Sheila Dillon

Boston is growing. We are a thriving, innovative city, but to stay this way, we must ensure that Boston remains a city where all Bostonians, regardless of race, age, economic status or physical ability can find a place to call home.

Mayor Martin J. Walsh’s housing plan, “Housing a Changing City: Boston 2030,” outlines an ambitious plan to produce 53,000 new units of housing by 2030. But meeting this goal requires policymakers to think creatively about the tools available to help create these units, including existing and new funding sources for low-income housing; construction of dormitories to relieve pressure on family-sized units; and ways to encourage housing development in all neighborhoods at a range of price points.

Brian Golden

One of Boston’s most important tools is the Inclusionary Development Policy (IDP), first adopted by executive order in 2000, with the goal of generating more housing for moderate to middle-income households. The policy applies to any proposed residential development of 10 or more units that receives financing from the city of Boston, is developed on city-owned land or requires zoning relief due to a lack of conformity with the underlying zoning code. IDP mandates that developers of these projects provide deed-restricted affordable units by incorporating them within the market rate project, constructing them at an off-site location, or making a monetary contribution to the city’s IDP fund for affordable housing creation.

While the policy has evolved since its origin – including increasing the percentage of required affordable units, raising the cash-out rate for IDP fund contributions and shifting the median income targets for affordable units – IDP was until recently a one-size-fits-all approach to a set of challenges that demand a more nuanced solution.

The success of the policy should not be understated. Over the last 15 years, IDP has led to the production of 3,644 affordable housing units, nearly 1,600 of which were created by leveraging $79 million in contributions to the IDP fund. That $79 million in funding helped spur an impressive $768 million in new development.

Refining The Plan

However, it was clear that we could, and should, do more.

Under Walsh’s leadership, the Boston Redevelopment Authority and the Department of Neighborhood Development last year set out to overhaul IDP; the last time the policy was amended was more than eight years ago. The goal was to deliver a new policy that could appropriately respond to Boston’s demographics and the realities of our housing market, which too often remains out of reach for working families.

Over the past year, we worked closely with stakeholders – including development finance experts, affordable and market rate housing developers, and housing advocates – to craft a new policy which embodies the more nuanced tool that we sought to create.

It encompasses a host of reforms, but there are three fundamental changes.

Most importantly, IDP now relies on a three-zone model that recognizes the market differences between Boston’s downtown core and its outer neighborhoods, where new development is scarcer.

In a departure from previous policy, IDP requirements for on- and off-site units and monetary contributions to the IDP fund are now tied to the zones. Developers in more expensive areas of the city will be obligated to finance a greater number of affordable units than in the past should they choose not to include them within a market rate development. Meanwhile, the policy encourages continued development citywide by maintaining the level of contribution in neighborhoods where development lags.

Lastly, developers will benefit from a new option to purchase and convert existing buildings for income-restricted housing if they choose to meet their IDP obligations by creating off-site units.

In December, Walsh signed the new executive order, which took effect on Jan. 1. We are extremely optimistic that this new policy will help create thousands of new, affordable units over the years. The work is not done, but we now have an even stronger tool to help us build a better Boston.

For more detailed information about the Inclusionary Development Policy, please visit www.bostonredevelopmentauthority.org/housing/key-documents.

Sheila Dillon is the chief of housing for the city of Boston; Brian Golden is the director of the Boston Redevelopment Authority.