Legislature grants Boston flexibility to extract more affordable housing commitments from developers

Massachusetts Association of Community Development Corporations President Joseph Kriesberg.Sam Doran/Pool

Mayor Martin J. Walsh is leaving a present for his successor as he heads toward a new gig in the Biden administration: more powers to extract affordable housing commitments from developers.

Thanks in part to a frenzied last-minute lobbying effort, the state Legislature last week passed a bill that gives Boston much more flexibility in two key programs.

First, it strengthens the rules the city uses to get many residential developers to set aside units at affordable prices or subsidize construction elsewhere. Second, it removes restrictions on how often city officials can change the rules of its so-called linkage program for developers of large commercial projects.

The old linkage restrictions “really constrained the ability of the city of Boston to set its own agenda,” said Joe Kriesberg, chief executive of the Massachusetts Association of Community Development Corporations. “It’s really hard for the mayor of Boston to address the housing challenges in the city if every major policy has to go through the State House sausage-making factory.”

Despite the COVID-19 pandemic, 2020 was a banner year for big projects in Boston, generating enough commitments through the two programs to eventually build more than 2,800 income-restricted housing units, steer another $50 million to various future housing projects, and add nearly $9 million for job training.

The pandemic just underscored the need to strengthen both programs, said Sheila Dillon, Walsh’s housing chief.

“Issues like housing and job training and economic security have become even more important,” Dillon said.

Many advocates want the city to do more for affordable housing. The Walsh administration, meanwhile, has been trying to strike a balance to avoid putting too heavy of a burden on developers and risking halting some projects. All of them hope the new legislation can help with that balancing act.

But since Walsh has been nominated to be President-elect Joe Biden’s Labor secretary, it will in all likelihood be up to subsequent mayors to make use of these new tools.

It helped, then, that Walsh’s housing effort was also a big priority for the City Council, which includes at least two members vying to succeed him.

“Let’s be honest, we need the money,” said Councilor Lydia Edwards, a major proponent for the bill. “More importantly, we need the autonomy [from] the State House.”

Under the city’s current linkage program, developers of commercial projects of at least 100,000 square feet in size pay Boston $10.81 per square foot, with most of the money going to a city housing trust fund and one-sixth to a city-managed job training fund.

Edwards said the linkage requirements were low because state law had prohibited changes more than once every three years and capped increases in the fee to the local rate of inflation. Councilors will now consider increasing the requirements, she said, while being mindful of not hamstringing development.

The other big change from the legislation is to the city’s inclusionary development policy, which seeks to get residential developers of 10 units or more to reserve some as affordable, or provide cash for affordable housing.

The policy had been in place via an executive order of the mayor. The legislative change enables the city to bake this into its zoning codes, much like what other cities and towns do now. Generally speaking, eligible developers must set aside 13 percent of apartments or condos in a development at affordable prices or pay for the equivalent of 18 percent at a nearby location. (For projects in outlying neighborhoods, the off-site requirement is 15 percent.)

In the past, city officials could only ask for such commitments if developers sought variances from a property’s existing zoning or if the projects are on city land. While variances are a common practice, as the city advances new zoning plans for certain neighborhoods, more development will be allowed without such variances — making a more universal policy necessary.

“As a result of all the upzoning, we could have been negatively impacting our ability to create affordable units,” said Brian Golden, the head of the Boston Planning & Development Agency. “We were stuck between a rock and a hard place. Now we don’t have to worry about that.”

Boston economic development chief John Barros said the changes could make Boston more attractive to employers.

“When we’re talking to companies about coming to Boston, this ends up being a selling point, the fact that we do have a stream that is investing in affordable housing and workforce development,” Barros said.