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Affordable housing advocates pushed for deeper income restrictions in new multifamily developments in Boston, saying Mayor Michelle Wu’s proposal doesn’t go far enough to stem displacement.
Commercial real estate group NAIOP Massachusetts warned that increasing affordability requirements will virtually halt housing development as financing becomes harder to obtain.
At a public forum sponsored by the Boston Planning & Development Agency on Tuesday, some nonprofit affordable housing developers urged approval of the new policy, citing rising housing costs and displacement.
“For most of the people we serve, it’s the 30-percent [area median income (AMI) units] that helps the most vulnerable. We’re moving in the right direction,” said Karen Chen, executive director of the Chinese Progressive Association.
The BPDA has been reviewing Wu’s proposed changes to the city’s 23-year-old inclusionary development policy, which applies to multifamily developments with 10 or more units. The amendments would increase the minimum percentage of income-restricted units in condominium and apartment projects, and lower the median household income requirements for the restricted units.
All projects with seven or more units would be covered by the new policy. Some of the requirements vary by neighborhood, with the city divided into three zones based upon median home prices.
In the latest proposal presented Tuesday, apartment projects of 50,000 square feet or more – around 50 units in size, per city estimates – would have two options. One includes 17 percent of square-footage at a maximum 60 percent AMI and 3 percent reserved for city-issued housing voucher holders. The other would set aside 15 percent of square-footage at an average 50 percent AMI, along with the 3 percent voucher component.
Angie Liou, executive director of the Asian Community Development Corp., said the group “fully supports” the proposal.
“We’ve seen first-hand these tremendous costs and lack of affordable housing in Chinatown,” Liou said.
But the Chinese Progressive Assoc.’s Chen urged lowering the average AMI for income-restricted apartments to 40 percent, saying it would benefit more cost-burdened residents.
A 40 percent AMI limit equates to $39,300 for a one-person household and $44,900 for a two-person household.
Condo projects of 50,000 square feet or morewould be required to include 20 percent income-restricted units by square-footage. Half of those units would be reserved for households earning a maximum 80 percent of area median income , and the remainder at 100 percent of AMI.
At 80 and 100 percent AMI, units could be sold to two-person households earning $89,750 to $112,200 a year under current income limits.
Smaller condo projects would have a 17 percent income-restricted minimum.
Some developers and industry group NAIOP-MA say elevated affordable requirements in Cambridge and Somerville have depressed housing production there in recent years.
They also cite the findings of the BPDA’s consultants, RKG Assoc., which concluded in a 2022 report that condo developments would not be financially feasible in Dorchester, Hyde Park, Jamaica Plain, Mattapan, Roxbury and West Roxbury because of a gap between development costs and the lower sales prices in those neighborhoods.
Anastasia Nicolaou, NAIOP Massachusetts’ vice president of policy and public affairs, said the administration’s approach will worsen Massachusetts’ affordability crisis.
“We are deeply concerned the proposal put forth by the administration will be detrimental to housing production,” Nicolaou said.
Some developers also have run into financing difficulties even under the existing policy, despite city officials’ goal of encouraging more for-sale units as a wealth-building strategy for residents.
Developer Ad Meloria is seeking to eliminate 151 condos in its Residences at Readville Station proposal in favor of apartments, citing market and financing challenges.
The changes also require approval by the Boston City Council and the Zoning Commission, but no dates for those votes have been set, BPDA officials said.
