Housing Vouchers (or demand-side subsidies) as an Alternative to Inclusionary Zoning

Critics of the inclusionary housing approach often cite housing vouchers as a better alternative to provide subsidies for affordable housing. The alternative choice to inclusionary zoning (IZ)—or project-based housing assistance—is tenant-based assistance, which operates on the demand side of the housing market. Demand-side aid most commonly takes the form of government provision of housing vouchers to eligible households. If and when a voucher recipient finds a private landlord willing to participate in the program, the tenant pays a set percentage of the household’s monthly cash income toward the monthly rent, and the government pays the remaining balance directly to the landlord.

Section 8, the principal housing voucher program in the United States, fixes the recipient’s share of the rent at 30 percent of monthly income. Housing vouchers typically are portable in the sense that the benefit travels with the recipient. Vouchers are designed to give recipients more choices among the dwellings within the stock of existing housing. IZ, by contrast, attempts to influence the design and distribution of dwelling units in the relatively small flow of newly constructed and substantially rehabilitated buildings.