingent on municipalities enacting zoning to allow multifamily housing in appropriate locations.
Each state has different contexts to build on:
  • In New Jersey, statewide inclusionary zoning would complement a state housing plan that sets affordable housing targets for each municipality.
  • Connecticut requires towns and cities to allow developments with affordable housing if the municipality currently has less than 10 percent low-income housing. Inclusionary zoning would reduce litigation, speed approvals and expand the number of mixed-income projects.
  • Inclusionary zoning would be a major step forward in New York State, and needs to include affordable housing goals for municipalities and a provision that requires municipalities to accept new development that makes progress towards these affordability goals.


The success of new policies requiring low- and moderate-income homes will be measured by the number of affordable homes that are created and the degree to which it reduces segregation by creating mixed-income communities. Combined with other strategies to increase the construction of multifamily homes and preserve existing affordable housing, the region could produce more than half a million new affordable homes in high-income neighborhoods by 2040. This would increase the share of homes affordable to low-income households, help stabilize gentrifying neighborhoods and expand opportunities to live in neighborhoods with good schools and healthy environments.

Paying for it

Inclusionary zoning can be implemented without government funds beyond the cost of administering and enforcing the program. Rather, it cross-subsidizes homes at below market rents and prices with a portion of the market value of a development project. New rules to allow larger multifamily developments and reduce time and costs of construction would help offset the added costs of providing the affordable homes. In cases where it does not, the cost of subsidizing the below market housing will be borne either in reduced profits to the developer or by delaying construction until the market improves. Government subsidies can also be utilized if the regulation requires more affordable units or lower rents than the market units can support. Ideally, inclusionary zoning should be combined with an effective subsidy policy. Long term, the added costs from the required affordability will result in lower land costs than would have been in place without these requirements.

The major risks are that requirements will be either too weak, and result in little affordable housing and neighborhood desegregation, or so stringent and inflexible that it depresses the housing market long-term. The major limitation is that it is difficult to provide significant and deep housing affordability without government subsidy. Even in strong housing markets, there is a limit to how much projects can internally subsidize low-income housing. Inclusionary zoning cannot solve the problem of housing affordability on its own, but it is an effective strategy for creating mixed-income housing in affluent communities, and expanding housing options for existing residents in gentrifying neighborhoods.

1. RPA, “Spatial Planning and Inequality,” 2015
2. RPA, “Untapped Potential: Opportunities for affordable homes and neighborhoods near transit,” 2017
3. RPA, “Charting a New Course,” 2016