- Boston Mayor Michelle Wu proposes four changes to the Inclusionary Development Policy and a fee freeze on linkage payments through 2027 to help stalled projects start construction.
- The 17% income-restricted and 3% voucher set-asides stay, but payments would spread over seven installments and condo in-lieu fees would drop from 75% to 50% of the value gap.
- The plan needs BPDA Board and Boston Zoning Commission approval, and it follows $31.5 million in tax breaks for four large projects totaling 1,400-plus units.
Boston’s apartment pipeline has stalled, and Mayor Michelle Wu now wants to loosen developer mandates to get projects moving, Bisnow reported.
According to Bisnow, her plan keeps the city’s affordability percentages but eases how and when developers pay.
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Why Now
Real estate groups have criticized the city’s inclusionary and linkage fees since Wu first proposed raising them in late 2022, according to Bisnow. They argue these local costs, combined with capital market headwinds, helped drive a sharp drop in housing starts.
Industry leaders hoped for a friendlier stance after Wu’s reelection. Last month, Wu secured approval for $31.5 million in tax incentives for four major apartment projects. Together, they represent more than 1,400 units. The shift echoes New York, where a rezoning fast track aims to speed affordable projects.
What Changes for Housing Developers
The plan makes four adjustments to the city’s Inclusionary Development Policy. Currently, new apartment buildings must make 17% of units income-restricted and reserve another 3% for voucher holders. Those shares will remain unchanged after rising from 13% combined in 2023.
For two years, the policy’s threshold would increase from seven units to 10. In addition, developers contributing to the affordable housing fund could pay in seven installments instead of two lump sums.
Condo developers would owe 50% of the difference between market-rate and restricted-unit values in lieu of providing units. That’s down from 75%. The plan would also remove the requirement that off-site units sit within a half-mile of the project.
Linkage Fee Freeze
Wu also proposed freezing linkage fees through 2027. Commercial developers pay these fees toward affordable housing and job training. Under the plan, payments would stretch from two installments to seven.
Wu credited the two policies with producing more than 2,900 affordable homes over the past five years, according to Bisnow.
Who Backs It
Wu’s office circulated supportive statements from several industry figures. They included Beacon Communities’ Dara Kovel, National Development’s Brian Kavoogian and Abe Menzin of Samuels & Associates.
Kathy Brown of the Boston Tenant Coalition also voiced support. She cited the unchanged 17% and 3% set-asides.
Why It Matters
Developers say local fees add to already high construction costs. Our coverage found that builders face higher costs across materials, labor and borrowing.
Fewer, simpler payments could help projects pencil. More compliance options may also improve feasibility without reducing the affordable units cities expect.
What’s Next
The proposals still need approval from the BPDA Board. Boston’s zoning commission must also sign off before they take effect.
