What Is Mandatory Inclusionary Housing? NYC’s MIH Program, Its Options, and What a Building Must Do
Mandatory Inclusionary Housing explained: NYC's 2016 zoning rule, the four MIH options and their AMI levels, where it applies, and what HPD requires of you.
Updated September 2026. Appendix F of the Zoning Resolution, the list fixing which parts of the city are MIH areas and which options apply in each, was last amended on August 13, 2026. The affordable housing fund schedule that lets the smallest MIH projects pay instead of build runs from July 1, 2026 through June 30, 2027, at $1,150 per square foot in the top tier. Past that stage already? See how the NYC housing lottery works.
Mandatory Inclusionary Housing is the reason a new apartment building in a rezoned part of New York City contains income-restricted apartments. It is not a subsidy and not a tax break, and it is not optional. Inside an MIH area, a share of the residential floor area must be permanently affordable, or there is no permit.
What is Mandatory Inclusionary Housing?
MIH is a zoning text amendment, approved by the City Council with modifications on March 22, 2016. The Department of City Planning calls it a zoning tool, built with the Department of Housing Preservation and Development, “that ensures that a share of new housing in communities rezoned for growth is permanently income-restricted and affordable.” Inside a mapped area, any development, enlargement or conversion above 10 units or 12,500 square feet is caught.
Three things set it apart. It is mandatory, unlike the Voluntary Inclusionary Housing program of 1987, which traded a density bonus for affordable units. It is permanent, with, in DCP’s words, “no expiration dates.” And it takes a rezoning: every land use action applying MIH runs through ULURP.
The text itself moved on December 5, 2024, when City of Yes for Housing Opportunity rewrote the Inclusionary Housing rules into Section 27-00. Sites under a regulatory agreement that day, or whose regulatory agreement is executed and recorded on or before December 5, 2026, stay with the old Sections 23-154 and 23-90; everything else uses HPD’s forms dated April 2025 or later (the stacking charts were updated in August 2026).
What are the MIH options, and what does each require?
The options for a given area are settled in public review and written into Appendix F. If an area carries more than one, the developer picks. The Zoning Resolution numbers them; the City Council, which added the third and reshaped the fourth in 2016, named Option 3 the Deep Affordability Option and Option 4 the Workforce Option.
| Option | Share of floor area | Weighted average AMI | Limits |
|---|---|---|---|
| Option 1 | 25% | 60% of AMI or lower | Up to 3 income bands. At least 10% of floor area at 40%. No band above 130%. |
| Option 2 | 30% | 80% of AMI or lower | Up to 3 income bands. No band above 130%. |
| Option 3, Deep Affordability | 20% | 40% of AMI or lower | Up to 3 income bands. No band above 130%. No public funding, unless HPD finds it necessary for affordable housing beyond the required floor area. |
| Option 4, Workforce | 30% | 115% of AMI or lower | Up to 4 income bands. At least 5% of floor area at 70% and 5% at 90%. No band above 135%. No public funding. Not available in the Manhattan Core, Manhattan Community Districts 1 through 8. Only mappable alongside Option 1, 2 or 3, and expires 10 years after the amendment establishing or renewing it in that area. |
| Affordable housing fund | Payment instead of units | Not applicable | Only where the project adds no more than 25 dwelling units and under 25,000 square feet of residential floor area. The payment approximates the cost of that floor area in the same community district. |
Affordable units built on another zoning lot must be in the same community district or within half a mile into an adjacent one, and 5 percent is added to the requirement. A project already under an affordable housing regulatory agreement can comply that way instead.
Where does MIH apply in New York City?
Appendix F is the answer, and it is a list rather than a description: MIH areas by zoning map and community district across all five boroughs, with the income mix options for each. It was last amended on August 13, 2026. MIH also reaches special purpose districts, City Planning Commission special permits under Section 74-06, and waterfront areas under Section 62-831.
A project escapes MIH only if it adds no more than 10 dwelling units and no more than 12,500 square feet of residential floor area on a zoning lot that existed when the area was established, so crossing either number pulls it in. Buildings holding only affordable independent residences for seniors are exempt, and the Board of Standards and Appeals can waive the requirement by special permit under Section 73-623.
How do MIH, the Universal Affordability Preference and 485-x fit together?
