Creating affordable housing

Strategy overview

  • Creating more affordable housing stock: While local governments lack many of the tools that federal and state governments can deploy to create new affordable housing, they have a number of meaningful options at their disposal. These include legislation (like zoning reform), process incentives (like expedited permitting), and financial incentives (like tax abatements). Some communities may also facilitate the construction of more affordable housing through the establishment of community land trusts, strategic leveraging of land banks, or enabling housing construction on public land.
  • Starting with zoning and land use reform: A major pillar of a local strategy to increase the availability of affordable housing is zoning reform. Without the ability to build denser housing, any local strategy to create new affordable homes will be limited in its effectiveness. In addition to zoning changes, procedural reforms like reducing or eliminating parking minimums, adapting building codes to enable more efficient construction, and expedited permitting can also be powerful enablers of increasing housing supply.
  • Focusing on inclusive, higher-density zoning: In high-demand areas, inclusionary zoning policies can be an effective local strategy to increase the number of affordable homes. These policies require or encourage developers to dedicate a fixed share of new homes or apartments to households with low or moderate incomes. These policies may include supplemental incentives for developers, like density bonuses, and/or reduced or waived fees.
  • Incentivizing affordable unit development: Jurisdictions can provide builders with significant financial incentives for projects that include affordable housing units. Such incentives can take the form of property tax exemptions or abatements, below market financing, and capital subsidies that can reduce financing needs that could slow progress.
  • Investing in land for affordable homeownership: Another practice to increase supply is facilitating acquisitions of land for the construction of affordable homes. This may include using government-owned land and properties for the construction of new housing, partnering with community groups or nonprofits to launch a community land trust, or adding foreclosed properties to land banks.
Target Population
Key Stakeholders
Mayor or County Executive's Office, City Council, Planning Department, Housing/Community Development Department, Program Evaluation Team

What evidence supports this strategy?

Multiple research syntheses of affordable housing models demonstrate effectiveness; however, further rigorous, independent evaluations are necessary to confirm replicability of effects. 

  • A 2022 research synthesis found that inclusionary zoning policies can increase access to quality, affordable housing for low- and moderate- income households; however, additional rigorous evaluation is necessary to confirm effects.

  • A 2022 research synthesis on community land trusts found that the strategy may be associated with a decrease in resident displacement and foreclosure and increases in housing stability; however, additional rigorous evaluation is necessary to confirm effects.

  • A 2022 research synthesis found that the Low Income Housing Tax Credit can increase access to quality, affordable housing for low-income households; however, additional rigorous evaluation is necessary to confirm effects.

Is this strategy right for my community?

Creating affordable housing has been shown to improve outcomes predictive of upward mobility. These outcomes, identified by the Urban Institute, are housing affordability, housing stability, economic inclusion, and racial diversity.

City and county leaders can assess local conditions for each of these outcomes using the metrics below, identified by the Urban Institute. This assessment can be used to determine whether this strategy is appropriate for their community. (Note: these metrics are a starting point for self-assessment and are not intended to be comprehensive.)

All cities and counties with populations over 75,000 can receive a customized data sheet here.

  • Measuring housing affordability in your community: Examine the ratio of affordable and available housing units to households with low, very low, and extremely low income levels. These data are available from the Census Bureau’s American Community Survey and the U.S. Department of Housing and Urban Development’s Local Income Bands.

  • Measuring housing stability in your community: Examine the number and share of public-school children who are ever homeless during the school year. These data are collected by local public school districts.

  • Measuring economic inclusion in your community: Examine the share of people experiencing poverty who live in high-poverty neighborhoods. These data are available in the Census Bureau’s American Community Survey.

  • Measuring racial diversity in your community: Examine an index of people’s exposure to neighbors of different races and ethnicities. These data are available through the Census Bureau’s American Community Survey.

Best practices in implementation

  • Design a long-term plan: Large-scale efforts to increase housing affordability often work backward from long-term, concrete goals, rather than being conducted on an ad hoc basis. A strong, cohesive plan typically requires significant resources, including dedicated government staff and investments in external support.
  • Use supply as a lever for affordability: Shifting a market towards more affordable housing requires more housing supply overall. Incorporate both direct efforts to facilitate more affordable housing, like land banks and housing construction on public land, and a comprehensive suite of supply-side reforms that will allow for density (i.e. eliminating single-family zoning and parking requirements) and more rapid development (like expedited permitting).
  • Solicit feedback from all stakeholders: At the beginning of a new housing planning process, launch a robust public engagement effort targeting two separate audiences: community members and developers. For residents, hosting public forums, conducting focus groups, and administering surveys to pinpoint community concerns can build trust and buy-in. These sessions launch the planning and design phase, and include a wide range of materials to help residents understand how their neighborhoods might change, including extensive use of visuals and 3D models. For developers, direct engagement through interviews and roundtables may help identify which types of interventions will most meaningfully change the status quo.
  • Set concrete eligibility criteria: To ensure incentives are appropriately applied and to maximize new affordable units created, set and communicate clearly what qualifies as affordable housing, and what share of units must meet such criteria. Doing so can ensure developers appropriately apply for expedited permits, tax abatements, and other benefits reserved for projects that make significant progress toward increasing available affordable housing units. Similar clarity should be applied when putting new units on the market: jurisdictions should provide guidance on who is eligible and how to secure a newly available unit.
  • Make a multi-pronged case for reform: Especially for changes that include legislation, frame increasing housing supply as a multidimensional issue with a range of benefits. This can include achieving goals in areas beyond housing affordability, such as racial equity, desegregation, regional economic development, and climate change.

Evidence-based examples

Legal structure operated by a nonprofit organization that allows communities to control land and development projects
Stable and healthy families Supportive neighborhoods
Policies that encourage or require developers to dedicate a share of new housing units to low- or moderate-income households
Supportive neighborhoods Stable and healthy families
Community-owned or public entities that acquire troubled properties and transform them into community assets
Supportive neighborhoods
Land development approach merging distinct uses (commercial, residential, leisure) for greater density and diversity in a given geographical area
Supportive neighborhoods
Local regulatory action shaping development, design, and built environment of communities and municipalities
Supportive neighborhoods