1. Predictability for Developers:
By establishing clear, consistent incentives—such as expedited permitting, reduced fees, and increased density bonuses—we give developers the certainty they need to invest in housing projects. When developers know what to expect, they can move quickly and confidently.

2. Faster Project Timelines:
Standardizing incentives helps reduce the time spent negotiating unique agreements for every project. This means more housing units can break ground faster, and residents can move in sooner.

3. Focused Affordability Targets:
Our incentive package prioritizes developments that meet affordability goals, including units for low- and moderate-income households, etc. We’re not just building more units—we’re building the right units.

Standardized housing incentives are just one tool in our larger strategy to address the housing crisis. We remain committed to community engagement, thoughtful urban planning, and long-term affordability. These incentives are a catalyst—helping unlock new housing opportunities while ensuring growth benefits everyone.

View the Standardized Housing Incentive Policies Document in full here. 

View Ordinance No. 2025-35 here 

• Affordable Housing Projects
  • Shall be defined as developments in which at least 20% of
    the units are set aside for five years for households earning at or below 80% of the Area
    Median Income (AMI), as defined by the U.S. Department of Housing and Urban
    Development (HUD). Projects may be subject to annual income verification.
    
• City Fees
  • Shall be defined as the various charges imposed by the City for development,
    construction, business operations, and regulatory compliance. These fees include, but
    are not limited to, building permit fees, plan review and inspection fees, zoning and site
    plan review fees, utility connection fees (water, sewer, and stormwater), right-of-way and
    excavation permits, and development fees, and fire and safety inspection fees.
    Additionally, other applicable regulatory or administrative fees established by City
    ordinance may be included. Any fee reductions authorized under this policy apply only to
    fees directly assessed by the City and do not extend to fees imposed by other
    governmental entities or utility providers.
• Low-Income Housing Projects
  • Shall be defined as developments utilizing federal, state,
    or local programs aimed at serving households earning at or below 60% of the AMI.
    Examples include projects financed through the Low-Income Housing Tax Credit (LIHTC)
    program or HUD Section 8 housing.
  Missing Middle Housing
  • Shall be defined as Duplexes, triplexes, fourplexes, and
    accessory dwelling units (ADUs) designed to integrate seamlessly into existing
    neighborhoods while providing additional housing options as defined by or to be
    constructed in areas targeted by the Opticos Missing Middle Housing study. MMH shall be targeted as housing that is affordable for middle-income workers, earning between 80% and 120% of the area median income (AMI) as defined by the U.S. Department of Housing and Urban Development (HUD).
• Multi-Family Housing Projects
  • Shall be defined as residential developments with five (5)
    or more dwelling units on the same site, including apartments, townhomes, and
    condominiums. If the units are not on the same site, the City Council must approve the units being scattered in different parts of the neighborhood or city to qualify as a Multi-Family Housing Project.
• New Subdivisions
  • Shall be defined as developments that involve the establishment of a
    new residential subdivision, including the construction of single-family homes. To qualify for incentives under this policy, such subdivisions must: (1) include a minimum of 50 homes with an estimated market value under $400,000; (2) designate at least 10% of the homes as affordable housing (80% AMI or below) for at least five years; and (3) support the City's goals for responsible growth, sustainability, and integration with existing neighborhoods as defined in the City’s Comprehensive Plan, promoting features such as walkability, environmental sustainability, and a diversity of housing types.
  Single-Family Homes
  • Shall be defined as new single-family residential homes with an
    estimated market value under $400,000. These homes must be designed for households with earnings at or below the Area Median Income level as determined by IHDA and align with the City's objectives for expanding housing affordability while promoting community integration. This category is intended to encourage the development of more affordable options within the single-family housing market.
• Tax Credit Projects
  • Shall be defined as housing developments utilizing tax credits such
    as Low-Income Housing Tax Credits (LIHTC), Historic Preservation Tax Credits, or Senior Housing Tax Credits.
• Workforce Housing
  • Shall be defined as housing that is affordable for middle-income
    workers, earning between 80% and 120% of the area median income (AMI) as defined by the U.S. Department of Housing and Urban Development (HUD).

