Aligning Policy and Housing Outcomes
Inclusionary Zoning
Update Inclusionary Zoning Regulations
Case Study — Inclusionary Zoning, Newton, MA
In 2018, the City of Newton, Massachusetts began a
process to revise their Inclusionary Zoning policy. Housing
affordability was worsening, and the City was experiencing
an influx of large residential and mixed-use projects which
provided ample opportunities to increase the overall
number of affordable housing units.
The existing IZ policy was both confusing in its language
and intention and was not leveraging private development
effectively to produce affordable units. The City hired a
consultant to create a financial feasibility model which
could test different residential development scenarios
(both owner and renter) to better understand the potential
impacts of the changes the City and housing advocates
were calling for.
The results of the financial feasibility model showed the
City could indeed update the IZ policy to create stronger
linkages between the size of the project and affordable
housing requirements. For example, larger rental projects
were required to set aside a higher percentage of
affordable units. The new policy also created income tiers
based on HUD area median income (AMI) thresholds
which ranged from 50% of AMI to 110% of AMI. The City
also included options for developers to provide fewer units
but make them more deeply affordable to households at
30% of AMI.
Nashua Housing Study - 67
The City’s new IZ policy has different calculations
and requirements for ownership projects and rental
projects requiring different levels of affordability.
Affordable ownership units are offered at 80% and
110% of AMI while rental units can go as low as
30% of AMI.
There are also calculations for cash payments and
specific circumstances defining when the cash
payment option may be considered favorable.
Smaller projects between 7 and 9 units have the
option of cash payments, the City Council can grant
a Special Permit to allow cash payment, and in
instances where the percentage set aside
calculation results in a fraction of a unit less than
0.5. The cash payment from the development is
deposited into the Inclusionary Zoning Fund which
is then distributed equally to the Newton Housing
Authority and the City of Newton. These funds can
only be applied to affordable housing supporting
households at or below 80% of AMI.
Sources: Newton IZ Policy
Newton IZ Guidebook
Newton IZ Information
ASSOCIATES INC
Newton IZ Requirements for Rental Projects
Renial Projects: Number of Inclusionary Units Required
Tier Level 7-20 UNITS 21+ UNITS
Tier 1: 50%-80% AMI 15% 15%
Tier 2: 110% AMI 0% 2.5%
Total 15% 175%
Rental Projects: Number of Inclusionary Units Required
EFFECTIVE January 1, 2021
- 20 21-99 100+
Tier Level
UNITS UNITS UNITS
Tier 1: 50%-809% AMI 15% 15% 15%
Tier 2: 110% AMI 0% 2.5% 5%
Total 15% 17.5% 20%
Newton IZ Requirements for Ownership Projects
Ownership Projects: Number of Inclusionary Units Required
Tier Level 7-16 17-20 21+
UNITS UNITS UNITS
Tier 1: 80% AMI 15% 10% 10%
Tier 2: 110% AMI 0% 5% 7.5%
Total 15% 15% 17.5%
Ownership Projects: Number of Inclusionary Units Required
EFFECTIVE January 1, 2021
7416 | 1720 | 2499 | 100+
Tele UNITS | UNITS | UNITS | UNITS
Tier 1: 80% AMI 15% | 10% | 10% | 10%
Tier 2: 110% AMI o% | 5% | 75% | 10%
Total 15% | 15% | 175% | 20%
