Kairos Shen (second from right, holding microphone) speaks at a half-day symposium on inclusionary zoning and housing costs at MIT on Oct. 16, 2026. Photo by Steve Adams | Banker & Tradesman Staff

Boston Chief of Planning Kairos Shen sparred with developers over the city’s affordable housing requirements, defending the policy and Boston’s long-term desirability for investors.

“It’s hard to develop here. It should be,” Shen said during a panel discussion sponsored by the MIT Center for Real Estate on Friday. “We’re developing good stuff, you know? You guys want us to lower our standards. Part of my job is to hold those standards and try to still make them work.”

Shen and developers from The Davis Companies and Oxford Properties participated in the forum on inclusionary zoning policies, which have come under rising criticism and legal challenges by opponents who claim they make it more difficult for developers to obtain financing.

The local policies require a percentage of income-restricted units in new multifamily developments.

With Construction Stalled, Other Cities Cut Requirements 

Approximately 30,000 housing units have been approved in recent years in Boston, but unable to break ground due to a variety of financial challenges including inflation-driven project cost increases and higher interest rates. The Boston Planning Department increased its minimum from 13 to 20 percent in 2024 for projects with seven or more units.

Critics in Massachusetts and across the nation have focused on changes to inclusionary zoning as an opportunity for local officials to make the development climate friendlier and enable more housing production.

The Davis Companies received approval in 2023 for a large mixed-use project on Soldiers Field Road, including 450 apartments, 93 condominiums and a 195-room hotel, which has yet to break ground.

Melissa Schrock, The Davis Companies’ recently appointed managing director of mixed-use development, acknowledged that projects face an unusually broad array of financial obstacles.

“We’ve had historic inflation, so the cost structure today to build anything is very, very high and the cost structure of actually building taller is some of the worst, lest pencil-able deals that we have out there today,” Schrock said. “I do think through a combination of reducing some of the sticks and offering more carrots, we could achieve the policy goal.”

Shen defended the Wu administration’s approach to development, which also includes last year’s approval of Net Zero zoning designed to eliminate use of carbon fuels in new developments.

“There are many advocacies and interests that the mayor and the city have to balance. And to the degree that we are using our discretion to lower requirements to meet a particular objective, there is political cost and  social cost to that in the other direction,” Shen said, adding that his remarks did not represent city policy or deliberations.

Will City’s Uniqueness Still Draw Capital?

Schrock argued that global capital will shun investment in Boston in favor of regions with more favorable conditions.

“It’s going to find the sectors and the locales and industries where it feels like it’s going to get a risk-adjusted rate of return,” Schrock said. “Period, end of story.”

Shen, who earlier said he would “bet on Boston and invest in Boston over Anywhere USA,” disagreed.

“I would be willing to bet that notion of this rate of return determined by the market isn’t going to prevail, because I think that what we’ll see is that’s a bankrupt kind of pursuit,” he said. “I have to believe that, because I believe in place and I believe in uniqueness of place. And real estate, more than anything else, is dependent on that.”

Shen was head of the former Boston Redevelopment Authority under Mayor Thomas Menino in 2002 when the city first began requiring income-restricted housing in housing developments that needed zoning relief. The policy was added to the zoning code in 2023, extending it to all housing developments.

Professor: Supply Alone Won’t Solve Affordability Problem

Justin Steil, a professor of law and urban planning at MIT, said an increase in supply alone won’t control housing prices in places like Boston and Cambridge.

“We have a very segmented housing market, and I don’t think trickle-down works in housing – filtering as it’s sometimes called – as easily as it does in the economics textbooks,” Steil said.

A consultant hired by the city of Cambridge this month recommended rolling back its inclusionary zoning policy, which was updated in 2017 to require a 20-percent income-restricted component in projects with 10 or more units.

RKG Associates suggested lowering the minimum to 10 percent, among other options.

The city also faces two lawsuits from developers seeking to build multifamily housing, which challenge the policy as an unconstitutional taking of private property.

In Chelsea, the City Council recently amended its inclusionary zoning ordinance as a strategy to spur housing production.

A 2024 U.S. Supreme Court ruling opened the door to challenges of local inclusionary zoning policies, legal experts say.