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Inclusionary Zoning Fee In Lieu Calculator
Many cities allow developers to pay fee instead of providing affordable units on-site.
Fee-in-lieu total
$9,375,000
On-site total cost
$6,750,000
Fee vs on-site
-$2,625,000
How the math works
Affordable units = project × set-aside %. Fee = units × per-unit fee.
250 × 15% = 37.5 × $250k = $9.375M fee vs 37.5 × $180k = $6.75M on-site (savings $-2.6M).
How to Use
- Enter project units.
- Enter IZ set-aside %.
- Enter per-affordable-unit fee.
- Enter on-site affordable unit cost premium.
- Read fee vs on-site cost comparison.
Frequently Asked Questions
IZ programs?
Inclusionary Zoning: requires market-rate developers to include affordable units or pay fee. Typical: 10-25% affordable set-aside in new multifamily. Affordable = 60-80% Area Median Income (AMI) rent typically. NYC, SF, Boston, DC, Chicago, LA: major IZ programs. Newer cities adopting: Austin, Denver, Nashville, Charlotte. Fee-in-lieu option common.
Fee-in-lieu amounts?
SF: $200-500k per affordable unit equivalent. NYC: $160-400k. Boston: $300-600k. Chicago: $100-300k. DC: $150-400k. LA: $25-150k (site-specific). Seattle: $125-325k. Austin: $50-125k. Denver: $50-125k. Fee is a proxy for cost of on-site affordable production. Higher than on-site provision cost: incentivizes on-site. Lower: incentivizes fee payment.
Developer choice?
On-site: units at subsidized rent. Long-term operational burden. Administrative complexity. Rent 30-70% below market for 30-50 years. Off-site: build affordable at cheaper site (rare, usually through non-profit partner). Fee-in-lieu: single payment, no operational burden. Simpler for developer. Cities often prefer on-site (mixed-income neighborhoods) but accept fees.
Project economics?
On-site: 20% affordable units × 30% rent discount = 6% revenue reduction. Stabilized NOI drops 4-8% typically. Fee-in-lieu: single payment $1-5M (scales with project). Annual equivalent cost: 4-8% of NOI when amortized. Similar total impact. Fee-in-lieu often preferred for: high-end Class A projects where rent compression would most damage branding.
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