Inclusionary zoning requires or rewards the inclusion of below-market 'affordable' homes within new residential development, usually a set percentage of units, sometimes in exchange for density bonuses or fee waivers. Pioneered by Montgomery County, Maryland, in 1974 and spreading across many US cities and later to other countries, it harnesses the planning system to produce mixed-income housing without direct public construction. Programmes vary widely in whether participation is mandatory, how many units are required, and whether developers may pay a fee instead. Its effectiveness depends heavily on local market strength and design.
It became a leading market-era tool for producing affordable housing and social mix through the planning system, embedding income mixing into the approval of new development.