The Basics of Inclusionary Zoning

November 13, 2015 | by Michael Wilt

Categories: Affordable Housing, Construction, Homeownership

As cities across Texas struggle with how to increase the availability of affordable housing, incorporating affordable housing into market rate developments, known as "inclusionary zoning," often comes up as a possible tool to accomplish that goal. "Inclusionary zoning" or "inclusionary housing" refers to any policy requiring a certain portion or percentage of housing built or preserved to be affordable to low or moderate income households.

It's a tool that can evoke strong opinions and confusion on what is legal or not in Texas. In this blog entry, we take a closer look at how communities may or may not use inclusionary principles to incorporate affordable housing into market rate developments.

What Municipalities May or May Not Do

Per the Texas Local Government code, a municipality may not pass an ordinance or set a regulation "that establishes a maximum sales price for a privately produced housing unit or residential building lot." This is the language housing policy experts point to when referencing Texas' ban on inclusionary zoning. For example, a municipality can't tell a private developer that 10% of for-sale residential units have to be sold at a certain price or less.

Municipalities may "create or implement an incentive, contract commitment, density bonus, or other voluntary program designed to increase the supply of moderate or lower-cost housing units" or allow for income restrictions in "homestead preservation districts" created by the Legislature.

Density Bonuses

The most common incentive cities offer in exchange for affordable units is a density bonus. Cities allow a developer to build more units - and thus increase their profit - in exchange for providing a certain percentage of affordable units. The challenge is creating a program that is attractive enough for developers. The City of Austin is working to make its current density bonus program more appealing as evidenced by an October 2015 resolution.

Other Incentives

Cities can also provide other types of perks to promote the development of affordable units like streamlining the development process, offering parking reductions, providing tax abatements, reducing development fees, offering cash incentives, or dedicating general obligation bond dollars for affordable units. Cornerstone Partnership, a Virginia-based network of housing professionals, created an Inclusionary Calculator that allows users to plug in these incentives to demonstrate how a project can be profitable with affordable units included.

Homestead Preservation Districts

These districts allow for the creation and preservation of affordable housing in districts with boundaries created by a municipality. They can establish tax increment financing, land banks and land trusts to build or preserve housing in the district that is restricted to households at certain income levels. TSAHC operates a statewide land bank and land trust through our Affordable Communities of Texas program. 

As Texas cities continue to struggle with increasing housing prices, more local governments may find themselves experimenting with some of these tools as a mechanism to include housing for a variety of income levels in more developments.

On the House blog posts are meant to provide general information on various housing-related issues, research and programs. We are not liable for any errors or inaccuracies in the information provided by blog sources. Furthermore, this blog is not legal advice and should not be used as a substitute for legal advice from a licensed professional attorney.



Hello Destiny,

Please dial 211 to connect you to local resources.

TSAHC does not currently offer any classes on inclusionary zoning.  If you are interested in learning more about inclusionary zoning policies, we recommend the following resources:

Destiny williams

Looking to find inclusionary zoning apartment and take the class


Hello Nickki,

Please dial 211 to connect to local resources.  Texas Department of Housing and Community Affairs (TDHCA) has assistance programs as well.  Please see their website at:

Nickki Valentine

I was trying to get more information on the inclusionary zoney for help with housing Im a single mother with three sons could someone give me the right information thank you


Hello Renee,

Thank you for your question.

Inclusionary zoning is most often based on local ordinances for the community you live in. These ordinances create incentives or requirements for developers to include affordable housing in the project they’re developing. To learn more about the inclusionary zoning ordinance in your community, you’ll need to contact the City of County planning department where you live.

Renee Mack

How do I sign up to get an inclusionary zoning certificate?


Hello Nichelle,

Thank you for reaching out! We’d recommend reaching out to your closest continuum of care organization, like the Ending Community Homelessness Coalition (ECHO) in Austin. They will be able to get you in touch with all the resources you need to find housing in the long-term. You might also find it helpful to call 2-1-1 to get more information on resources in your area.

Nichelle Massey

I am currently homeless living in a hotel in texas


Hello Shanique,

TSAHC does not currently offer any classes on inclusionary zoning.  If you are interested in learning more about inclusionary zoning policies, we recommend the following resources:


Hello Monesha,

Thank you for writing us.  Please call 2-1-1 for all of your basic needs.  This is an automated line that houses contacts for food, shelter, & clothing.  You may also consider contacting Texas Dept of Housing and Community Affairs (TDHCA).  They do have Section 8 housing and can help you with reduced rent.  Finally, contact the city in which you live.  Sometimes they have rental programs available.


Hello Tanaekieyia,

Please consult our website for Home Buyer’s classes.  If you are interested in other classes, please be specific about the classes you are interested in taking.

ShaNique G

I was reaching out to find out where the list of virtual classes for inclusionary zoning can be accessed.

Monesha Reed

I was just looking for emergency housing or affordable housing I’m a single mother with one child in need of help

Tanaekieyia spann

I was looking for the virtual classes that I can sign up for so that I can get my certificate. Could you help direct me?

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