Actions announced to increase affordable housing

Mayor Michelle Wu today announced a series of actions to increase affordable housing and stabilize communities, commissioning two feasibility studies to shape updates to Boston’s policies. First, a study of the existing Inclusionary Development Program requirements and market conditions will consider how Boston can achieve or exceed 20 percent affordability in new construction, up from the current level of 13 percent. The Mayor is also considering taking executive action alongside the study to reduce the number of units that trigger affordability rules and deepen affordability levels. Secondly, a study of Linkage fees will assess the feasibility of increasing funding for affordable housing and workforce training from new development, including from lab space. 

Mayor Wu also announced the start of an audit of all City-owned property to leverage the city’s significant real estate holdings to create more affordable and supportive housing.

The Mayor confirmed that she will be submitting a revised home rule petition in January for a real estate transfer fee to generate new resources for affordable housing, while expanding property tax relief for senior homeowners who have been longtime owner-occupants of their homes. 

Finally, Mayor Wu announced that she will be forming a Rent Stabilization Advisory Group to consider the tools available and necessary to protect tenants and stem displacement, with a goal of drafting legislation for the next state legislative session. 

“With these actions, we’re taking our first major steps towards addressing Boston’s housing crisis,” said Mayor Wu. “Our city must build more affordable housing, leverage our wealth and resources to fight displacement, and protect tenants. Housing must be the foundation for our recovery, and this work begins immediately.” 

“The Office of Housing is ready to implement these new policies to create additional affordable housing and increase tenant protections, ensuring that all Bostonians have a safe, affordable home,” said Sheila Dillon, Chief of Housing. “The pandemic has shown everyone what we always knew – safe, affordable housing is critical to maintaining good health, economic stability, and is the cornerstone of stable neighborhoods.” 

"This is the bold leadership that Boston needs. I am incredibly excited by these steps and am confident that they are only the beginning of Mayor Wu's push for housing equity,” said Councilor Lydia Edwards.

Inclusionary Development Program

The newly-named Mayor’s Office of Housing is commissioning a feasibility study, to be completed within 150 days, to evaluate how to meet or exceed a 20 percent affordability requirement, up from the current level of 13 percent. 

The Inclusionary Development Policy (IDP) was initiated in 2000 to require private residential developers to contribute affordable housing resources as part of their market rate development. Through November 2021, developers have created a total of 3,627 units of income-restricted housing through on-site or off-site units. Contributions by developers to the IDP Fund have led to the creation or preservation of 2,319 additional income-restricted units, for a total of 5,946 units created because of the IDP. The IDP was last revised in December 2015. 

“I applaud Mayor Wu for putting our communities first with these steps to reform IDP and make housing more affordable in Boston,” said Noemi Ramos, Executive Director of New England United 4 Justice. “We are in a housing crisis with rising rents and soaring costs. We need leadership to move quickly and place housing at the top of the agenda, and that's exactly what the Wu administration is doing today. I support these measures as a first step toward delivering housing justice, and I look forward to partnering to make the urgent changes we need."

Linkage

Mayor Wu also announced today the commission of a new study required to make significant changes to Boston’s commercial Linkage policy. Through the Linkage policy, large commercial real estate developers building new commercial space are required to  make payments to the Neighborhood Housing Trust and the Neighborhood Jobs Trust to fund affordable housing and workforce training. This study is expected to be completed within 150 days. 

As with the IDP feasibility study, recent legislation requires the completion of a new Linkage study in order for the City to make changes to the policy. Possible changes that will be considered include: increasing the per-square foot fee to invest in housing and job training, lowering the square footage threshold that triggers Linkage payments, applying the fee to each square foot of new developments that are subject to Linkage, speeding up the payment schedule by requiring full linkage payment for each building at the time that the building receives a building permit, and assuring that the City is maximizing  fees  received from all commercial uses, especially from Boston’s current lab space boom. These changes would generate more funds for affordable housing and workforce training.

“We’re delighted that Mayor Wu is moving forward on linkage, and that she’s committing to a 150 day timeline,” said Symone Crawford, Executive Director of the Massachusetts Affordable Housing Alliance. “Linkage was designed to mitigate the increased housing pressure and displacement of low- and moderate-income residents caused by large scale commercial development. The current linkage fee doesn’t do that. We look forward to working with Mayor Wu to fix this.”

“Linkage is the primary source for job training funding through the City, so we are thrilled that Mayor Wu is taking action on a nexus study,” says Amy Nishman, Senior VP of Strategy at JVS Boston and president of the Job Training Alliance.  “As Boston continues to recover, the development pipeline is strong, and the only way to ensure that Boston residents are eligible for the jobs being created is to fully fund effective job training programs.”

Audit of City-Owned Property for Housing

Meeting a goal that Mayor Wu established on the campaign trail, City agencies have begun an audit of City-owned property and parcels to identify opportunities to develop supportive housing and affordable housing. The audit will be completed within the first 100 days of the Wu Administration. 

Transfer Fee

Mayor Wu further announced that she will be pursuing a revised Home Rule Petition to establish a transfer fee to support the creation of affordable housing.  The petition would authorize the City of Boston to impose a fee on real estate sales above a certain threshold value.  The funding generated would be dedicated to the Neighborhood Housing Trust for affordable housing development and preservation.  The Home Rule Petition would also include property tax relief for senior homeowners who are longtime owner-occupants of their homes. A previous version, passed by the City Council in 2019, failed to pass the MA legislature. The Mayor will be submitting the new version of the transfer fee legislation to the Boston City Council in the new year. 

Rent Stabilization

Mayor Wu is also taking the first steps towards implementing rent stabilization in Boston by forming a Rent Stabilization Advisory Group. The members of this new advisory group will study local housing conditions, rent stabilization programs being administered in other cities and be tasked with making recommendations on the available and necessary means to protect tenants from displacement, with a goal to shape language for the next legislative session on Beacon Hill.

Mayor’s Office of Housing

Finally, Mayor Wu and Housing Chief Sheila Dillon announced that they are renaming the City of Boston’s Department of Neighborhood Development (DND) as the Mayor’s Office of Housing. This name change more accurately reflects the role that the former DND plays in the creation and preservation of affordable housing, and helping Bostonians obtain, maintain, and retain safe, affordable housing. The Mayor’s Office of Housing (MOH) will develop and implement the City of Boston’s housing creation and homelessness prevention plans and collaborate with local and national partners to find new solutions and build more housing affordable to all, particularly those with lower incomes. For more information, please visit the website.

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