Inclusionary Zoning, Impact-Fee Waivers, and Tap Credits: Local Policies That Cut New-Build Costs

If you build new housing for a living, you already know that land and framing lumber get too much of the blame for total cost. A surprising chunk lives in local policy: inclusionary zoning requirements, impact fees, and utility connection charges. The good news is cities and utilities also offer tools that can offset those costs—sometimes dramatically. I’ve watched developers shave six figures off small infill projects, keep deals alive that otherwise wouldn’t pencil, and even win competitive land bids because they understood how to capture fee waivers and tap credits. This guide distills the playbook: how these programs work, where they go wrong, and how to win with them without getting stuck in compliance quicksand.

The toolbox at a glance: what cuts costs and why it exists

Local governments have three big levers that affect your pro formas:

• Inclusionary zoning (IZ): requires or encourages a percentage of below-market homes in exchange for incentives like density, height, and parking reductions—or lets you pay a fee instead. When structured well, IZ can be a growth tool instead of just a cost.
• Impact fee waivers/reductions: discounts on development impact fees, permit fees, or system development charges (SDCs) for projects that deliver public benefits (affordable units, workforce housing, green building, infill).
• Tap credits and utility capacity: credits for water and sewer capacity that’s already on a site—or that you built for the system—that reduce or eliminate new connection charges and meter fees.

These tools exist for practical reasons: cities need housing, want infrastructure paid for, and have to keep monthly bills affordable for residents. If they help you reduce up-front costs without raising taxes, that’s a win. Your job is to package the benefits so your lender, appraiser, and equity can clearly see the improved returns.

Why it matters: the fee stack is bigger than many budgets assume

Every market is different, but fee burdens are rarely trivial.

• Residential impact fees and SDCs can run from 6% to 18% of total development costs. Studies from the Terner Center have found per-unit fees in California ranging from $20,000 to over $100,000 depending on location and building type.
• Water and wastewater connection charges (tap fees, capital recovery fees) often range from $4,000 to $30,000 per unit, but can be higher with larger meters, high-growth suburbs, or resort towns.
• Permit and plan review fees frequently land in the $2,000–$10,000 range per unit for multifamily, and $2,000–$8,000 for single-family infill (not counting school fees in school-impact-fee states).
• Parking minimums add real money. One underground stall can easily cost $45,000–$70,000; a structured stall $25,000–$45,000. Reductions tied to IZ can dwarf fee savings.

On a 60-unit wood-frame infill building, I commonly see a $900,000–$1.8 million line item for fees and connections. If you can attack half of that, you usually rescue the capital stack.

Inclusionary zoning: from obligation to opportunity

The basic models

• Mandatory set-aside: You must provide, say, 8–20% of homes at restricted rents or prices.
• Voluntary incentives: You can opt in to extra density, height, reduced parking, or fee reductions by providing affordable units.
• Fee-in-lieu: Pay a per-square-foot or per-unit fee instead of building affordable homes on site.
• Off-site compliance: Deliver the affordable units on a different property or dedicate land.

Common affordability targets:

• Rental: 50%–80% of Area Median Income (AMI); duration 30–99 years.
• Ownership: 80%–120% of AMI with a lasting deed restriction or shared-equity model.

Typical incentives:

• Density bonus (extra units or FAR).
• Height increase (one to two stories).
• Parking minimum reductions.
• Fee reductions or waivers.
• Expedited permitting.

A good IZ ordinance is a trade: you create value with extra buildable area or lower parking and trade some of that value for affordability. A bad ordinance is a straight tax with no real offsets. Make sure you know which one you’re dealing with before you bid on land.

How IZ changes the math—and how to make it pencil

The big levers are density, parking, and time. A height bonus that gives you another level of wood-frame construction on a podium can add 10–20% more homes with only a modest bump in cost. Combine that with parking reductions (or a transit overlay that allows zero minimums), and your hard cost per net rentable square foot can fall.

Example:

• 60-unit baseline, 1.0 parking ratio, 12 stalls go underground: $600,000 cost.
• Choose on-site 10% affordable at 80% AMI.
• City grants one-story height bonus and 0.5 parking minimum: you add 12 units and avoid underground parking entirely.
• Net result: +12 market units, -$600,000 parking cost, +$300,000 in rents per year (assuming market-rate units at $2,100). Affordable units reduce some rent, but you added volume and saved parking. Frequently, the NOI lift covers the affordability drag and more.

