How Does an Incentive Zoning Policy Work

How does an incentive zoning policy work?

A) Incentive zoning alters zoning ordinances to allow additional height for a building when developers pay an additional monetary fee per square foot in exchange for constructing a larger building.
B) Incentive zoning policies are fees which transfer the costs of paying for construction of new affordable housing to developers.
C) Incentive zoning policies use taxes to incentivize developers to build further away from the city center, reducing density.
D) Incentive zoning is a policy of incentivizing development of commercial retail space to broaden the economic activity of a neighborhood.