INCLUSIONARY DEVELOPMENT POLICY December 8, 2015
AGENDA
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1. What is the Inclusionary Development Policy?
2. History
3. 2015 Inclusionary Development Policy Process
4. 2015 Inclusionary Development Policy
5. Implementation
6. Next steps
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1 What is Boston’s Inclusionary Development Policy?
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Boston’s IDP applies to any proposed residential project that has ten or more units
And is financed by the City or built on any property owned by the City;
Or requires zoning relief
The IDP program in effect today requires that each project provide affordable units in an amount not less than fifteen percent (15%) of the number of market rate units in the project, or ~13.04% of total units
Developers, with the approval of the BRA, can also meet their affordable housing obligations
By building 15% of the units off-site;
Or providing an Affordable Housing Contribution equal to the number of affordable units required for the project multiplied by the Affordable Housing Cost Factor ($200,000)
WHAT IS THE INCLUSIONARY DEVELOPMENT POLICY? TODAY
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The housing units provided through the IDP are targeted towards moderate to middle income households.
Rental units are made available to households earning up to 70% of Area Median Income (AMI).
Homeownership units are made available to households earning 80% and 100% of AMI. Half of the units for 80% AMI and the other half for 100% AMI households.
WHAT IS THE INCLUSIONARY DEVELOPMENT POLICY? WHO IS TARGETED?
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WHAT IS THE INCLUSIONARY DEVELOPMENT POLICY? WHO IS TARGETED?
Inclusionary Development Policy
Household Size 70% AMI 75% AMI 80% AMI 90% AMI 100% AMI
1 $48,250 $51,700 $55,150 $62,050 $68,950
2 $55,150 $59,100 $63,050 $70,900 $78,800
3 $62,050 $66,500 $70,900 $79,800 $88,650
4 $68,950 $73,900 $78,800 $88,650 $98,500
5 $74,450 $79,800 $85,100 $95,750 $106,400
6 $80,000 $85,700 $91,400 $102,850 $114,250
Income Limits
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WHAT IS THE INCLUSIONARY DEVELOPMENT POLICY? WHO IS TARGETED?
Presentation Title
Maximum Sales Price
Bedrooms 80% AMI 90% AMI 100% AMI
Studio $144.400 $166,600 $188,700
1 $173,900 $199,800 $225,700
2 $203,600 $233,000 $262,700
3 $233,000 $266,500 $299,700
4 $262,700 $299,700 $336,700
Maximum Affordable Rents
Bedrooms 50% AMI 60% AMI 65% AMI 70% AMI
Micro $686 $823 $892 $961
Studio $763 $915 $992 $1,068
1 $891 $1,068 $1,157 $1,246
2 $1,017 $1,221 $1,322 $1,424
3 $1,145 $1,374 $1,488 $1,602
4 $1,272 $1,526 $1,654 $1,781
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2 History
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February 2000: An Order Relative to Affordable Housing established by Executive Order
October 2003: BRA adopts a temporary Inclusionary Development Demonstration Program
February 2005: An Order Relative to the Affordable Housing Cost Factor established by Executive Order
May 2006: An Order Relative to the Inclusionary Development Policy established by Executive Order
September 2007: An Order Relative to the Inclusionary Development Policy’s Income Policy established by Executive Order
HISTORY IDP Program
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December 2004: BRA adopts the Affordable Housing Requirements policy
July 2009: BRA adopts three policies:
Guidance on Building Affordable Units On-Site
Asset Policy for the Sale and Rental of Affordable Housing Units
Inclusionary Development Policy Funding Guidelines
June 2010: BRA adopts Inclusionary Development Program – Guidance for Developers
January 2015: BRA adopts Enhancement and Changes to Affordable Housing Compliance and Monitoring
HISTORY IDP Program – BRA Clarification Policies
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IDP HISTORY
IDP Component 2000 2003 2005 2006
On-Site 10% of total units 15% of market rate units
15% of market rate units
15% of market rate units
Off Site 15% of total 15% of total 15% of total 15% of total
Cash Out Condo 15% of total multiplied by $52,000 per unit
15% of total multiplied by $52,000 per unit
15% of total multiplied by $97,000 per unit
15% of total at 50% of price differential ($200,000 floor)
Cash Out Rental 15% of total multiplied by $52,000 per unit
15% of total multiplied by $52,000 per unit
15% of total multiplied by $97,000 per unit
15% of total multiplied by $200,000 per unit
History Summary Table
EXAMPLE: 49 UNIT DEVELOPMENT
IDP Component 2000 2003 2005 2006
On-Site 4.9 6.39 6.39 6.39
Off Site 7.35 7.35 7.35 7.35
Cash Out Condo $364,000 $364,000 $679,000 15% of total at 50% of price differential ($200,000 floor)
Cash Out Rental $364,000 $364,000 $679,000 $1,400,000
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IDP HISTORY STATUS AND OUTCOMES OF THE IDP SINCE 2000
Inclusionary Development Policy
CURRENT STATUS Total New Units Afford New Units Afford New Owner
Units
Afford New Rental
Units
Low Income
(<60% AMI)
Middle Income (60%-120%
