Inclusionary housing policies, also referred to as Inclusionary Zoning or Mixed-Income Housing, are local government policies where market-rate housing developers are either required or incented to include affordable units in market-rate apartment buildings. The value of IH/IZ is that it can produce additional affordable housing units beyond the limits of the usual housing subsidy programs and that it produces mixed-income housing. Well over 500 jurisdictions across the country operate IZ programs, but until recently they have been rare in Minnesota.
HJC has been trying to change that for some time, by advocating for the adoption of IZ policies. Several years go HJC was able to secure the services of a national expert in IZ, Grounded Solutions, to come in and provide technical expertise, including economic analysis, for local jurisdictions. HJC has also been active in clearing up confusion over what can be done by cities legally; a state law authorizes IZ but is worded in very ambiguous language. IZ policies have now been adopted in a number of suburban jurisdictions, including St. Louis Park, Edina, Golden Valley, and Brooklyn Park, and are in process in cities like Bloomington and Eden Prairie. Minneapolis adopted an interim IZ policy in late 2018 with plans to adopt a permanent policy in 2019.
IZ policies can be controversial. Developers typically resist their adoption but then adjust to them once they are in place. IZ policies do not work in all situations; they work best in place with strong markets for new market-rate multifamily development. But when the conditions are right, they can add significant numbers of new affordable units. Since 2017, St. Louis Park has seen over 160 new affordable units created through IZ (counting developments either completed, under construction or in planning).