BOSTON — Boston Mayor Michelle Wu pitched zoning changes that she said will jump-start housing production by making it less costly for developers to build, but held firm on the core affordability requirements that critics have blamed for the slow-down. Wu on Monday proposed four changes to the city’s inclusionary zoning policy that requires new development to include an affordable housing ...

Boston Mayor Michelle Wu and Superintendent Mary Skipper speak during the Second Annual State of the Schools at Mass Boston, Oct. 19, 2026./ TNS).

Matt Stone/Boston Herald/TNS

BOSTON — Boston Mayor Michelle Wu pitched zoning changes that she said will jump-start housing production by making it less costly for developers to build, but held firm on the core affordability requirements that critics have blamed for the slow-down.

Wu on Monday proposed four changes to the city’s inclusionary zoning policy that requires new development to include an affordable housing component, and tweaks to its commercial linkage requirement that directs commercial developers to make payments to support affordable housing and job training initiatives in Boston.

The changes reduce upfront costs by giving developers more time to make payments to the city in lieu of creating affordable housing on-site and temporarily exempt certain small developments from including affordable units, but don’t change the heart of the mayor’s inclusionary development policy.

The number of income-restricted units developers are required to set aside in Boston housing projects increased from 13% to 20% in October 2024. That will not change under the mayor’s zoning proposal, which Wu framed as a compromise amid pressure from business leaders and developers to soften the requirements.

“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.

“This balanced approach is part of our administration’s broader strategy to build more homes, remove barriers to development, and ensure Boston remains a city where residents can afford to stay and thrive,” the mayor added.

The changes will allow residential developers to spread out their payments over seven annual installments should they choose to contribute to a city fund that goes toward building affordable housing elsewhere in Boston, in lieu of providing those income-restricted units on-site, as required by inclusionary zoning.

Wu’s proposal would revert back to the seven annual installments that were in place for the 50% IZ buyout before a series of changes took effect under her administration in October 2024. Those changes required developers to contribute two larger lump-sum payments to the city to buy out their IZ requirement.

“The larger upfront payments have affected lender interest and the ability to secure financing, as developers must either put up more equity or borrow more from their lenders, without any corresponding increase in revenue,” Andy Feldman, the city’s housing policy manager wrote in a memo to Chief of Planning Kairos Shen.

Sheila Dillon, the city’s chief of housing, said developers had contributed $200 million to the fund as of June, which advanced roughly 3,700 income-restricted units toward completion, when briefing reporters on Wu’s plan Monday.

The proposal also moves back to another aspect of the IZ policy that was changed by Wu and took effect in October 2024. Wu is proposing that the size of a new development that would trigger the policy be increased from seven to 10 units.

That change would be in effect for two years, and expire on Dec. 28, 2028. City officials estimate that it will lead to the production of 100 additional units per year.

Projects with 7-9 units typically create only one to two income-restricted units. Dillon said affordable housing advocates pushed for the change.

The city has also had conversations with small developers who have relayed that affordability requirements only become feasible beyond nine units, according to a Wu official.

“Projects between seven and nine units have not been financially viable in this economic climate,” said Principal of Juice Capital Evan Lank. “Increasing the inclusionary zoning threshold would serve as a meaningful pro-housing policy, helping to address affordability concerns in the city of Boston over the long term.”

Shen said the city will evaluate the change in two years, based on market conditions and its effectiveness in increasing the 7-9 unit housing stock.

Wu is also looking to ease the off-site restriction, which requires that affordable units be built within a half-mile radius of a development that took an IZ buyout.

Dillon did not elaborate on how far that off-site radius would be expanded, though when asked whether it would extend beyond city limits, she stated adamantly, “Absolutely not. Over my dead body.”

A final change calls for reducing the condominium payment-in-lieu fee for developers from 75% to 50% of the difference between market-rate and income-restricted home values, another rollback to pre-2024 IZ, Dillon said.

The other proposed policy change would freeze the commercial linkage payment increase that would otherwise rise in January by 4.09% for the amount commercial developments contribute to fund affordable housing and job training initiatives. The city froze this past year’s increase as well in 2025.

Payments are tied to square footage, and under the proposal, could be spread out over seven years, rather than two lump sum payments, in light of “difficult market conditions” that are hindering commercial development, according to Shen.

While the changes would be a limited rollback of affordability requirements, the core IZ requirement that increased under Wu — that 17-20% of units be set aside as income-restricted — remains the same.

That’s despite other cities like Cambridge taking a look at lowering that percentage threshold, due to stalled housing production.

Roughly 30,000 housing units have been approved in recent years in Boston, but have not been built due to financial constraints.

City officials said there are no plans for a more sweeping IZ rollback in Boston, but framed Wu’s proposal as a compromise that will make it more affordable for people to live here and less costly for developers to build.

Dillon said, “These changes, we believe, allow us to advance both market-rate projects and increase the amount of income-restricted housing we have in the city of Boston.”

The planning board will take up the changes on Thursday. All changes need Zoning Commission approval. The IZ requirements are also subject to review by the City Council.

“For years, I have advocated for the city administration to roll back affordability requirements to make it easier to develop and build more housing in Boston,” City Councilor Ed Flynn said. “We need to provide financial investors and real estate developers with the opportunity to put cranes in the sky and workers back to building housing.”

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