AMI) TDC
COMPLETE 13,612 1,496 521 974 93 1,403 $5,405,000,000
IN CONSTRUCTION 4,904 551 47 482 5 546 $2,320,000,000
TOTAL 18,516 2,047 568 1,456 98 1,949 $7,725,000,000
REVENUES
REVENUE COLLECTED $79,396,005
TO BE COLLECTED $39,411,093
TOTAL REVENUE COMMITMENT1 $118,807,098
REVENUE PIPELINE2 $22,011,354
Onsite/Offsite Component
Cash in Lieu Component
1 Projects that have triggered IDP obligations by pulling a building permit 2 Projects BRA Board approved but not permitted
EXPENSES
AWARDED $70,488,212
EXPENDED $33,986,034
UNEXPENDED AWARDS $36,502,178
OUTCOMES OF AWARDED PROJECTS
NEW LOW INCOME (<60% AMI) 1,215
NEW MIDDLE-INCOME (60-120% AMI) 382
TOTAL NEW AFFORDABLE UNITS 1,597
TOTAL PROJECT COSTS $768,000,000
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3 2015 IDP Process
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Mayor’s Office/BRA/DND staff working sessions (December 2014 onwards)
Independent consultant (June 2015)
Housing advocates (May 2015 onwards)
Development community (June 2015 onwards)
2015 IDP PROCESS STAKEHOLDER ENGAGEMENT
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4 2015 Inclusionary Development Policy
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2015 INCLUSIONARY DEVELOPMENT POLICY
IDP Component Zone A Zone B Zone C
On-Site 13% of total units 13% of total units 13% of total units
Off Site 18% of total in vicinity 18% of total in vicinity 15% of total in vicinity
Cash Out Condo 18% of total at 50% of price differential ($380,000 floor)
18% of total at 50% of price differential ($300,000 floor)
15% of total at 50% of price differential ($200,000 floor)
Cash Out Rental 18% of total at $380,000 18% of total at $300,000 15% of total at $200,000
Summary Table
*As of right
On-site/off-site combinations are allowed
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1. Create three geographic zones to determine IDP Contributions: Zone A, Zone B and Zone C
2. Increase IDP Contributions
3. Increase off-site requirements to 18% for Zone A and Zone B, 15% for Zone C
4. Increase IDP Contribution percentages to 18% in Zone A and Zone B
5. Allow for the possibility of up to 100% AMI for rentals in Zone C
6. Define off-site “Vicinity” as within a half-mile radius of the development regardless of Zone
7. Clarify that on-site requirements are 13% of total units
WHAT CHANGES ARE BEING PROPOSED? 2015
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8. Allow for off-site units to be provided through direct construction or rehabilitation of existing units
9. Specify payment schedules
10. Allow developers to pay IDP Contributions in one upfront present-value calculated lump sum
11. Emphasize that developers may not rent ownership units
12. Require that on-site affordable units be comparable to market-rate units
13. Require that off-site units must meet DND Affordable Housing Design and Construction Guidelines
14. Define units smaller than 450 SF as micro-units and mandate that they be sold or rented at 90% of studio AMI
15. Exempt projects that have over 40% of their units deed restricted
WHAT CHANGES ARE BEING PROPOSED? 2015
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2015 Zones
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City Council District Overlay
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State Representative District Overlay
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State Senate District Overlay
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• Zones were determined by analyzing sales data supplied to DND by The Warren Group.
• Sales data included property type, location, and living area.
• Using BRA neighborhoods, as updated in March 2014, zones were designated based on city-wide sales from FY 2013 to FY 2015:
Zone A: Median sales price falls in the top third of sales prices
Zone B: Median sales price falls in the medium third of sales prices
Zone C: Median sales price falls in the lower third of sales prices
DETERMINATION OF ZONES 2015
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EXAMPLE: 49 UNIT DEVELOPMENT
IDP Component Zone A Zone B Zone C
On-Site 6.37 6.37 6.37
IDP Contribution $140,600 $111,000 $74,000
Off Site 8.82 = 9 8.82 = 9 7.35
Cash Out Condo 18% of total at 50% of price differential ($380,000 floor)
18% of total at 50% of price differential ($300,000 floor)
15% of total at 50% of price differential ($200,000 floor)
Cash Out Rental $3,351,600 $2,646,000 $1,470,000
*As of right
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5 IDP Implementation
Inclusionary Development Policy
IDP IMPLEMENTATION 2015
December 8, 2015
Inclusionary Development Policy
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6 Next Steps
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December 9, 2015: Mayor Martin J. Walsh signs the Executive Order: An Order Relative to Inclusionary Development
December 10, 2015: BRA Board adopts and endorses the Executive Order and adopts the 2015 Inclusionary Development Policy
January 1, 2016: Implementation date
Presentations to stakeholders
NEXT STEPS
Inclusionary Development Policy
QUESTIONS