Utilize Tax Increment Financing to Fund Affordable Homes
Municipalities increasingly use tax increment financing to fund community development initiatives, including production of affordable homes. Improvements are paid for by borrowing against the anticipated increase in property tax revenue.
Stimulate Construction or Rehabilitation Through Tax Abatements
Tax abatements involve freezing or lowering property taxes on a specified lot for a designated period of time. Abatements can be offered to encourage construction or rehab of rental homes, or to help homeowners stay in their homes.
Create or Expand Dedicated Housing Trust Funds
Housing trust funds are flexible sources of financing for affordable homes, and work best when supported by a stable, dedicated funding source. Trust funds can be a useful tool for supplementing other housing programs.
Establish Inclusionary Zoning Requirements or Incentives
Inclusionary zoning policies help ensure that a modest share of homes within new developments will be affordable to working families. Whether mandatory or voluntary, these policies generally offer cost offsets and other benefits to participating developers.
Use Cross-Subsidies to Support Mixed-Income Communities
In strong housing markets, non-profit or mission-driven developers can use profits from the sale or rental of market-rate homes to subsidize the development cost of affordable homes.