If the only option is a fee-in-lieu with no added density, run the sensitivity. Some markets have high enough fee-in-lieu rates that paying the fee is cheaper than carving out rent-restricted homes (especially in condo buildings where restricted units impair sale value and HOA allocations). In others, on-site is the clear winner.

Compliance checklist so you don’t get tripped up later

• Pre-application meeting: Ask for the inclusionary staff person and request the current affordability worksheet, rent and price tables, utility allowance schedule, compliance calendar, and example covenants.
• Choose a path early: On-site, off-site, or fee-in-lieu. Document in your land-use application.
• Lock the AMI and term: Ordinances often update annually. You want the schedule you underwrote to be what the covenant reflects.
• Marketing and lease-up plan: Fair-housing-compliant advertising, waitlist procedures, and third-party income verification. Some cities require a housing authority or certified administrator.
• Utility allowances: For rentals, the gross rent limit minus utility allowance equals the max tenant rent. I’ve seen operators mistakenly charge up to the gross cap and blow compliance.
• HOA structures for ownership: Budget the HOA-to-unit allocation; restricted-ownership units often need lower HOA dues or city subsidy to remain affordable long-term.
• Reporting: Annual certifications, rent roll attestation, and compliance audits. Pencil in staff time or a third-party compliance manager ($15–$40 per unit per year is common).

Common pitfalls:

• Underestimating staff time for ongoing certification.
• Setting affordable parking fees too high (they count toward housing cost in some programs).
• Not coordinating inclusionary timing with your Certificate Of Occupancy—some cities require proof of recorded covenants before final inspections.

Examples worth benchmarking

• Seattle’s Mandatory Housing Affordability: Payment or performance with specific rates by zone; structured to deliver on-site units or fees as a function of the upzone. Developers often mix performance in high-rent submarkets and payment in edge neighborhoods; the economics swing by block.
• Denver’s Expanding Housing Affordability: Requires on-site units at certain AMI levels for larger projects, with a fee alternative; permits density and parking flexibility in exchange. I’ve seen projects stack EHA with local tax increment financing to keep pro formas happy.
• Portland, OR: Portland’s inclusionary policy triggers at 20+ units, paired with SDC waivers for regulated projects and parking reductions near frequent transit, which often makes on-site performance the better deal than paying the fee.

Policy shifts happen. If you’re closing land in a jurisdiction debating new IZ rules, add a contract contingency tied to the policy outcome or price-in a risk reserve.

Impact-fee waivers and reductions: where “free money” is actually real

What can be waived

• Transportation, parks, and open space impact fees.
• Water, sewer, and storm system development charges (sometimes via a separate affordable-housing exemption).
• Building permit, plan review, and inspection fees.
• School fees (rare; more common is a reduction for senior housing or deed-restricted units where allowed).
• Affordable housing linkage fees (some cities offer reductions for deeper affordability).

Programs go by many names: workforce housing waivers, S.M.A.R.T. Housing (Austin), affordable SDC exemptions (Portland), impact fee deferrals (many Florida and Colorado cities), or growth-management fee reductions (various counties).

Who qualifies

• Projects with deed-restricted units at specified AMI levels and durations.
• Nonprofit developers or mixed-income projects where a percentage meets affordability requirements.
• Infill developments aligning with comprehensive-plan goals (near transit, in designated redevelopment areas).
• Green building or energy-efficient projects (less common, but I’ve seen 10–50% reductions on the table).

Savings ranges I’ve seen in practice:

• Permit and plan review fees: 25–100% waived for affordable projects.
• SDC/impact fee waivers: $10,000–$40,000 per affordable unit is typical in high-fee metros.
• Deferrals: Fees due at certificate of occupancy instead of at permit issuance can shave months of interest carry.

How to actually get the waiver

• Confirm funding source: Many programs have a finite annual budget; waivers are first-come, first-served. Ask when the fiscal year resets and whether reservations are possible.
• Apply early: Some require city council approval or a housing department award, which can take 4–12 weeks.
• Lock in AMI commitments: Your fee waiver is tied to your recorded covenant. If your unit count, bedroom mix, or AMI shifts, you may lose eligibility or have to repay.
• Coordinate with valuation: Some lenders discount the value of waivers; others treat them like grants. Provide award letters and executed agreements to avoid confusion at closing.

Watchouts:

• Sunset clauses and mid-year program pauses when budgets run dry.
• Payback obligations if you convert units or sell within a compliance period.
• Stacking rules: Some cities let you combine waivers with tax increment financing or state credit programs; others cap the total public benefit.

