Boston Mayor Michelle Wu’s proposed increase in affordable housing requirements for new developments cleared a major hurdle with the Boston Planning & Development Agency’s approval of changes to the inclusionary development policy.

The changes increase the minimum income-restricted component in new developments from 13 to 20 percent, and subjects all projects with at least seven housing units to the policy. The BPDA board voted 4-0 to approve the first changes to the policy since 2015.

“We really did our best to look at what we could extract but at the same time, make sure we had financial feasibility,” said Sheila Dillon, director of the Mayor’s Office of Housing.

Some developers have warned the changes will make it even more difficult to obtain financing in a challenging market, following several years of escalating construction costs and recent interest rate hikes.

In defending the changes, Wu has pointed out that many recent projects already have included higher percentages of income-restricted units than required under the current policy. According to BPDA data, the average income-restricted component in projects approved in the past 12 months is over 17 percent.

Harvard University and Tishman Speyer, for example, agreed to include 25 percent income-restricted units in the 345-unit residential building at the new Enterprise Research Campus that broke ground last month on Western Avenue. Fenway Corners developers are setting aside 20 percent of the 266 residential units as income-restricted in their project approved this week.

At Thursday’s meeting, BPDA board member Brian Miller questioned whether developers will increase rents of market-rate units to offset the lost income.

“My concern is if we cause a developer to have additional cost, do they push up those market-rate units?” Miller asked.

Under the changes, 17 percent of units would be income-restricted at 60 percent of area median income (AMI) and another 3 percent would be reserved for households with housing vouchers and incomes below 30 percent of AMI. Developers of large projects also have the option of reserving only 15 percent of units as income-restricted, but at a deeper 50 percent AMI maximum, plus the 3 percent voucher component.

For home ownership condominium projects, the income-restricted component increases from 13 to 20 percent, with half of the units designated at 80 percent of AMI and half at 100 percent of AMI.

The updated policy also requires approval by the City Council and the Boston Zoning Commission.

BPDA Board Backs Increase in Affordable Housing Requirements

by Steve Adams time to read: 2 min