Mayor Michelle Wu announced proposed changes to Boston's Inclusionary Zoning (IZ) and Linkage policies aimed at helping new housing and commercial development move forward amid challenging economic conditions affecting cities nationwide, while preserving the City's core affordable housing commitments. These targeted adjustments are part of the Wu administration's broader strategy to increase housing production, remove barriers to development, address the housing crisis, and make Boston more affordable for residents.

Across the country, high interest rates, rising construction costs and shifting demand for commercial space have made it increasingly difficult for development projects to secure financing and begin construction. Boston is facing many of these same pressures, slowing the production of new housing and commercial space at a time when more homes are urgently needed. The latest proposals would provide greater financial flexibility for developers while protecting the City's commitment to affordable housing.

The proposed amendments build on the City's ongoing efforts to accelerate housing productions, including the Office-to-Residential Conversion Program, Housing Accelerator Fund and targeted, time-limited tax abatements. Together, these initiatives are expected to support the creation of thousands of new homes by 2030.

"Over the last five years, Boston's Inclusionary Development and Linkage policies have delivered over 2,900 new affordable homes and immeasurable community benefit by ensuring that families of every background can put down roots and contribute to our city," said Mayor Michelle Wu. "In the face of continued economic headwinds exacerbated by federal actions, we are making targeted adjustments to help more projects move forward and create more affordability. This balanced approach is part of our administration's broader strategy to build more homes, remove barriers to development, and ensure Boston remains a city where residents can afford to stay and thrive."

The City is proposing three key changes to Inclusionary Zoning:

• Extending the payment schedule for affordable housing payments from two installments to seven installments, reducing upfront financing pressures.
• Reducing the condominium payment-in-lieu fee from 75 percent to 50 percent of the difference between market-rate and income-restricted unit values, making this option more financially feasible.
• Temporarily raising the threshold for projects subject to Inclusionary Zoning from seven to ten units for two years, easing requirements for smaller housing developments.  
• Off-site radius: Change from 0.5 miles in the zoning to MOH policy, providing flexibility to create IZ units in impactful projects in a wider geographic area.

Together, these adjustments would help some residential developments move forward while continuing to raise revenue for City-supported affordable housing developments.

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Extending payment schedules allows developers more time to spread out the cost of meeting the inclusionary obligation and therefore improves project feasibility.  This is just one tool in addressing the high cost of housing construction in Boston and when combined with others will aid the City's efforts in getting important housing projects into construction.

"We recognize that the cost of building housing has increased, and we want to be responsive to these realities," said Sheila A. Dillon, Chief of Housing. "These program changes are designed to encourage the development of new housing while maintaining our commitment to affordability. By providing developers with greater financial flexibility, we can also support income-restricted developments that serve the needs of our lower-income residents."

"We support the Mayor in her commitment to defending Inclusionary Zoning, particularly the set aside of 17% plus 3% voucher units, and the deeper level of affordability which creates more opportunity for Boston residents.," said Kathy Brown, Executive Director of Boston Tenant Coalition and Co-Coordinator for Coalition for a Truly Affordable Boston. "The changes being made are preferred over rolling back IZ from 20% to 13% of units built."

"We support the proposed changes to IDP policy as a creative approach to encouraging more housing production in Boston while preserving the policy"s commitment to affordable housing," said Abe Menzin, Executive Vice President of Development and Principal at Samuels & Associates. "Creating a more sustainable framework for developers to meet their affordable housing obligations, while also supporting development of market-rate housing in challenging conditions, is critical to addressing the City's housing needs."

Boston's inclusionary housing policies have been a critical tool for creating affordable homes. As of June 2026, more than 5,000 income-restricted homes had been completed or were under construction through the City's Inclusionary Development Policy (IDP). Developers have also contributed more than $200 million to the IDP Fund, helping support the completion of more than 3,700 additional income-restricted homes across Boston. For every dollar spent from the fund, an additional $6 in City, state and federal resources has been leveraged to create or preserve affordable housing.

