How can you incentivize mixed-income housing development?

Mixed-income housing development is a strategy to create more affordable and diverse communities by integrating low-income, moderate-income, and market-rate units in the same building or neighborhood. However, developing and maintaining mixed-income housing can be challenging for property managers, developers, and policymakers. How can you incentivize mixed-income housing development in your area? Here are some ideas to consider.

1 Use tax credits and subsidies

One of the most common and effective ways to incentivize mixed-income housing development is to use tax credits and subsidies that reduce the cost and risk of building and operating mixed-income housing. For example, the Low-Income Housing Tax Credit (LIHTC) program provides federal tax credits to developers who reserve a percentage of their units for low-income households. Similarly, the Housing Choice Voucher (HCV) program subsidizes the rent of low-income households who choose to live in mixed-income housing. These programs can help property managers attract and retain a diverse mix of tenants and generate a stable income stream.

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Toni Blake
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The only real incentive for this development is creative financing, along with inspiring examples of long-term management success. This would require creative financial opportunities and solutions for the unique challenges of varying income communities, their needs, and potential conflicts. While the idea is admirable in principle, many for-profit development industries view mixed-income housing as a higher risk.

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2 Offer density bonuses and zoning flexibility

Another way to incentivize mixed-income housing development is to offer density bonuses and zoning flexibility to developers who include mixed-income units in their projects. Density bonuses allow developers to build more units than the zoning code would normally allow, in exchange for providing a certain amount of affordable units. Zoning flexibility allows developers to bypass some of the regulatory barriers and restrictions that may limit the feasibility and design of mixed-income housing. For example, zoning flexibility may allow for mixed-use development, reduced parking requirements, or increased height limits. These incentives can help property managers optimize the use of land and create more attractive and livable mixed-income communities.

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Luke C.

I find off-market land for developers
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Encouraging developers to invest in affordable housing requires financial incentives. Traditionally, affordable housing isn't attractive to developers due to lower returns on investment. Providing direct tax credits, grants, or special financing is a straightforward way to motivate them. Another cost-effective approach is to permit increased density and development. By allowing more housing supply, the free market dynamics will naturally drive prices down. If municipalities embrace multi-family and small lot single-family developments instead of hindering them, we can swiftly make housing more affordable

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3 Create public-private partnerships and community engagement

A third way to incentivize mixed-income housing development is to create public-private partnerships and community engagement that foster collaboration and support for mixed-income housing. Public-private partnerships involve the cooperation of public agencies, private developers, nonprofit organizations, and other stakeholders in planning, financing, and managing mixed-income housing. Community engagement involves the participation and input of residents, neighbors, and local groups in the vision, design, and governance of mixed-income housing. These strategies can help property managers build trust and rapport with their tenants and the surrounding community, as well as leverage the resources and expertise of different partners.

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4 Implement fair housing policies and practices

A fourth way to incentivize mixed-income housing development is to implement fair housing policies and practices that ensure equal access and opportunity for all potential and current tenants. Fair housing policies and practices include complying with the federal, state, and local laws that prohibit discrimination based on race, color, religion, sex, national origin, disability, familial status, or other protected classes. They also include adopting inclusive and transparent criteria and procedures for tenant selection, screening, and eviction, as well as providing reasonable accommodations and modifications for tenants with disabilities. These policies and practices can help property managers avoid legal liabilities and promote a culture of respect and diversity in their mixed-income housing.

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5 Provide quality amenities and services

A fifth way to incentivize mixed-income housing development is to provide quality amenities and services that enhance the comfort and well-being of all tenants. Quality amenities and services include features and facilities that add value and convenience to the living experience, such as green spaces, fitness centers, laundry rooms, security systems, or Wi-Fi access. They also include programs and activities that foster social interaction and community building, such as resident associations, events, workshops, or mentoring. These amenities and services can help property managers increase tenant satisfaction and retention, as well as create a sense of belonging and identity in their mixed-income housing.

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Tarsiah Taman

Chairperson at Sabah Women Advisory Council
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Quality appropriate facilities and amenities are needed every where. In some communities, a common hall to hold small events eg. birthdays, is highly required since outside halls are costly to rent. These halls (when not in use) can be used as indoor play area for young kids too, lounge area for adults/ elderly to meet and network, and games room for children

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6 Evaluate and improve your performance

A sixth way to incentivize mixed-income housing development is to evaluate and improve your performance as a property manager of mixed-income housing. Evaluating and improving your performance involves collecting and analyzing data and feedback on your mixed-income housing outcomes, such as occupancy rates, tenant demographics, rent levels, operating costs, tenant satisfaction, or social cohesion. It also involves identifying and addressing the challenges and opportunities that arise from managing mixed-income housing, such as communication, maintenance, conflict resolution, or innovation. These actions can help property managers learn from their experiences and best practices, as well as demonstrate their accountability and commitment to mixed-income housing.

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7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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How can you incentivize mixed-income housing development?

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4

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1 Use tax credits and subsidies

2 Offer density bonuses and zoning flexibility

3 Create public-private partnerships and community engagement

4 Implement fair housing policies and practices

5 Provide quality amenities and services

6 Evaluate and improve your performance

7 Here’s what else to consider

Property Management

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How can you incentivize mixed-income housing development?

1

2

3

4

5

6

7

1 Use tax credits and subsidies

2 Offer density bonuses and zoning flexibility

3 Create public-private partnerships and community engagement

4 Implement fair housing policies and practices

5 Provide quality amenities and services

6 Evaluate and improve your performance

7 Here’s what else to consider

Property Management

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