By Adam Swift
At a special meeting last week, the planning board held an informational meeting on potential changes to the city’s inclusionary zoning ordinance.
The proposed ordinance changes are still subject to a public hearing and a planning board recommendation to the city council before a potential final vote on the approval from the council. The planning board is scheduled to hold a special meeting for the public hearing on May 19.
The inclusionary zoning changes were proposed by City Manager Fidel Maltez as a way to encourage development in Chelsea. After receiving feedback on the initial proposal, Maltez offered a scaled down version of the changes to the council earlier this year.
During last week’s planning board meeting, Will Cecio of the city’s permitting and land use planning department provided an overview of inclusionary zoning, the current inclusionary zoning situation in the city, and heard from planning board members about their ideas for the ordinance.
Cecio said the general consensus from the planning board was to encourage the city to look at more creative ways to create both affordable housing and development in the city, from looking at square footage rather than unit count for affordable units to offering more incentives to renovate existing properties to add to Chelsea’s affordable housing stock.
“Inclusionary zoning really is a tool that municipalities have to advance two main goals – to produce more affordable housing units for low- and moderate-income households and to reduce income segregation by creating mixed-income developments,” said Cecio.
Inclusionary zoning requires or incentivizes new market rate development to set aside a certain percentage of deed-restricted affordable units.
“There’s no public funding for this, this is mainly relying on private subsidies from the developer, the property owner constructing this new market-rate development to basically figure it out and make the numbers work,” said Cecio. “This applies to both rental or home ownership properties. Then residents earning below the set AMI (Area Median Income) can apply to live in these units.”
In Massachusetts, most inclusionary zoning policies have a 10 to 15 percent affordability requirement for units with AMI thresholds between 60 and 80 percent.
Different studies have shown different levels of effectiveness for inclusionary zoning policies, Cecio said.
“This is a requirement placed on any new development, so to get new units, you need new development,” said Cecio.
The one thing that most studies show, he said, is that inclusionary zoning policies should be tailored to the local market and subject to regular review.
Chelsea’s current inclusionary zoning policy has been in effect since 2017 and has led to the creation of 49 affordable units in that time, Cecio said. The current policy requires affordable units for all new development of 10 units or more, and contains deeper AMI affordability guidelines than most surrounding communities.
The proposed ordinance changes call for 10 percent of units at 80 percent AMI, or 7 percent of units at 60 percent of AMI for all projects with 50 or more units with a review of the policy every two years.
In addition, Councilor-at-Large Leo Robinson has proposed an amendment that would set the unit count to kick in the inclusionary zoning for the West Chelsea-Market Basket zone at 100. Cecio said a proposed West Chelsea Overlay Zoning District would encourage the creation of larger residential developments in that area.
“Right now, our policy isn’t leading to the building of deeply affordable units,” said Cecio.
One of the goals of the revisions to the policy is to encourage new growth and bring additional revenue into the city coffers.
“In 2022, new growth tax revenue peaked, but this year it is at the lowest it has been in over 10 years,” said Cecio. “When you combine that with the loss of state and federal funds given the current presidential administration and existing market conditions we find ourselves in … the city is in a very tight spot financially and this really threatens city services and limits the ability of the city to provide new services.”
Cecio added that the inclusionary zoning policy revision is just one way the city is looking to expand revenue. He added that inclusionary zoning is also only one tool the city has to help create affordable housing.
“While 49 families or individuals have benefitted from (inclusionary zoning), and that’s nothing to sneeze at, but if our goal is to produce affordable housing through this policy, 49 units over nine years is just, quite frankly, not meeting our goal,” Cecio said.
The proposed revisions to the policy would allow development to occur and maintain an affordability requirement while allowing new growth to improve city services, he added, along with more housing units to address the housing shortage and more stabilized costs over the long term.
“We do want to unlock smaller developments to be built a little bit easier, to remove some of that burden from our smaller developers,” said Cecio. “The frequent review is really key here, because every single study has said it needs to be tailored to your market conditions and that you need to be constantly evaluating what these market conditions are and if your policy is working and adjusting to those conditions. Having more frequent review is a commitment to creating a more effective policy tool and evaluating its impacts; and I something for me is that ultimately, we had a tool that isn’t working right now.”