City Manager Fidel Maltez is asking the city council to amend its inclusionary housing zoning by increasing the size of projects required to provide affordable housing and lower the percentage of affordable units per development.
In a letter to the council, Maltez stated that the current inclusionary zoning policy successfully advanced affordable housing in the city, but that the current level of restrictions is overtly stringent and unintentionally hindering new development in Chelsea.
“Chelsea’s growth has historically been powered by development,” Maltez said. “The current inclusionary zoning requirements are making it extremely challenging for projects to secure funding. As a result, even projects that have been permitted, are facing delays or are unable to move forward due to the prevailing fiscal environment.”
These constraints are preventing the new housing, commercial space, and economic investment that the city relies on to sustain its schools, public safety, and infrastructure, stated Maltez.
“It is important to recognize the success of the policy to date,” Maltez stated. “Since 2017, Chelsea has achieved the third highest level of affordable housing in the State of Massachusetts. However, the current framework has made it increasingly difficult to incentivize additional development, which is essential for continued growth and prosperity in our community.”
The current policy applies to projects with 10 units or more. Maltez is requesting that the revised policy apply to projects with 100 units or more.
“We have heard from small and local developers that managing inclusionary zonings is administratively difficult,” Maltez stated. Developers have to run lotteries, complete income verification processes and get approvals from the City. This process often results in units being vacant for a period of time. We believe that this change will unlock a tremendous amount of projects, particularly in our downtown area.”
Changing the required number of affordable units from 15 percent to 10 percent would align with statewide policies such as the MBTA Communities Act and put Chelsea more in line with its neighbors, Maltez said.
The proposed amendment would also allow for affordable units for incomes at 80 percent of Area Median Income (AMI) or below. The current policy requires that developers provide units at 30, 50, and 80 percent AMI.
“The City will continue to work with affordable housing developers that provide 100% affordable housing,” Maltez said. “We currently have 270 Cottage, 440 Broadway and 361 Broadway that will bring more than 100-units of affordable housing online. Into the future, we have an active pipeline of 100% affordable housing projects that will build on and expand our affordable housing units.”
Finally, the proposed amendment would change the fees-in-lieu provision for affordable housing units to $100,000. The current policy allows developers to pay the City $400,000 in place of complying with inclusionary zoning.
“While the intent of this fee was good, the price was set too high to make an impact,” stated Maltez. “Since the implementation of inclusionary housing in 2017, the City has never received such a payment. The City could use these payments to fund much needed housing needs such as rental assistance for existing residents, first time home buyer programs, or contributing to 100% affordable housing projects.”
The city manager said the need for change is urgent given broader economic uncertainty.
“Under Massachusetts’ Proposition 2½, the City’s ability to increase revenue is fundamentally constrained,” Maltez said. “The most effective and sustainable way for Chelsea to generate additional revenue is by growing its tax base. That growth depends directly on new development.”
Without new development, Maltez said the city risks limiting its ability to fund schools, support public safety, and invest in critical infrastructure.
“To move forward, we must be willing to think creatively and adapt to current realities,” Maltez stated. “Updating the inclusionary zoning policy represents an opportunity to strike a better balance, maintaining our commitment to affordability while making development financially viable again. This is not simply an option; it is a necessary step to unlock new housing production and economic growth in Chelsea.”
The city council moved further discussion of the proposed zoning amendments to a subcommittee on conference.
“I think this is important enough topic for subcommittee on conference so that everybody can show up,” said District 1 Councilor Todd Taylor.
Councillor-at-Large Leo Robinson said that he helped make the original inclusionary zoning amendment, and said further discussion was warranted on the amendment, noting that some changes could be beneficial to the city.
Council President Roberto Jimenez-Rivera said he would work with the city manager to schedule the subcommittee meeting as soon as possible.