By Adam Swift
Mayor Michelle Wu’s proposal to increase affordable housing units in new construction in the city was approved by the Boston Planning & Development Agency’s Board of Directors at its monthly meeting in July.
The change to the city’s inclusionary zoning policy would see the effective rate of affordable units in new developments increase from 13 to 20 percent, and codify the changes in the city’s zoning ordinances. The inclusionary zoning amendment okayed by the board would require 17 percent of units in developments of seven or more units to be affordable, with an additional 3 percent set aside for Section 8 vouchers.
The proposal will next go to the City Council before heading to the Boston Zoning Commission for possible approval.
The proposal passed the board by a 4-0 vote, but several members did raise concerns about how the change could impact market rate residential development in the city.
Inclusionary development programs require market rate developments to create affordable units on or off site, or in some cases require developers to pay into a fund that would be set aside for the development of affordable units.
“Boston’s Inclusionary Development Policy (IDP) was created by executive order during the Menino administration,” said BPDA Planning Director Aimee Chambers. “It has been updated over time, most recently in 2015, when the current guidelines were established.”
In 2021, a home-rule petition was passed which would allow the IDP to be incorporated into the city’s zoning ordinances. That petition requires that the zoning text be approved and reviewed by the city council before going to the zoning commission.
In 2022, a feasibility study was initiated by RKG Associates and the mayor’s office of housing to study potential changes to the city’s inclusionary zoning policy, Chambers said.
“The financial model enabled the city to test prototypical developments to understand the financial implications of changing the existing IDP ordinance,” said Chambers.
The current IDP policy applies to new developments of 10 or more units which require zoning relief. While the current policy allows for as low as 13 percent of new units to be set aside as affordable, Chambers noted that developers are generally showing a greater commitment to affordability.
“On average, the current process is generating a set aside of 17 percent,” Chambers said. “Because of the IDP, developers have created over 4,000 on-site and off-site income-restricted units, and 688 units are currently in construction.”
Developers have also made over $200 million in IDP contributions, she said.
Under the new policy, developments would not need zoning relief to trigger the income-restricted units, it would be based purely on the number of units. In addition, the income-restricted unit percentage could be satisfied either by the number of affordable units, or total square footage of the development. Chambers said this could potentially create larger affordable units for families.
“I recognize that there are many strong views on what is that right percentage to both address the significant housing need that we have, particularly with affordability in the city, and still making Boston attractive for developers to want to invest in it and make sure it is financially feasible,” said BPDA Board Chair Priscilla Rojas.
Boston Chief of Housing Sheila Dillon said that while the city’s goal is to increase the amount of affordable housing and mixed-income development in the city, it does not want to do it in a way that would impede market rate development. She said the consultant, RKG Associates, spent months working with developers, talking to housing advocates, and looking at the variables that go into housing costs.
“What is before you tonight is what we feel we can ask developers to do without harming development,” said Dillon.
BPDA board member Brian Miller said he did have some concerns about the IDP policy.
“My concern is that if we cause development to have additional costs, we will push up the market-rate units and push more people out,” said Miller.