Real-world scenarios

• Austin S.M.A.R.T. Housing: I’ve seen mid-rise projects get building permit fee waivers, expedited review, and water/wastewater capital recovery fee exemptions for income-restricted units. Combined savings in the $10,000–$20,000 per affordable unit range, plus weeks shaved off the review queue.
• Portland SDC Exemptions: Regulated affordable projects can qualify for 100% SDC waivers across parks, transportation, water, and sewer. I’ve watched 40–80 unit projects save $15,000–$30,000 per unit. ADU SDC waivers (when active) saved homeowners $12,000–$20,000 per ADU.

Tap credits and utility capacity: the quiet hero of infill deals

If you remember one thing from this section: always investigate existing water/sewer service on a site before you write an offer. I’ve seen buyers overpay for lots while ignoring $30,000 in transferable capacity sitting in the ground.

What are tap credits?

Utilities charge connection fees (capital recovery fees, capacity charges, or SDCs) based on meter size, fixture count, or equivalent residential units (ERUs). When a site already has a service—say a 5/8″ meter—and the previous owner paid those charges, you may be able to apply that capacity to your new project. That’s a “tap credit.” You either:

• Reuse the existing connection and pay only for upsizing (the differential between old and new meter size), or
• Receive a credit (in ERUs or dollars) applied to new fees, sometimes transferable within the same utility’s service area.

Some utilities also issue credits when you construct public infrastructure (upsizing a main, building a lift station). Those credits are often bankable and assignable.

How credits are calculated

• Meter-size equivalency: A 5/8″ meter counts as 1 ERU. A 1″ might count as 2.5–3.0 ERUs. If you upgrade, you pay the difference.
• Fixture unit counts: Some jurisdictions calculate based on plumbing fixtures; credits match the prior permitted fixtures.
• Service class: Residential to residential transfers are easy; commercial-to-residential may require a conversion factor.

Key variables:

• Expiration: Credits may expire after a certain period (often tied to service inactivity, 3–10 years).
• Transferability: Some utilities allow off-site transfer; others restrict to the parcel.
• Documentation: You need proof of prior payment or a letter of credit from the utility.

Practical use cases

• Single-family scrape-and-new-build: Existing 5/8″ meter. You plan a new 2-story home needing a 3/4″ meter. The utility charges $8,000 for a 5/8″ and $12,000 for 3/4″. You pay only the $4,000 differential. Plus a few hundred bucks for the setter and box if reused.
• Subdivide a lot into four townhomes: If the old house had a 1″ meter credited at 2.5 ERUs and each townhome needs 1 ERU, you might allocate 2.5 ERUs as credit across the four connections and pay 1.5 ERUs new. Utilities vary on whether you can split credits; many will, if you ask early.
• Change of use: Converting a restaurant to apartments. The restaurant had high wastewater loading credits; sometimes the apartment load is lower and you carry forward the difference, which can reduce or eliminate capacity charges.

How to secure and monetize credits

• Due diligence checklist:
• Ask the seller for the utility billing account number and service history.
• Request utility “will-serve” and “capacity credit” letters during feasibility.
• Pull old permits to confirm meter size and any SDC payments.
• Verify whether abandonment or demolition canceled credits.
• Contract language:
• Condition closing on written confirmation of transferable credits.
• Require seller cooperation to assign credits, including signing utility forms.
• If credits are uncertain, price a holdback or purchase price adjustment.
• Work with civil early:
• Meter sizing by your MEP engineer drives costs. Right-size to avoid upsizing you don’t need.
• Consider dual meters or a manifold approach in townhome projects; some layouts let you use smaller meters and maximize credit coverage.

Common mistakes:

• Demolishing the house and removing the meter before the utility inspects and tags credits.
• Missing an expiration date and losing the ability to transfer.
• Upsizing meters “just in case.” Bigger isn’t better if it costs thousands more and you don’t need the flow.

Timelines: how long these processes actually take

• Inclusionary compliance plan approval: 2–6 weeks in most cities; can be longer if you need council action or a design review board.
• Fee waiver awards: 2–12 weeks depending on program. Some are administrative; others require board approval.
• Utility credit verification: 1–4 weeks, assuming the utility can locate payment records or service logs.
• Covenant drafting and recording: 1–3 weeks after you finalize terms. Don’t leave it to the last day before your C of O.

Build these into your project schedule and carry cost assumptions. A one-month delay that could have been prevented with an earlier application will eat the savings.

