Inclusionary zoning programs are often said to stifle development, either by driving developers to build where there are no programs, or causing them to increase their prices to cover losses associated with building the affordable housing.
The 2007 Furman Report, which was sponsored by the National Association of Home Builders in the US, presents the most thorough and objective analysis to date on the potential impact of Inclusionary zoning. It examined empirically the impact of inclusionary zoning on the price and production of market-rate housing in the Boston, San Francisco and Washington DC areas.
The study found, at the very worst and in only one of the three market areas, inclusionary zoning had no more than a marginal impact on price and production of market housing. But that finding, based on evidence provided in the report, could be attributed to other reasons – like growth management policies. Furthermore, other evidence also strongly indicates that any potential impact could be mitigated in a well-designed program.