After four years, Mayor Dave Cieslewicz is abandoning his prized but controversial program that makes developers put lower-cost units in housing projects.

Cieslewicz, who made inclusionary zoning, or IZ, the centerpiece of his first term, will allow the program to end on Jan. 2.

The mayor has now set aside the biggest visions of his first term — IZ and streetcars.

"A good mayor adjusts to the needs of the city," Cieslewicz said. "It's not about me. It's about the city."

Cieslewicz said he's not abandoning his desire to create affordable housing, just this approach. He said he didn't see the value of putting the council and community through another polarizing IZ debate.

In its place, Cieslewicz will today propose a new "Housing Diversity Planning Committee" charged with making recommendations to create a range of housing opportunities for families of all income levels.

The mayor conceded IZ never produced the results he sought. Advocates envisioned hundreds of lower-income units that would better distribute incomes in neighborhoods and schools, but the program only created about 175 IZ units and fewer than 40 were sold.

The program was initially too complicated, Cieslewicz said. Then, the housing market slumped, the courts excluded rental units from the program, and developers got increasingly frustrated, he said.

On Nov. 3, the city Plan Commission moved to require that Veridian Homes provide 40 IZ homes in a 300-unit subdivision, which Veridian said would cost millions and make the project unfeasible.

Veridian, the state's largest home builder, is appealing the decision. The mayor now does not oppose the council overturning the commission's decision.

But units already created under the law will remain, Cieslewicz said.

The mayor's move to drop IZ is "a reality check," council President Tim Bruer said. "The objectives were great. But ultimately, people realized, that while well intended, it failed to accomplish what it set forth to do."

"The underlying principals are laudable," agreed Carole Schaeffer, executive director of Smart Growth Madison, a development industry group that supported and then opposed the law. "I don't think IZ ended up being the right tool. The more we tried to fix it, the more complicated it got."

Ald. Brenda Konkel, 2nd District, a driving force in passing IZ, said the law was the product of so many compromises that it became unusable and that it's time to move on.

"In the end, it's not worth all the brain damage," she said.

The mayor's proposed committee, composed of five city council members and two citizens, would report to the council by May 1, 2009.

The mayor also is proposing better coordination between city and Dane County housing authorities and expanding use of the city's $4 million Affordable Housing Trust Fund outside the city to help others share the responsibility of low-cost housing.

"The industry welcomes the mayor's shift," Schaeffer said, adding, "We are committed to staying involved."

Konkel said, "I want to work on true affordable housing."

After his election in 2003, IZ was the mayor's biggest initiative — his staff dubbed it "the big enchilada" — and the council approved the law by a 12-8 vote in 2004.

The law makes developers put 15 percent lower-cost units in most projects and set them aside for people earning less than the county median income.

Over time, the law came under increasing criticism by the housing industry, which said it was too complicated, put relatively few low-income people in homes and was expensive.

In 2006, the courts dealt a blow, striking down part of the law that applied to rental projects because it violated the state's ban on rent control. Also that year, the council made improvements but set Jan. 2, 2009, as the date at the the law would end.

Since the program began, 48 housing developments were approved with 2,075 units, including 173 IZ units through July 31 this year, an IZ oversight committee report says. Of the 173 IZ units, just 33 were sold.

"It's right to try something," Cieslewicz said. "Now it's time to adjust and try something else."