Legal Definitions - incentive zoning

Incentive zoning

Incentive zoning is a system that allows landowners to pay a pre-set price to be exempted from certain land-use regulations. This is different from illegal contract zoning because the price is pre-set by the governing board. For example, a city may offer a landowner the ability to build a taller building if they include a public parking garage on the first two levels.

A city has a zoning regulation that limits the height of buildings to two stories. However, they offer an incentive zoning program that allows landowners to build up to three stories if they include a public park on the property. A landowner decides to take advantage of this program and builds a three-story building with a public park on the property.

This example illustrates how incentive zoning works by allowing a landowner to pay a pre-set price (in this case, building a public park) to be exempted from a land-use regulation (the height limit).