UAP arrived with City of Yes for Housing Opportunity, adopted by the City Council on December 5, 2024. HPD draws the line cleanly: UAP lets buildings in medium and high-density districts outside MIH areas add at least 20 percent more housing, provided the extra homes are permanently restricted at an average of 60 percent of AMI. HPD administers both programs.
485-x is a state tax exemption, not zoning. Real Property Tax Law Section 485-x was adopted April 20, 2024, with HPD’s rules following on December 16, 2024. It covers buildings of six or more units starting after June 15, 2022 and no later than June 15, 2034, finishing by June 15, 2038. A rental project of 100 or more units takes a 35-year benefit for restricting 25 percent of the units at an average of 80 percent of AMI, permanently affordable and permanently rent stabilized.
Watch the unit of measure. MIH counts residential floor area; 485-x counts dwelling units. Restricting a quarter of the floor area does not restrict a quarter of the apartments. Both can bind the same building. Our page on what 485-x is works through the options.
What does the developer actually have to do?
The HPD sequence is strictly ordered. The developer files an MIH application. On approval, the owner executes an HPD-approved restrictive declaration and records it “as a restriction running with the land.” HPD then issues a Permit Notice stating the affordable floor area, which unlocks the new building permit; a Completion Notice after construction unlocks the certificate of occupancy. Fees are $100 for the application, $100 for the construction sign, and $1,100 per affordable unit.
The design rules travel with that filing. At least half the MIH units must be two-bedrooms or larger and three quarters one-bedroom or larger, unless the bedroom mix matches the market-rate units. Units must be spread across at least 65 percent of the residential stories, and no more than two thirds of any floor can be MIH unless every floor exceeds two thirds. The MIH units of each bedroom size must average at least the smaller of the market-rate average and HPD’s minimum, 400 square feet for a studio up to 950 for a three-bedroom.
Rents come off the Area Median Income schedule, currently mid-transition: HPD cut the studio household factor from 0.7 to 0.6 in the 2026 AMI and is allowing either year until the 2027 AMI is adopted.
Who leases the affordable units, and who watches them afterwards?
The zoning is blunt about the ongoing duty. On rent-up and at every later vacancy, for the entire regulatory period, an affordable unit may be leased only to a household inside the income band set for it. That is a permanent operating condition, not a lease-up task.
Two roles carry it. If the units go through a City lottery, the marketing agent follows the HPD and HDC Marketing Handbook and sits on HPD’s Marketing Agent Pre-Qualified List, and applicants come through NYC Housing Connect, the City’s affordable housing portal. The administering agent then carries the building for the life of the restriction: rental and re-rental, lease review, tenant selection, income verification, ongoing compliance. A 485-x project on Option A or B also files a Notice of Intent to begin marketing and a contract with an approved Marketing Monitor.
MGNY does both jobs, as an approved HPD Marketing Agent taking the lottery through to move-in and as an HPD-approved Marketing Monitor, covering re-marketing, HPD approval of every applicant before a lease is signed, and quarterly rent rolls.
What does it cost to ask MGNY?
Nothing. A real person answers at (212) 343-1111, right away, and the consultation is free. You engage us only if you want the work handled for you. MGNY has worked NYC property tax since 2008, with $50M+ in tax refunds secured for owners, 900+ developments with tax abatements secured and $30B+ represented in appeals.
Sitting on a site in an MIH area? Get the option and the unit math right before you file.
Call (212) 343-1111 and we will read the Appendix F entry with you, or see how we handle marketing and lease-up.
Sources, all read September 2026: NYC Department of City Planning’s Mandatory Inclusionary Housing and City of Yes for Housing Opportunity pages; the Zoning Resolution at zr.planning.nyc.gov, Article II Chapter 7 and Appendix F (last amended August 13, 2026); HPD’s Inclusionary Housing, Marketing, Administering Agents, Housing Connect and 485-x pages, its April 2025 MIH and UAP fact sheets and the MIH In Lieu Fee Schedule FY 2026-27; NYS Real Property Tax Law 485-x; and the City Council’s MIH page. MGNY Consulting is a private consulting firm and is not affiliated with the NYC Department of City Planning or the NYC Department of Housing Preservation and Development.
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