Inclusionary zoning has been around for about fifty years in the United States. The first successfully implemented mandatory program launched in Montgomery County, Maryland, in 1974, and the policy has since spread to more than a thousand local jurisdictions across the country. The idea itself grew out of housing and civil rights pressures that had been building through the 1960s and early 1970s, so the roots run a little deeper than the 1974 starting date suggests.
What Came Before 1974
Inclusionary zoning emerged as a response to decades of the opposite policy. Through most of the twentieth century, many local governments used zoning rules to keep lower-income households out of their communities. Large minimum lot sizes, single-family-only districts, and minimum square footage requirements all worked as economic barriers. The U.S. Supreme Court had blessed the general approach back in 1926 in Euclid v. Ambler, treating the separation of housing types as a legitimate local power.
Those zoning tools operated alongside redlining, racially restrictive covenants, and discriminatory lending to produce deeply segregated communities. By the late 1960s, civil rights advocates had reframed exclusionary zoning as a tool of racial and economic segregation, and housing affordability pressures were climbing in growing metropolitan areas. Local governments started looking for something different.
The 1974 Starting Point in Montgomery County
Montgomery County, Maryland, enacted what is widely recognized as the first mandatory inclusionary zoning law in the country. Its Moderately Priced Dwelling Unit program, adopted in 1974, required developers of projects with 20 or more units to set aside a percentage of those units at prices affordable to lower- and moderate-income households.1Montgomery County, Maryland. About the Moderately Priced Dwelling Unit Program In exchange, developers got a density bonus allowing them to build more units than the base zoning would normally permit.
The program has produced more than 16,500 affordable units in the decades since. It also established the template that other jurisdictions have studied and adapted ever since: a percentage set-aside, offsetting incentives to protect project economics, and long-term affordability restrictions recorded against the property.
California’s Parallel Experiments in the 1970s
While Montgomery County usually gets the headline credit, California was running its own inclusionary experiments during the same period. The City of Irvine and Orange County adopted programs in the 1970s driven by a sharp imbalance between jobs and housing. Cities like Petaluma and Davis created de facto inclusionary policies by favoring developers who voluntarily included affordable units, in part to shield their growth management programs from legal challenges.
By the early 1980s, roughly 30 inclusionary housing programs had been adopted across California. Most clustered in the San Francisco Bay Area and Orange County, but the policy was already beginning to appear elsewhere in the state.
The Mount Laurel Decisions and the 1980s Expansion
The strongest legal push for inclusionary zoning came out of New Jersey. In 1975, the New Jersey Supreme Court ruled in South Burlington County NAACP v. Mount Laurel that municipalities could not use zoning laws to exclude low- and moderate-income families. Every municipality, the court held, had an obligation to provide a realistic opportunity for its fair share of affordable housing.
The original decision had no real enforcement mechanism, so in 1983 the court issued Mount Laurel II. That ruling added the “builder’s remedy,” which let courts approve affordable housing projects over a town’s objections when a developer successfully challenged exclusionary zoning. The threat pushed dozens of New Jersey municipalities to adopt inclusionary zoning rather than face court-ordered development.
In 1985, the New Jersey legislature followed with the Fair Housing Act, which created an administrative process for municipalities to demonstrate compliance with their fair share obligations. The statute explicitly required municipalities to offer incentives like increased densities to developers building inclusionary projects. The Mount Laurel line of cases and the legislation that followed produced tens of thousands of affordable homes in New Jersey through the 1980s and 1990s, and the reasoning shaped policy debates in other states for decades afterward.
Growth Through the 1990s and 2000s
Inclusionary zoning spread steadily through the 1990s as housing costs climbed in coastal cities and inner suburbs. Programs grew more sophisticated during this period. Instead of requiring every affordable unit to be built on-site, newer ordinances introduced multiple compliance pathways: a developer might build the required units at a different location or pay an in-lieu fee into a local affordable housing fund.
San Francisco’s trajectory is typical. The city ran an informal inclusionary housing policy starting in 1992, adopted a formal ordinance in 2002, and tightened it into a mandatory program in 2006 requiring a 15 percent affordable set-aside on-site in developments of five or more homes. Many other cities moved along a similar arc, beginning with voluntary programs and then making them mandatory as housing markets heated up.
The scale of adoption became clear once researchers started counting. The first comprehensive national inventory, conducted around 2014, found inclusionary housing policies in nearly 500 local jurisdictions across 27 states and Washington, D.C.2Lincoln Institute of Land Policy. Achieving Lasting Affordability through Inclusionary Housing A follow-up study just two years later counted 886 programs in 25 states.3Lincoln Institute of Land Policy. Inclusionary Housing in the United States: Prevalence, Impact, and Practices The jump reflected both new program adoption and better data collection.
How Inclusionary Zoning Spread Internationally
The idea has traveled well beyond the United States, though on a different timeline. Malaysia adopted a form of inclusionary housing as early as 1982. The United Kingdom brought in its version around 1990, and Spain’s Basque Region followed in 1994. Ireland established a national framework in 2000, and various Italian cities adopted programs in the early 2000s. Canadian provinces including British Columbia and Quebec created their own versions between the late 1980s and mid-2000s. The details vary substantially country to country, but the core concept of leveraging private development to produce affordable housing has proved portable.
Where Fifty Years Has Landed the Policy
The most recent comprehensive national count found 1,019 inclusionary housing programs across 31 states and the District of Columbia as of the end of 2019.4Grounded Solutions Network. Inclusionary Housing in the United States That number has almost certainly grown since, as housing affordability pressures have intensified across most metropolitan areas.
In terms of output, a 2017 national study documented at least 173,707 affordable units produced through inclusionary housing, including roughly 49,000 homeownership units and 122,000 rental units. Those figures are acknowledged underestimates because of incomplete reporting, and they don’t include additional units built with the roughly $1.7 billion in in-lieu fees collected by local governments.3Lincoln Institute of Land Policy. Inclusionary Housing in the United States: Prevalence, Impact, and Practices California, New Jersey, and Massachusetts account for the largest share of those units, reflecting both their longer histories with the policy and their high housing costs.
So the short answer is fifty years and counting, with Montgomery County’s 1974 program as the recognized starting point, parallel California experiments in the same decade, the Mount Laurel decisions providing legal muscle in the late 1970s and 1980s, steady national expansion through the 1990s and 2000s, and more than a thousand active programs today.