Inclusionary zoning (IZ) is an affordable housing tool that links the production of affordable housing to the production of market-rate housing.  IZ policies require new residential developments to make a certain percentage of the housing units affordable to low- or moderate-income residents. This mandatory approach is distinct from Incentive Zoning, which may provide density bonuses or fast-track permitting in exchange for affordable units.  As of 2004, 99 cities and towns were found to have IZ by-laws or ordinances, out of 187 cities and towns studied in a broadly-defined geography of Metro Boston.

The Massachusetts Smart Growth Toolkit notes: “In practice, an inclusionary zoning bylaw may include some flexibility to its mandatory provisions. For example, bylaws may only apply to certain types of development, such as new construction or substantial rehabilitation. Inclusionary zoning bylaws may include "in-lieu-of" payment or construction alternatives providing developers the option of paying a fee per unit, building affordable units off-site, or rehabilitating units elsewhere in place of constructing affordable units within the proposed development.”

10.a    All municipalities should adopt Inclusionary Zoning bylaws or ordinances

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