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Incentives to encourage the development of lower-cost housing types overview

In many cities, towns and counties, it can be difficult to finance and develop lower-cost housing types, such as multifamily housing, micro-unit, single-room occupancy development, and accessory dwelling unitA small, self-contained unit inside of, or attached to a larger single-family home..

The development process can be particularly challenging in built-out urban environments, where land is often more costly and neighborhood opposition can derail a project.

After taking the important first step of reviewing regulations to reduce barriers to development, local jurisdictions may find that additional incentives are required to encourage the creation of lower-cost homes. Incentives such as tax abatementReduction or elimination of taxes granted to property owners by the government in order to stimulate publicly beneficial activities, such as investment in capital equipment.s and streamlined permitting processes aim to stimulate the development of housing types that are more likely to be affordable to low- or moderate-income households. They are similar to the incentives offered to developers of dedicated affordable housing, but do not come with restrictions on rents or home prices.

Additional Resources

Administering agencies

Planning department/zoning commission, local department of housing or community development.

Policy objectives

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