Stacking strategies: combine tools for outsized results

Here’s the hierarchy I use in predevelopment:

1. Capacity credits: Confirm what you have on site. They influence design (meter sizing, unit count, subdivision layout).
2. IZ path selection: Choose performance vs payment based on whether bonuses help you. Try to get parking reductions—the savings are huge.
3. Fee waivers: Apply for everything you might qualify for, but know the stacking rules. Some places cap the combined value at, say, 75% of fees.
4. Schedule advantage: Pursue expedited review. Cutting two months of interest carry on a $10 million construction loan at 8% saves roughly $133,000.
5. Bonus density monetization: Ensure the extra units actually fit the site and work with the structural system you planned. One extra wood level is fantastic; forcing a Type I podium change rarely pencils.

Case studies from the field

Case study 1: 60-unit infill, mid-rise wood frame over podium

• Location: Transit-rich neighborhood in a Tier 1 growth city.
• Baseline: 60 units, 1.0 parking ratio, $600,000 projected for underground stalls.
• IZ: City requires 10% at 80% AMI or allows a $22/sf fee-in-lieu. Incentives include one-story height bonus and 0.5 parking minimum near transit.
• Strategy: Choose on-site performance. The bonus adds 12 market-rate units. Parking drops to a surface podium with tuck-under, eliminating underground.
• Fees and waivers:
• SDC exemption for regulated units: $18,000 per affordable unit x 6 = $108,000 saved.
• Plan review and permit fee waiver: 50% off for the affordable portion = $75,000 saved.
• Utility connection: Existing 1″ service from a demolished commercial building gave 2.5 ERUs; project needed 3.0 for the domestic line; paid only 0.5 ERU difference, saving $24,000.
• Net impact:
• +12 market units valued at $275,000 per unit in residual land terms = $3.3 million of added value.
• -$600,000 in parking costs.
• +$207,000 in fee/tap savings.
• Affordable rents reduce NOI by about $120,000/year compared to all-market, but the added units more than compensate.
• Result: Debt coverage strengthens from 1.18x to 1.32x; equity IRR lifts ~180 bps.

Case study 2: 12-townhome infill, fee-heavy suburban city

• Baseline: 12 fee-simple townhomes, 3BR each.
• Fee environment: $24,000 per unit in impact fees (transportation, parks), $9,000 per unit water/wastewater capacity, $3,500 permit and plan review per unit.
• Strategy:
• Affordable carve-out: Deed-restrict 2 units at 100% AMI for 30 years to qualify for partial impact fee waivers (a local workforce program).
• Tap credits: Prior duplex had a 1″ meter with 2.5 ERUs. The project needed 12 ERUs total (12 x 1). Credit reduces new capacity to 9.5 ERUs.
• Savings:
• Impact fee waiver: 50% reduction for the two workforce units = $24,000 saved.
• Utility capacity: 2.5 ERUs x $9,000 per ERU = $22,500 saved.
• Permit fee discount for mixed-income: 25% reduction on those 2 units = $1,750 saved.
• Result: ~$48,000 total savings cover landscaping upgrades and a modest HOA amenity, improving marketability and reducing price pushback.

Case study 3: Small nonprofit developer, 24-unit garden apartments

• Baseline: All units at 60% AMI; project tight due to rising sitework costs.
• Programs:
• SDC exemptions for regulated units from water, sewer, transportation, and parks: $22,000 per unit.
• Permit fee waiver: 100% for accredited nonprofit partners.
• Expedited review: 4-week priority lane.
• Utility coordination:
• The site had been a motel with large wastewater load. The utility confirmed 12 ERUs of credit. The new project needed 18 ERUs; only 6 to purchase new.
• Savings:
• Fees: $528,000 SDC waivers + $84,000 permit fee waiver.
• Utility credits: 12 ERUs x $6,500 = $78,000 avoided.
• Time: One-month faster permit saved ~$40,000 in interest carry.
• Result: The gap shrank by $730,000, enough to close without additional soft funds.

