Boston Would Exempt 7- to 9-Unit Projects From Affordable Housing Rules Under Wu’s New Plan

Mayor Michelle Wu’s administration on Monday, Nov. 9, proposed another round of changes to Boston inclusionary zoning rules, aiming to restart stalled housing and commercial projects without cutting the city’s core 17% affordability requirement. The plan would temporarily exempt projects of seven to nine units, let developers spread affordable-housing payments over seven years instead of two, and freeze commercial linkage fees through 2027.

“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,” Wu said in a statement from the city’s planning department. The proposals go to the Boston Planning and Development Agency board on Thursday, Nov. 12.

The four inclusionary zoning changes

The city’s Inclusionary Zoning policy, updated by Wu in 2022 and in effect since 2024, requires projects of seven or more units to make 17% to 20% of homes income-restricted, on site or elsewhere in Boston. The administration proposes to:

• Raise the threshold from seven to 10 units for two years, exempting seven-, eight- and nine-unit projects during that period. The city used a 10-unit threshold before the 2023 reforms, the Dorchester Reporter noted.
• Let developers who pay into the city’s affordable housing fund instead of building units on site spread payments over seven annual installments instead of two. Housing chief Sheila Dillon said rental developers would still owe the same total.
• Cut the condominium payment-in-lieu fee from 75% to 50% of the gap between a unit’s market value and its income-restricted value, which the city says restores the earlier level.
• Drop the rule that off-site affordable units must be within half a mile of the market-rate project. Locations would still have to be in Boston. Asked whether units could end up outside the city, Dillon told WBUR: “Over my dead body.”

Why small projects are the target

Planning chief Kairos Shen said Boston has historically averaged about 14 projects a year in the seven-to-nine-unit range, but only one such project has been recorded in 2026, the Dorchester Reporter reported. Small projects are common in neighborhoods such as Dorchester and Mattapan.

By The Boston Report’s calculation from Shen’s figures, small-project activity is down about 93% from the historical pace. City officials told WBUR the higher threshold could add 100 or more units a year. Shen said developers might build up to about 15 units on a site once freed from the requirement, but stressed that the exemption does not guarantee small projects will become financially feasible, citing land, construction and building-code costs.

Housing production remains well behind the mayor’s goals. The city permitted 2,448 units in the first nine months of 2026, which puts it on track for its best year since 2022 but far short of the 13,000 homes Wu hoped to build in her first term, according to WBUR. The city says inclusionary policies have produced more than 5,000 income-restricted homes and more than $200 million for its affordable housing fund.

Linkage fees frozen

Commercial linkage fees, which large commercial and institutional projects pay for affordable housing and job training, would stay at current levels through 2027 instead of rising by about 4.09% on Jan. 1, Shen said. The housing portion could be paid in seven installments instead of two, while job-training payments stay at two. Only one commercial project under review would owe linkage in 2026, WBUR reported.

Reaction and next steps

Tenant advocates and developers both backed the package in statements released by the city. Kathy Brown of the Boston Tenant Coalition said the changes “are preferred over rolling back IZ from 20% to 13% of units built.” Evan Lank of Juice Capital said seven-to-nine-unit projects “have not been financially viable in this economic climate.”

After the BPDA board, the inclusionary changes go to the City Council, which would have 60 days to reject them by a two-thirds vote, and then the Zoning Commission. The linkage changes need Zoning Commission approval before Jan. 1. The proposals follow voters’ narrow rejection of the Question 7 starter-home lot-size measure and recent openings such as the 39 senior apartments at Montaña Urbana in Jamaica Plain. For more Boston news, see our local coverage.

Sources

• City of Boston Planning Department: Mayor Michelle Wu proposes targeted zoning changes to support housing development
• WBUR: Boston officials announce new housing proposals to entice developers
• Dorchester Reporter: Wu eyes more changes to ‘inclusionary’ rules in bid to jump-start building surge