(i) Affordable Housing Projects

(ii) Workforce Housing

(iii) Low-Income Housing Projects

(iv) Missing Middle Housing

(v) Multi-Family Housing Projects

(vi) New Subdivisions

(vii) Single-Family Homes

(viii) Tax Credit Projects

Qualifying projects may be residential or mixed use and include new construction or adaptive reuse projects that convert existing buildings into qualifying housing projects

Incentives
To encourage and accelerate housing development, the City Council is offering a range of
incentives aimed at making housing projects more viable and accessible.

These incentives are designed to support a variety of housing types, including affordable, low-income, and market rate developments. The following incentives are not mutually exclusive and may be combined based on the specific needs of each project, subject to eligibility and approval criteria outlined below:

A. City Fee Reductions

(i) A base 50% reduction in City Fees is available for any Qualifying Project that
commences construction prior to May 31, 2028. Projects that demonstrate a
financial gap or require additional financial assistance to proceed may receive an
increased fee reduction, up to 100%, based on financial need and approvals
required herein.

(ii) A 100% reduction in City Fees for any Tax Credit Projects that commence
construction prior to May 31, 2028.

B. Tax Increment Financing (TIF) Benefits

(i) If a Qualifying Project is located within a Tax Increment Financing (TIF) district and
meet statutory TIF standards for eligibility, the project shall receive up to 75% of
the TIF increment for eligible project costs, including infrastructure improvements,
site preparation, and public amenities.

C. Density Bonuses

(i) Qualifying Projects that allocate at least 20% of units for affordable housing (80%
AMI or below) shall be eligible for increased allowable density, reduced parking
requirements, and relaxed height restrictions where not prohibited by other
governing bodies.

(ii) Developments incorporating workforce housing (earning between 80% and 120%
AMI) may qualify for additional density incentives.

D. Property Tax Freeze

(i) Qualifying Affordable Housing, Low-Income Housing, and Tax Credit Projects may
be eligible for a five-year property tax abatement of the City’s portion of property
taxes. The five-year period would begin once occupancy permits are granted and
the abatement would be of the city’s portion of the property taxes owed and paid
above the amount assessed at the time the project’s building permit is granted.
Eligibility and specific terms shall be subject to a development agreement
approved by the City Council, which will outline project commitments, affordability
requirements, and any additional conditions deemed necessary by the City.

E. Commercial Tax Rebates

(i) Qualifying Projects that include commercial components, such as retail or
restaurant spaces, may be eligible for a five-year 50% rebate on sales and food &
beverage taxes. Eligibility and the specific terms of the rebate will be subject to
approval by the City Council, which will review the project’s overall impact,
business viability, and alignment with the City’s goals for economic development.
Rebates shall be contingent on the business being(i) new to the city of Bloomington or  (ii) a 2nd location to an existing Bloomington business contingent upon the original location remaining open and the Municipal Taxes generated by said original location remaining at or above the amounts generated in the 12-monthcalendar year prior to the opening of the commercial location at the qualifying project.

Review Rental Income Limits here 

INCOME LIMITS

A. Standardized Application Process. The Development Services Department shall develop and manage a standardized application process for all projects seeking incentives under this policy. This process will ensure clarity, transparency, and consistency in how applications are submitted and reviewed.

B. Application Materials and Guidelines. All application materials, instructions, and detailed guidelines will be made available online at www.buildingbloomington.com. Applicants are encouraged to review these resources prior to submission to ensure compliance with all requirements.

C. Fee Reductions. The City Manager and the Director of Development Services have the authority to approve fee reductions as defined herein, including those outlined in Section (3)(A), for qualifying projects.

D. Other Incentives. All other incentives, including Tax Increment Financing (TIF) benefits, density bonuses, property tax freezes, and sales and food & beverage tax rebates, must be approved by the City Council. These benefits will be formalized through a development agreement, which outlines the specific terms and conditions, including project scope, performance targets/deadlines and incentive terms.

E. Fast-Tracking Applications. To promote timely project development, all applications for benefits under this policy shall be fast-tracked. The City will prioritize these applications for review and approval to ensure expedited processing while maintaining necessary due diligence