New York City’s Inclusionary Housing programs aim to promote neighborhood economic diversity in the City’s highest-density districts and in neighborhoods planned for significant residential growth. The City’s voluntary programs – the R10 and the Designated Area programs – offer an optional floor area bonus in exchange for creation or preservation of affordable housing. Mandatory Inclusionary Housing, or MIH, requires affordable housing as part of all residential development above a certain size in applicable areas.

The affordable housing may be on the same site as the market-rate units or off-site in the same Community District or within one-half mile of the market-rate units. Affordable units may be rental or homeownership. All must be permanently affordable. The regulations for the Inclusionary Housing Program are found in PDF Document Sections 23-154 and 23-90. Maps of designated areas are in PDF Document Appendix F of the Zoning Resolution.

R10 program

The City created its first successful Inclusionary Housing program in 1987. The program is applicable in R10 districts and in R10-equivalent commercial districts.

New developments in eligible districts can increase maximum floor area ratio (FAR) from 10 up to 12 by providing affordable housing for low-income families. (“Low Income” is defined as 80 percent of Area Median Income and below.) Each square foot of affordable housing receives between 1.25 and 3.5 square feet of bonus floor area, depending on whether the affordable housing is provided on-site or off-site; through new construction, rehabilitation, or preservation; and whether it receives public funding.

Most of the City’s existing R10 and R10-equivalent districts are in Manhattan, so most units created by the program are in Manhattan. As of February 2017, the program has created nearly 4,000 units of permanently affordable housing.

Designated areas program

The Inclusionary Housing Designated Areas program was created in 2005 as part of a series of neighborhood rezonings. Between 2005 and 2013, the program was extended to other medium- and high-density areas rezoned for new housing opportunities.

Inclusionary Housing Designated Areas have been established in contextual medium- and high-density (R6 through R10) districts in the Bronx, Brooklyn, Manhattan, and Queens. In these districts, the “base” FAR allowed if the development does not participate in the Inclusionary Housing program is generally lower than the standard FAR for the district, and the maximum FAR available with the bonus is higher than the standard FAR. In general, developments within a Designated Area can increase permitted FAR by 33 percent if an amount of floor area equivalent to 20 percent of the building’s floor area, excluding ground-floor non-residential floor area, is provided for affordable housing. Affordable housing created through the program must remain affordable in perpetuity for households at or below 80 percent of Area Median income (AMI)1.

Designated Areas are listed by Borough and Community District in PDF Document Appendix F of the Zoning Resolution. Designated Areas are also mapped within certain Special Districts. As of February 2017, the program has created or preserved over 7,000 units of permanently affordable housing.

Mandatory Inclusionary Housing

In 2016, the City created a Mandatory Inclusionary Housing (MIH) program that will be applied to neighborhood rezonings and private applications that significantly increase residential capacity. Within “MIH Areas”, developments, enlargements, and conversions above 10 units or 12,500 square feet will be required to set aside a percentage of floor area for permanently affordable housing.

The program includes four options that pair set asides of a percentage of residential floor area with affordability levels. The Commission and the City Council will apply one or more of the options when creating new MIH areas:

  • Option 1: A 25 percent set aside at an average of 60 percent AMI, with a minimum of 10 percent at 40 percent AMI
  • Option 2: A 30 percent set aside at an average of 80 percent AMI
  • Deep Affordability Option: A 20 percent set aside at an average of 40 percent AMI
  • Workforce Option: A 30 percent set aside at an average of 115 percent AMI, with a minimum of 5 percent at 70 percent AMI and 5 percent at 90 percent AMI

Options 1 and/or 2 will be available in every MIH Area. The Deep Affordability and Workforce options may also be made available, except that the Workforce Option is inapplicable in Manhattan Community Districts 1 through 8.

MIH allows income averaging, which enables developments to include affordable housing for families at a range of incomes. The program also increases the required set-aside by five percent for developments that provide required affordable units off-site. Projects adding less than 25 units and 25,000 square feet are eligible to pay a fee in lieu of providing affordable units directly. These funds are reserved for affordable housing purposes within the Community District where the development is located.

MIH Areas appear in Appendix F of the Zoning Resolution. They will continue to be mapped as part of City-initiated or privately initiated rezonings or special permits that significantly increase the amount of residential floor area permitted in an area.

1 In the Special Hudson Yards District, the Special West Chelsea District, in Designated Areas mapped on First Avenue between 35th and 41st streets in Manhattan, and along the Greenpoint-Williamsburg waterfront in Brooklyn, developments can provide a portion of units for moderate- or middle income families if they set aside a higher percentage of floor area for affordable housing.