Step-by-step: your 90-minute incentive reconnaissance

If you’re evaluating a site and need a quick read:

1. Open the city’s planning and housing department websites. Search for “inclusionary,” “affordable housing incentives,” and “impact fee waiver.”
2. Note thresholds: number of units that trigger IZ, what AMI levels qualify, fee-in-lieu amount, and any height or parking bonuses.
3. Download the current rent/price limits and utility allowance tables.
4. Check the water/wastewater utility’s “capital recovery fee” or “system development charge” page. Find: – Fee schedule by meter size. – Rules on credits and transfers. – Contact for capacity verification.
5. Email the development services “navigator” or pre-application desk: – Provide a one-page summary (units, height, parking, affordability concept). – Ask for a 20-minute call to confirm incentive eligibility and timelines.
6. Call the utility engineering desk. Ask: – Does the parcel have existing service? What meter size? Any credits on record? – What documentation do you need to validate credits?
7. Note whether programs have annual caps or cyclical funding. Ask when the next cycle opens.
8. Confirm stacking rules: Can you combine SDC waivers with an inclusionary density bonus? Any limits?
9. Add a pro forma row for “public benefits”: IZ bonus value, fee waivers, tap credits, and schedule savings. Don’t forget compliance costs.
10. If the numbers look promising, schedule a formal pre-app and lock a path before you finalize land pricing.

Pro tip: Put the city’s incentive commitments in writing. An email from the program manager referencing your project and the applicable code section is worth its weight in equity confidence.

Designing for incentives: architecture and MEP decisions that save fees

• Right-size meters and service lines: Work with your MEP to reduce domestic demand through efficient fixtures and staggered peak loads. Dropping from a 1″ to 3/4″ meter can save thousands.
• Unit mix alignment: If an SDC waiver applies only to regulated units, consider making the larger family units the affordable ones if the waiver is per-bedroom or per-SF.
• Parking strategies: If the inclusionary bonus offers parking reductions, design for it from day one. Shifting a half-level of underground parking to surface podium can be a six-figure swing.
• Modular or panelized with expedited review: Some cities offer a separate expedited track for industrialized housing. Pairing faster review with IZ incentives creates real schedule savings.

Finance and appraisal: making your lender an ally

Lenders and appraisers can be skeptical about program benefits unless you package them clearly.

• Provide official documentation: Award letters, program guidelines, and executed agreements.
• Translate benefits to DSCR: Show how fee savings reduce total development cost and how parking reductions increase NOI.
• Address affordability covenants: Include a legal memo on lien priority and covenant term. Most covenants are subordinate to construction financing if drafted properly.
• Model compliance costs: Set aside $25–$50 per regulated unit per month for admin and turn costs—then show the net benefit still holds.

I’ve seen appraisals improve when IZ bonus density creates additional income units; a good MAI appraiser will reflect that in stabilized NOI and cap it appropriately.

Regional quirks and legal guardrails

• California: Fees can be very high; SDC and impact-fee waivers are powerful. Inclusionary rules are common, and state Density Bonus Law can add substantial units for deeper affordability.
• Florida: Mandatory inclusionary zoning must provide full offsets or incentives to cover the cost impact (per state law), so programs are often voluntary or paired with generous bonuses.
• Texas: Rent control is prohibited; inclusionary provisions often rely on voluntary incentives. Austin’s S.M.A.R.T. Housing is a strong fee-waiver program tied to income restrictions.
• Colorado, Oregon, Washington: Robust use of SDC systems and credits; inclusionary frameworks vary by city. Portland and Seattle have established menus worth studying.

Always check the most current municipal code and utility tariffs. Policies shift.

Common mistakes—and how to avoid them

• Assuming credits transfer automatically. They don’t. Get the utility’s letter.
• Overpromising affordability to win a fee waiver, then discovering your lender won’t accept the NOI hit. Align with capital first.
• Missing application windows for limited funds. Calendar reminders save money.
• Mispricing affordable rents by ignoring utility allowances. Use the official schedule.
• Letting IZ design decisions creep late in design, forcing structural changes. Decide before schematic design lock.
• Not provisioning for compliance staff time. Budget and hire early.
• Paying fee-in-lieu when on-site performance plus a height bonus would have made more profit. Model both paths before deciding.

Negotiation and advocacy: small changes, big differences

If you’re active in a jurisdiction:

• Ask for fee deferrals at minimum. Paying at C of O instead of permit issuance is a low-cost ask for cities that preserves your cash flow.
• Propose a “differential-only” utility charge rule written plainly into code. Utilities often do this informally; codifying prevents surprises.
• Advocate for by-right height/parking bonuses near transit with inclusionary performance. Predictability beats variances that burn time.
• Suggest an administrative waiver process for projects under a certain size to avoid council calendars.

Cities often respond well to data. Bring pro formas showing that a half-story bonus plus 0.5 parking can finance deeper affordability than a flat fee-in-lieu.

