In December 2015, Boston Mayor Martin J. Walsh signed an Executive Order Relative to Inclusionary Development updating the city’s Inclusionary Development Policy (IDP), which has been in place since 2000.
The IDP applies to residential developments with ten or more units that will either be developed on property owned by the City of Boston or that require relief from the Boston Zoning Code. Under the IDP, developers of these projects are required to either build affordable units on-site, build or acquire affordable units in an off-site location, or, with Boston Redevelopment Authority (BRA) approval, provide a contribution to the Inclusionary Development Fund.
Any project filed with the City on or after January 1, 2016 will be subject to the updated IDP. The most notable changes to the IDP are highlighted below:
Creation of a three-zone model. Whereas the prior IDP applied the same affordability requirements regardless of a project’s location, the updated IDP seeks to recognize the market differences between Boston’s downtown core and its outer neighborhoods. The zones are designated as A, B, and C. Zone A will include the downtown neighborhoods and waterfront areas; Zone B will include Allston, Brighton, Charlestown, Jamaica Plain, Mission Hill, and part of South Boston. Zone C will include Dorchester, East Boston, Hyde Park, Mattapan, Roslindale, Roxbury, and West Roxbury.
Strengthens preference for on-site affordability. While the City’s preference has always been that units created through the IDP remain on-site, the new IDP now incentivizes developers to do so. The prior IDP required that a total of 15% of market rate units – or 13% of total units – be provided as affordable, whether on-site or off-site. Now, in Zones A and B, developers seeking to build their units off-site will be required to increase the number of affordable units from 15% of the total to 18% of the total units in their development. (In Zone C, the requirement will remain at 15% of the total units.) The new IDP also requires that any off-site units be created within a half mile radius of the project.
Changes in contribution amounts. Based on the location of new developments within the three new zones, the IDP has been modified to increase the contribution amounts for developers wishing to make a cash-in-lieu payment instead of building affordable units on-site. With the exception of Zone C, the new contribution limits will be higher than in the previous policy, rising from $200,000 per unit to $300,000 in Zone B, and from $200,000 to $380,000 in Zone A. For ownership units, the payment is half the difference between the market value of the unit and the value of an income-restricted unit, with a minimum of $300,000 per unit in Zone B and $380,000 per unit in Zone A. In addition, payments will be based on the new, higher off-site unit requirements of 18% affordability in Zones A and B; Zone C payments will continue to be based on 15% affordability.
Increase of AMI in Zone C. All affordable rental units created through the IDP are required to be affordable to households with incomes less than or equal to 70 percent or less of the Area Median Income (AMI). Under the updated IDP, in Zone C projects, the BRA may now allow either all or a portion of on-site units to be designated for households earning up to 100% of the AMI.
The updated IDP also codifies the City’s approach to a variety of details involved in the implementation of the IDP, including the following:
- Allowing payment of IDP contribution in an up-front present-value lump sum
- Allowing off-site units to be provided through direct construction or rehabilitation of existing units
- Requiring that on-site affordable units be comparable to market-rate units
- Requiring that on-site affordable units not be stacked or concentrated on the same floors
- Clarifying AMI distribution for both rental and ownership units
- Establishing a maximum allowable rent for micro-units (studio units of less than 450 square feet)
A full pdf copy of the new IDP is available here. Boston – 2015 IDP