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Many local leaders realize that an inadequate supply of affordable housing effectively limits economic growth: when people pay too much for housing, they spend less on other goods and services, while businesses cannot ex- pand without enough housing available for their workforce. Public policy at the state or local level––whether in the form of regulations, incentives, or technical assistance—is key to sup- port the development of mixed-income housing. Inclusionary zoning, density bonuses, and land assembly assistance are just some of the ways that public policy can facili- tate the production of mixed-income housing. Inclusionary zoning is an increasingly popular tool used to stimulate more affordable hous- ing units in a mixed-income setting. With in- clusionary zoning, localities can require that some percentage of every new residential development beyond a given minimum size (e.g., 50 units) is offered at a price below the market rate and thus is affordable to lower- income residents. The technique makes the provision of affordable housing predictable and even-handed, and removes it from the political process. Though the details of inclu- sionary zoning programs vary, typically they provide incentives such as development rights or zoning variances to developers for includ- ing affordable housing units in their projects. In urban areas, municipalities can help develop- ers overcome the problems of land assembly and acquisition that can stand in the way of development. To encourage the construction of mixed-income housing on vacant land, thereby fostering new affordable housing, cities can compile an inventory of vacant 8 Montgomery County Inclusionary Zoning Perhaps one of the earliest and best-known examples of inclusionary zoning is in Montgomery County, Maryland’s Moderately Priced Dwelling Unit (MPDU) ordinance,under which private,for-profit homebuilders have built nearly 11,000 MPDUs in mixed-income communities since 1974.15 The MPDU law requires that at least 12.5 to 15 percent of the units in resi- dential developments of more than 50 units are affordable to households in the lowest third of the county’s income range. To offset the lost rent,devel- opers receive a density bonus of up to 22 percent. To ensure continued affordability,the Housing Oppor- tunities Commission of Montgomery County (the local public housing authority) has the right of first purchase of one-third of the affordable units in every new devel- opment. The public housing authority has purchased 1,600 townhouses outright and rents another 1,200 apartments in the midst of middle-class neighbor- hoods. In all,through its MPDU policy and other housing initia- tives,the Housing Opportunities Commission has leveraged about 35,000 homes in mixed-income settings.16 Beyond Montgomery County, many municipalities around the country have adopted in- clusionary zoning ordinances, such as Burlington,Vermont; Boston; Denver; Santa Fe, New Mexico; and San Diego, and many others are consider- ing passing similar measures. In fact,most jurisdictions can trace some aspect of their in- clusionary zoning ordinances to the Montgomery County program.17 Profile Myth #2 Local regulations make it too difficult to develop mixed-income housing. Fact #2 Local and state regulations, incen- tives, and technical assistance can help the private sector to produce mixed-income housing. King Farm, a 430-acre, planned community in Rockville, Maryland, will include 3,200 units at buildout. As part of the MPDU program, 12 percent of the units will meet the affordable housing requirements. TO R T I G A L L A S A N D P A R T N E R S