The administration is also proposing targeted changes to commercial Linkage requirements to support new commercial development. The changes would freeze commercial Linkage fees at their current levels through 2027 and extend the payment schedule from two to seven installments for affordable housing. The payment schedule for the Neighborhood Jobs Trust in support of jobs training will remain at two installments. Commercial developments would continue to contribute funding for affordable housing and job training, while gaining additional time to make those payments, easing upfront financing pressures. The changes are intended to support future commercial development without reducing existing Linkage obligations.

The proposed amendments are expected to be considered by the BPDA Board on November 12, followed by consideration by the Boston Zoning Commission. The Inclusionary Zoning amendments would also go before the Boston City Council for consideration.

"We know that the economic conditions facing development today are very different from just a few years ago, and we need to be thoughtful about how our policies respond," said Kairos Shen, Chief of Planning for the City of Boston. "By providing greater flexibility and reducing upfront costs, we can help make more housing and commercial development financially feasible while preserving the affordability requirements that are so important to Boston's future."

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"We are very appreciative of the City's focus on finding creative ways to improve the very challenging economics of building housing in Boston," said Brian Kavoogian, CEO of National Development.

"Mayor Wu's proposal addresses the economic reality of the cost of building housing and will be a valuable tool for developers in partnership with the city in unlocking new housing starts," said Jessica Hughes, Managing Director at Tishman Speyer.

"Projects between seven and nine units have not been financially viable in this economic climate," said Principal of Juice Capital Evan Lank. "Increasing the Inclusionary Zoning threshold would serve as a meaningful pro-housing policy adjustment, helping to address affordability concerns in the City of Boston over the long-term."

"We support this change because it does two things Boston needs at once: it helps get residential projects moving again, and it generates real funding for deeply affordable homes," said Tanya Hanell, Co-executive Director of the East Boston CDC. "At the East Boston CDC we've seen firsthand what IDP funding can do. It helped us acquire 114 homes in the Blue Line portfolio and keep families in East Boston. This is a practical step that will help us do more of that work in East Boston and across the city."

"These are common-sense changes that recognize the economic realities facing housing development today," said Dara Kovel, CEO of Beacon Communities. "Rising costs and financing challenges have made it increasingly difficult to get new projects off the ground. By providing greater flexibility while maintaining its commitment to affordable housing, the city is taking a practical approach that will help more developments move forward, create much-needed homes, and strengthen Boston's housing future."

The proposed changes are one part of the Wu administration's comprehensive approach to addressing the housing crisis by increasing housing supply, expanding affordability, and helping residents remain in their communities.  Since Mayor Wu took office, nearly 40,000 homes have been completed, entered construction, or advanced into the development pipeline, including nearly 12,000 income-restricted homes. More than 16,700 homes are complete, and another 6,000 are under construction.

To create more housing, the City is investing in new developments, making publicly-owned land available for housing, converting underused buildings into homes, and deploying new financing and tax tools to help projects move forward. At the same time, programs like Welcome Home Boston are creating new opportunities for residents to become homeowners, build wealth, and put down roots in their neighborhoods, while strengthened protections for renters and housing stability resources are helping to prevent displacement and keep residents in their communities.

Together, these efforts reflect the Wu administration's commitment to using every available tool to build more housing, preserve and expand affordability, and ensure that residents of all incomes can find a stable home and build a future in Boston.

About the Mayor's Office of Housing

The mission of the Mayor's Office of Housing (MOH) is to foster healthy, vibrant, and welcoming communities for all by ensuring stable, green, accessible housing and sustainable use of land. The MOH achieves this by creating and preserving income-restricted housing, supporting residents in buying and maintaining their homes, and developing housing policies that promote access and long-term stability. MOH also works to prevent evictions, implements housing solutions for people experiencing homelessness, and works to make Boston's housing stock healthy, resilient, and environmentally sustainable. For more information, please visit the MOH website.

About the Planning Department

The City of Boston's Planning Department shapes growth that serves Boston's residents and centers their needs. Our mission is to address our City's greatest challenges: resilience, affordability, and equity, and to take real estate actions and prioritize planning, development, and urban design solutions that further these priorities. We seek to build trust with communities through transparent processes that embrace predictable growth and shape a more inclusive city for all. Learn more at bostonplans.org, and follow us on Bluesky and Instagram.

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