City’s Inclusionary Development Policy garnered affordable units for Boston, but few in Rox
Of 1,737 private-developer-made units, less than 1 percent were in Roxbury
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BPDA’s Inclusionary Development Policy Report: http://tinyurl.com/ybp9t7eg
Private firms have been spurred to create almost 1,740 affordable housing units in Boston, thanks to the city’s Inclusionary Development Policy. But less than 1 percent of those units have been built in Roxbury, according to a recent Boston Planning and Development Agency report.
Since its establishment in 2000, the IDP has helped the city increase overall affordable housing stock. Under the policy, developers of buildings with 10 or more units who seek zoning relief or to use land owned by the city must create a number of units affordable to moderate- and middle-income households. They can fulfill this requirement by designating a percentage of on-site units as affordable, building a higher percentage of affordable units off-site, paying into an affordable housing fund or enacting some combination of these options.
While developer-created IDP units have largely skipped Roxbury, these trends could be shifting as developers now turn attention to Boston’s outer neighborhoods. According to the city’s latest permitting numbers, released in July, 69 percent of new permit applications have been for developments outside of the downtown core, with many units expected to be moderately priced.
IDP results across neighborhoods
Between 2000 and 2016, developers have fulfilled IDP requirements by building 1,737 units on- or off-site. Sixty-seven percent of these have been rental. However, of all units created, only eight have been in Roxbury. Roslindale and Mattapan also received scant amounts: nine units and 19 units, respectively. The neighborhood netting the highest number of on- or off-site developer-created IDP units is South Boston, which, with 403 units, represents 23 percent of the total.
Developers who cashed out to satisfy IDP requirements, instead of building some affordable units, have contributed about $96.8 million under the policy. These funds subsidized about 1,070 completed affordable units in various parts of the city. IDP collections have risen in recent years: Annual commitments increased from about $8.5 million before 2015 to about $17.6 million after, according to the BPDA report.
Honing the IDP
According to the BPDA report, the IDP is valuable for targeting a kind of housing rarely supported.
“It is one of the only resources for addressing moderate to middle-income households being priced out of Boston’s real estate market,” the report states.
In January 2016, Mayor Martin Walsh’s administration revised the IDP policy. These adjustments increased the off-site unit requirements and cash-out rates on developers who built in areas with higher home sales prices. BPDA project manager Phil Cohen said in December 2015 that the intention was to encourage construction, especially of middle-class housing, in the outer neighborhoods less frequented by developers. The policy changes also aligned with goals of increasing overall affordable housing stock in the city, and the BPDA report states IDP has been helpful in increasing the amount of affordable housing present in the downtown core.
Under the adjustments, off-site construction and cash-out amounts were increased on developers building in the expensive downtown and waterfront neighborhoods. Developers experienced the same hike in off-site requirements and a lessened rise in pay-out amounts if they sited projects in the neighborhoods of Allston, Brighton, Charleston, Jamaica Plain or Mission Hill or in the waterfront part of South Boston. Meanwhile, IDP requirements remained the same for Roxbury, Dorchester, East Boston, Hyde Park, Mattapan, Roslindale and West Roxbury.
At the same time, the BPDA also made a change to reduce the depth of affordability on rental units in the latter outer neighborhoods, under certain conditions. Whereas before developers had to make units available to those earning up to 70 percent of Area Median Income, now developers could provide their IDP units for those making up to 100 percent AMI, should the developers make a valid argument that this is necessary for the financial feasibility of the project.
Even with this change, affordability levels for IDP housing remain set at a lower level than in the early years of the policy, when most IDP units were provided at 80 percent AMI, 100 percent AMI, and 120 percent AMI, states the BPDA report. Under the current form of IDP, most affordable rental units are set at 70 percent AMI (affordable to a two-person household earning up to $57,950), 80 percent AMI (up to $66,200 for a family of two) and 100 percent AMI (up to $83,100 for a family of two). Funds contributed by developers have been used, in conjunction with other affordable housing resources, to support housing at deeper levels of affordability — 47 percent of IDP-supported units were at set at 60 percent AMI, and 18 percent were set at 30 percent AMI.
The Walsh administration sees increasing overall housing stock as the key to improving affordability. The city’s latest report includes some positive hints: Rents on pre-2011 housing stock in areas outside the downtown core declined by 5 percent between 2015 and 2016.
City officials intend to extend IDP requirements further to cover projects not requiring zoning exemptions, according to the BPDA report.