Inclusionary Zoning at risk of repeal

February 23, 2026 Update:

The City of Albany has proposed a reform to the current Inclusionary Zoning ordinance that would make the following changes to the current law:
1. Increase the Area Median Income from 60% to 70%, meaning new developments must be eligible to tenants with higher incomes than before.

2. Rather than the tiered structure which set aside between 7-13% of units in new developments for low income renters, the new ordinance would be a flat 5% for all developments of 20 units or more. However, developers can buy their way out of providing those units to tenants with 70% of AMI by giving the City of Albany $50,000 per unit. For example, if 100 units are being developed, 5 of those would need to be eligible to tenants with an income of 70% of the AMI. Now a developer can pay the City $250,000 (5 units x $50,000) to be exempt from inclusionary zoning.

This is better than the original proposal (see below) by former Mayor Kathy Sheehan, but is still a rollback of inclusionary housing.

The bill also establishes new compliance mechanisms to ensure that if a developer maintains their inclusionary units they are going to eligible households and promoted accurately.

The money a developer would pay to exempt themselves from Inclusionary Zoning would go to the Albany Community Development Agency where a Housing Trust Fund is to be established. The Housing Trust Fund will be overseen by community organizations and members to ensure it goes where its most needed.

In a last minute backroom deal, the Mayor’s office whipped 9 Common Council Members to support an initiative to overturn our local affordable housing ordinance that took years of research and dialogue to win.

The proposal does two things:
1. Raise the income level that inclusionary zoning serves from low-income to median income.
2. Grant developers a buyout mechanism so that they don’t have to build any working class housing.

These changes are a big deal. Developers could pay their way out of providing low-income housing for as little as $5,000 per unit, assuming they’d even need to, since rents would be higher than $2,000 per month under this “affordability” rubric.

Developers already get hundreds-of-thousands of dollars from tax-payer subsidies, and now we’re giving them a cheap ‘out’ at low-income tenants’ expense.

But the deal’s not done.

On December 1, the six dissenting votes proposed compromise piece of legislation that:

• Raises the inclusionary zoning ordinance’s affordable unit Area Median Income from 60% of the AMI to 70%, rather than the proposed 100% AMI that the Mayor’s office rushed through;
• Includes a compliance mechanism to ensure that the affordable units are provided to those who need them most;
• Increases the ‘buy out’ fee from $5,000 or $10,000 to a $25,000 per unit until only 5% of the property is set aside for those who need them, rather than allowing developers to fully exempt themselves from providing low-income housing;
• Ensures that 75% of funds raised via this buy out mechanism support tenant initiatives, and 25% will support low-income homeowner/homebuyer programs.