Best Practice

Developer Subsidies

Developer subsidies can incentivize the creation of new affordable units through tax credits, grants, expedited approvals, or specific zoning/fee exemptions. This decreases the costs of (re)development and construction, which usually results in an increase in supply of new housing units. Local incentives are the most common type; state and federal funds are often procured through designations; federal programs like LIHTC can be very competitive.

Cost

Consider opportunity costs of lost local tax revenues versus what is gained from potential development. Management and procurement of subsidies can require significant staff time investments.

Timeframe

Local policy changes can usually be put in place within one year. Procurement of state and federal funds can take at least a year. Development incentives are usually limited to specific timespans, which vary by type.

Code

Government, Housing Supply, New Development, Ownership, Redevelopment

Challenge

New Development

Practice Tool

Financing, Policy / Regulation

Population

All Residents, Developers

Setting

Urban and Rural