City Hall in Boston, Massachusetts. Built in the 1960's and located in Government Center. It is generally disliked by Bostonians. The type of architecture is "brutalist".

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Boston City Councilors backed an increase in income-restricted units in multifamily developments, a move that real estate industry groups predict will further discourage housing production.

The changes – proposed by Mayor Michelle Wu and subject to final approval by the Boston Zoning Commission – would standardize a process in which developers have agreed to various levels of affordability on a project-by-project basis in recent years.

Last updated in 2015, the current IDP requires a minimum of 13 percent affordable units in new rental projects with 10 or more units. The changes increase the minimum to 17 percent and require an additional 3 percent of units be offered to holders of federal Section 8 housing vouchers.

Tamara Small, CEO of commercial developers’ group NAIOP Massachusetts, noted that San Francisco recently relaxed its affordability minimums to encourage housing production.

“As [Boston’s] own study illustrates, housing production suffers when IDP is pushed too high for the market to sustain. Boston has already seen a slowdown in housing for units that were approved under the previous requirements and NAIOP is deeply concerned that advancing this higher rate will only worsen that slowdown and increase housing costs for Bostonians,” Small said in a statement.

In September, San Francisco enacted a temporary reduction in affordable housing minimums from the previous 22 to 33 percent range to 15 to 21 percent for new projects.

District 3 Councilor Frank Baker was the lone dissenting vote at last week’s council meeting, and argued the changes would add another burden to developers already faced with rising construction costs and higher borrowing costs. Baker also criticized the extension of the policy to cover all developments with seven or more units, compared with the current 10.

“Is this the time to pile on? The people who get hurt here are that small developer who in my view is in a lot of these neighborhoods who can create this housing,” Baker said.

Affordable units in for-sale condominium projects in neighborhoods that have the top two-thirds of housing prices would increase from 13 to 20 percent of buildings’ dwelling areas.

An analysis commissioned by the administration by RKG Associates concluded that most projects could go forward with the changes, but would make for-sale condo projects unable to obtain financing in Dorchester, Hyde Park, Jamaica Plain, Mattapan, Roxbury and West Roxbury.

“While well-intended, increasing the required rate of IDP units will hike up costs at a particularly challenging time, as high interest rates and a lack of supply continue to exacerbate the state’s housing crisis,” Greater Boston Real Estate Board CEO Greg Vasil said in a statement. “Instead, lawmakers across the city and state should prioritize policies that ease barriers to housing creation across all price points: the clearest way our state may overcome the housing crisis.”

Some developers have agreed to include even higher affordable components than Wu’s proposal in recent years, as the result of informal discussions with Boston Planning & Development Agency officials.

Harvard University and Tishman Speyer set aside 25 percent of the 345 housing units in the first phase of their Enterprise Research Campus as income-restricted, clearing the way for approval of the Western Avenue project.

“[Wednesday’s] approval of a new inclusionary development policy is an important step for Boston’s growth to sustain the affordability needed for future generations to call our city home,” Wu said in a statement.

Housing costs for apartment renters in Greater Boston continued to increase over the past 12 months, according to data released this week by Apartment List.

The listing service said asking rents increased in 13 of 16 communities that it tracks. Norwood’s 6.7 percent increase to $2,255 led the way, while Cambridge has the highest average rents at $2,481 for a 1-bedroom unit.

Editor’s note: This report has been updated with a statement from Greater Boston Real Estate Board CEO Greg Vasil.

Council Backs Wu on Affordability Increase

by Steve Adams time to read: 2 min
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