Numbers to plug into your next pro forma

• Fee reserve baseline:
• Multifamily: $12,000–$80,000 per unit total (all fees, taps, permits), with coastal California and resort towns at the high end.
• Infill single-family: $15,000–$60,000 per home.
• Potential savings:
• Inclusionary bonus value: 5–20% increase in unit count where height and FAR bonuses apply.
• Parking reductions: $25,000–$70,000 per eliminated stall.
• SDC/impact fee waivers: $10,000–$40,000 per affordable unit common.
• Tap credits: $4,000–$30,000 per unit depending on meter size and local fees.
• Expedited permitting: 1–3 months of interest carry; on $15 million at 8%, that’s $100,000–$300,000.
• Compliance cost: $15–$40 per affordable unit per month in admin costs over the life of the covenant (or annualized equivalent; adjust to your staffing).

Use ranges appropriate to your market. Then refine after pre-app meetings.

Advanced: impact-fee credits from public improvements

When you’re required to build public infrastructure beyond your project’s need (oversizing a water main, adding a turn lane), negotiate an impact-fee credit agreement.

• Define the “oversize” portion and its cost basis (unit prices, engineer’s estimate).
• Secure a credit certificate usable against future projects or transferable.
• Lock the credit value and index it to inflation if it won’t be used immediately.
• Confirm which fees the credit can offset (transportation vs water vs general impact).

On multi-phase subdivisions, these credits can be a significant asset. I’ve seen developers trade them at a discount to builders who need them immediately.

Ownership housing specifics: appraisals, HOAs, and resale controls

• Price caps vs market comps: Appraisers must value restricted units under program limits. Be prepared with the city’s pricing worksheet and historical sales.
• HOA dues: Keep dues proportional or create a reduced-assessment class for restricted units if allowed; otherwise, affordability can be undermined.
• Shared-equity and silent second models: Understand how appreciation sharing works so buyers and lenders aren’t blindsided at resale.
• Marketing: Many cities require you to list through a portal and run a lottery. Build the schedule time into your closing calendar.

A simple email template to start the conversation with your city

Subject: Pre-application inquiry – inclusionary/fee waivers/tap credits for [Project Name], [Address]

Hi [Planner/Housing Program Manager/Utility Engineer],

I’m evaluating a [# units], [height/type], near [transit/area]. I’d like to confirm eligibility and process for:

• Inclusionary options (on-site vs fee-in-lieu), bonuses (height, FAR, parking), and current rent/price limits and utility allowances.
• Fee waivers/reductions (SDCs, impact fees, permit/plan review) tied to affordable units or workforce housing.
• Water/wastewater connection fees, existing service details (meter size, ERUs), and any available credits or transfer rules for [parcel ID].

Could we schedule a 20-minute call? I’ve attached a one-page project summary. Thank you.

Best, [Your Name] [Company] [Phone]

Keep it brief and specific. You’ll be surprised how quickly you get the right answers when you ask the right questions.

Quick-reference checklist

• Inclusionary
• Thresholds and AMI targets
• Bonus menu: density, height, parking
• Fee-in-lieu rate and zones
• Compliance documents and utility allowances
• Covenant timing and recording
• Fee waivers
• Program eligibility and stackability
• Budget caps and application window
• Award letters and repayment triggers
• Deferral options to C of O
• Tap credits
• Existing meter size and ERUs
• Credit transferability and expiration
• Upsizing differential costs
• Documentation from utility
• Finance
• Lender/appraiser documentation
• Compliance cost allowance
• Schedule savings reflected in carry
• Design
• Meter right-sizing
• Parking reductions integrated
• Unit mix aligned with waiver calculations

What I’d do first on a new site

• Pull the utility account history and ask for a capacity letter.
• Run two IZ scenarios: pay the fee vs on-site performance with bonuses. Include parking differences.
• Map fee waivers and timing. If there’s a limited pool, get a spot in the queue.
• Adjust land price or contingencies based on the incentives you can actually capture, not a wish list.

I’ve watched more than one deal move from “marginal” to “go” because the team took these steps in the first two weeks, not the last two.

Final thoughts: make public policy work like part of your design team

The best builders I know treat inclusionary rules, fee waivers, and tap credits like an extension of the design process. They sketch massing with density bonuses in mind. They size meters to the ounce. They put grant letters in the loan package, not the appendix. And they rarely leave money on the table.

If you build the habit—ask early, document everything, right-size services, and choose the IZ path that multiplies value instead of taxes it—you’ll consistently shave real dollars off hard and soft costs. That’s how you keep delivering homes people can afford, while protecting your margins and sanity.