On June 21, 2010, the Town of Chapel Hill enacted an Inclusionary Zoning Ordinance that mandates a set-aside percentage for affordable housing for new residential developments. Projects proposing five or more units will provide 15% (10% in the Town Center) of the units at prices that are affordable to low- to moderate-income households.

Inclusionary zoning is intended to provide an effective means for preserving housing choice and opportunity in Chapel Hill. If the incremental need for affordable housing is not met and affordable housing opportunities are displaced, the following effects to health, safety, or general welfare of the community could be created: 

• Increases in travel time and distances for persons who provide services or are employed in the Town but cannot find decent, affordable shelter, which in turn increases traffic congestion, reduces air and water quality and has an adverse impact on the public health resulting from excessive commuting;
• An imbalance in population diversity; and
• Inconsistency with the vision for future development and the specific policies of the Town’s Comprehensive Plan.

Inclusionary zoning is one part of the Town’s overall affordable housing efforts that aims to accomplish these goals.

The Inclusionary Zoning Ordinance went into effect on March 1, 2011.

The following is an example of how the Ordinance can be applied: If a development application proposes 10 market-rate units and is required to provide 15% affordable units, then the development would be required to provide 1.5 affordable units (the amount of 1.5 is 15% of 10 market-rate units). The development would be required to build one affordable dwelling unit. Then, rather than building half of a unit, the applicant would meet his/her remaining obligation by providing a payment-in-lieu for the half unit. As outlined in the Ordinance, the payment would be calculated based on the amount needed to make a unit affordable (3.10.3(B)(1)). 

Development Bonuses: The Inclusionary Zoning Ordinance provides development bonuses including density bonuses and floor area bonuses. For more information, see Section 3.10.2(d) of the Inclusionary Zoning Ordinance.

Inclusionary Zoning Links 

• Inclusionary Zoning Ordinance
• Inclusionary Zoning Administrative Manual
• Questions and Answers about Chapel Hill’s Inclusionary Zoning Ordinance

For Inclusionary Zoning Program reference materials, please click here.