BOSTON Boston Mayor Marty Walsh on Wednesday will sign an executive order reforming the city’s inclusionary development policy, upping certain contributions developers must make for affordable housing.
Boston’s so-called IDP policy applies to the vast majority of residential developments. It requires developers to either set aside housing units targeted for middle-income residents — they can be on the development site, or off-site — or pay into a city housing fund.
The new IDP policy maintains the existing requirement for developers who choose to create on-site affordable units (at least 13 percent of total units), while, most notably, increasing the requirement for developers who choose to develop off-site affordable units and the contributions developers must pay into the city fund, if they decide to go that route.
As part of the changes, Boston is divided into three zones based on housing prices. For developments in the city’s two interior zones, where housing prices tend to be higher, the new IDP policy increases the requirement for off-site affordable units from a minimum of 15 percent to a minimum of 18 percent, and it increases contributions developers must pay into the city fund.
Sheila Dillon, Boston’s chief of housing, said in an interview that the three zones “all have different conditions” and that “developers developing luxury [housing] downtown are able to create more affordable housing than some of the residential developments out in the neighborhoods.”
At the same time, though, she added that the city wanted to “ensure the feasibility” of existing market-rate developments.
“While we wanted to increase the number of affordable housing units created, we did not want to chill market-rate development,” she said. “And that was our starting point.”
The new policy was forged after months of discussions between city officials, developers and affordable housing advocates. Dillon characterized the final proposal as “a good compromise.”
“I think it’s safe to say that the affordable housing advocates would have liked to have seen more affordable housing created, and the developers would have liked to have seen the policy [stay] the same,” she said. “So we’re feeling we probably reached a good compromise.”
Mayor Walsh last year called for a $21 billion investment in the city’s housing stock to build 53,000 new units by 2030. He said the construction is needed to keep up with population growth and to tamp down housing costs. Dillon said the new IDP policy is “right in line” with those goals.
Dillon said since its inception in 2000, IDP is responsible for creating about 4,000 affordable units in Boston.
But she stressed the inclusionary development policy is “only one tool,” and she said city officials are also examining linkage fees, which are generated from commercial developments, among other initiatives.
The new policy is set to be adopted by the Boston Redevelopment Authority on Thursday, and go into effect on Jan. 1, 2016.