How private development has increased Boston’s affordable housing stock

BOSTON–Boston Mayor Martin J. Walsh released the City of Boston’s first ever report on the Inclusionary Development Policy (IDP), the City’s program to leverage private development to preserve access to affordable housing opportunities in all of Boston’s neighborhoods.

IDP requires that developers of buildings with ten or more units seeking zoning relief or building on City of Boston owned land set aside a percentage of their units as affordable to moderate- to middle-income households. Produced by the Boston Planning & Development Agency (BPDA), the report is one of several new steps the BPDA is taking to track progress to guide inclusive growth in Boston.

In 2015, Mayor Walsh issued an Executive Order to improve the fifteen-year-old IDP to ensure that the City continues to best leverage Boston’s strong private development market to create affordable housing. The policy update recognizes that development in downtown neighborhoods is strong, while unsubsidized housing for middle-income families in outer neighborhood is still needed. Developments in downtown neighborhoods are now designated as Zone A and are required to pay 228 percent more to the IDP Fund than a development in the outer neighborhoods designated as Zone C.

Mayor Walsh

“One of my top priorities continues to be working to make Boston affordable for all those that want to live here,” said Mayor Walsh. “We’ve committed a significant amount of resources across agencies to maintain and expand our city’s affordable housing stock, and IDP is one of the most impactful tools the City has to leverage the strong private development market to increase affordable and low-income housing.”

As a result of the Inclusionary Development Policy and other efforts, under the Walsh Administration, affordable/income-restricted housing production has increased from an average of 290 units per year before the introduction of IDP, to an average of 605 per year over the last three years.

2016 was a record year, with $23.7 million paid to the IDP Fund, representing 24 percent of all payments made since the inception of the program. In addition, $42.8 million in new funds were committed to the fund in connection with 2016 BPDA Board approved projects.

“This report is a result of the Boston Planning & Development Agency’s mission to track the progress we are making to guide inclusive growth,” said Brian Golden, Director of the BPDA. “Today, we are in the midst of the biggest building boom in Boston’s history and it is critical that this building boom reaches every one of our residents. We will continue to build upon the work laid out in this report to strengthen the IDP as well as all of our other tools to leverage private development and create and maintain our affordable housing.”

“IDP has become a fantastic source of affordable housing in South Boston. Without it, we would have very few new affordable housing units created in this neighborhood, because there is limited land available for development,” said Donna Brown, Executive Director of the South Boston Neighborhood Development Corporation. “IDP units provide a great opportunity for moderate income families and individuals to live in the new buildings developed near Broadway Station, the South Boston Waterfront and Fort Point areas. IDP funds have also provided an important source of financing for new developments like Patriot Homes for Veterans, serving low income and homeless Veterans in South Boston.”

Additional highlights of the report include:

  • 1,737 on-site and off-site units, otherwise known as “IDP Units,” have been created by the IDP since 2000, of which 229 (13 percent of the total) were completed during 2016. A substantial number of new IDP units are anticipated to be completed over the next few years. 746 units are under construction or have been permitted, and there are 656 units that are in projects that have been approved by the BPDA, but have not yet pulled a building permit.
  • In addition to these on-site and off-site units, developers have contributed over $96 million to the IDP Fund, which, when combined with other affordable housing resources, has supported the completion of 1,070 additional units of housing, affordable to very low-, low-, and moderate-income households.
  • Through the help of the IDP, paired with coordinated efforts by City agencies, income restricted units are being created in downtown neighborhoods. In the six years prior to the creation of IDP, while 35 percent of all new units created citywide were in central Boston, only 21 percent of income restricted units created were in the central Boston neighborhoods. This ratio was similar over the first 13 years of the program, but over the last three years, 43 percent of all new housing units, and 43 percent of all new income restricted units have been created in downtown neighborhoods. This outcome represents an important achievement in ongoing efforts to create income restricted/affordable housing in every neighborhood in the city, and to make sure that low-, moderate-, and middle-income households can live in neighborhoods close to transportation, services, and jobs.
  • 47 percent of the units completed with IDP funds have a maximum income of 60 percent of AMI ($49,650 for a household of two), while 18 percent of the units have a maximum income of 30 percent of AMI ($24,800 for a household of two). The provision of units at this very low income helps to meet Mayor Walsh’s goal of addressing homelessness, as many of these very low income units are tied to a preference for individuals and families experiencing homelessness.
  • Of the projects that have been completed since the creation of the IDP, 89 percent have units on-site, three percent have created units off-site, and 26 percent agreed to make a contribution to the IDP Fund in return for creating fewer or no units on-site. As some projects combined these options, these percentages will add up to more than 100 percent.
  • While the federal government has been slowly walking away from a commitment to affordable housing, the City of Boston has stepped to the plate. IDP funds now account.

The BPDA is committed to continuing to use IDP to leverage Boston’s strong private development market to benefit residents in all neighborhoods. The report outlines next steps, including: (1) working with the Boston City Council and state legislature to incorporate inclusionary development in the Boston Zoning Code, (2) implementing density bonus guidelines that have been established with the community through PLAN: South Boston/Dorchester Ave and PLAN: JP/Rox, and (3) working across agencies to improve public awareness of income restricted housing opportunities.

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