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Why only 20%?
There’s a number of programs (like MIRHPP) where the city allows a rental building to be taller in exchange for 20% of the apartments being non-market.
Sometimes people ask, why only 20%? Why not 50% or 100%?
The builder is just a middleman: ultimately, the renters are paying for the construction of the building, through their future rents. (The suppliers of the materials, the construction workers, and the existing homeowners all need to get paid.)
You can have cross-subsidization, for example where the rents from the 80% market apartments are subsidizing the 20% non-market apartments. But I don't see how you can have the entire building be non-market, without requiring a huge amount of public funding. (And people's willingness to pay higher taxes is always limited, which is why we have super-long waiting lists.)
Providing a density bonus (“Vitamin D,” as Michael Mortensen calls it) is a way to make a project with non-market housing economically viable.
Mixed-income developments are the most effective way of getting more non-profit homes built. Jill Atkey and Thom Armstrong, June 2021.