Program Objectives: 

The IH Program has three main options: “R10” for projects located in a R10 zoning district and may increase FAR to 3.5 time the affordable floor area with a maximum of 12.0; “Voluntary Inclusionary Housing” for projects located in a designated high-density area and may receive a FAR bonus of 1.25 times the affordable floor area; and “Mandatory Inclusionary Housing” which is required for projects located in a MIH district. Certain projects in a MIH zone may be exempt from the requirements, depending on the project’s size.  

Program Benefits:

The IH program offers numerous incentives for developers, enhancing project viability while ensuring a contribution to affordable housing. Key benefits include:

• Increased Floor Area Ratio (FAR): Projects in qualifying zones may add residential space beyond typical zoning limits, maximizing their potential yield and enhancing profitability.
• Height Bonuses: R10, VIH, and MIH participants often receive height bonuses that increase the building’s vertical capacity to align with the added FAR, allowing developers to take full advantage of additional area.
• Flexible Affordable Unit Locations: Both VIH and MIH offer options for offsite affordable housing within specified limits, which gives developers flexibility in unit placement, making it easier to meet project design goals while fulfilling IH obligations. However, there may be affordable housing penalties that apply. 
• Reduced Parking Requirements: Parking requirements for IH units are waived in transit zones and reduced in non-transit zones for units designated at 80% AMI, easing parking-related costs and creating more efficient use of land. 

 Design Criteria:

IH programs have specific criteria for affordability levels, unit distribution, and design standards to ensure that affordable housing is integrated meaningfully within developments. These requirements vary by program and zoning area and include vertical and horizontal distribution requirements, minimum unit size requirements, and Accessibility Compliance with Section 504 of the Rehabilitation Act.

 Affordability Criteria:

• R10: Affordable units must be designated to households earning 80% AMI
• VIH: Affordable units must be designated to households earning 80% AMI
• MIH: MIH districts offer several options to address affordability

• MIH Option 1: 25% of the residential floor area set aside to affordable housing at a weighted average of 60% AMI, with at least 10% at 40% AMI
• MIH Option 2: 30% of the residential floor area set aside to affordable housing at a weighted average of 80% AMI
• MIH Option 3: 20% of the residential floor area set aside to affordable housing at a weighted average of 40% AMI
• MIH Workforce Option: 30% of the residential floor area set aside to affordable housing at a weighted average of 115% AMI, with at least 5% at 70% AMI and 5% at 90% AMI

• The affordable unit mix must comply with HPD’s Test A (proportionality) or Test B
• No more than two thirds of a story may be allocated to affordable housing and at least 65% of the stories are to contain at least 1 affordable housing unit
• Units designated to affordable housing must remain permanently affordable

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Integration and Combined Benefits:

The value of Inclusionary Housing benefits increases significantly when combined with tax abatement programs like 421a, 485x, or 467m. Developers can meet the requirements of both IH and tax abatement programs with the same affordable units, maximizing financial incentives. This combined approach allows projects to achieve greater FAR while receiving tax relief, which improves project feasibility and investor appeal.

 Filing Timelines:

The Inclusionary Housing Program filing process involves detailed coordination. The first phase, “closing” involves submitting project designs, ownership documents, financial underwriting, and affordable housing plans. HPD assigns an attorney to review regulatory agreements, draft required legal documents, and set a closing date once all approvals are secured. Upon receiving an Inclusionary Housing Permit Notice, the project may pursue approval construction permits. The second phase, “completion” happens when construction is complete and requires the submission of as-built documents and compliance filings to confirm that affordable units were constructed as planned. Upon receiving an Inclusionary Housing Certificate of Completion, the project may pursue approval for a Certificate of Occupancy.