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Somerville Inclusionary Zoning Policy Analysis

Somerville, MA

Somerville, a dense inner suburb adjacent to Cambridge and downtown Boston, hired RKG Associates to evaluate a proposed change to the City's inclusionary zoning ordinance. The City sought to better understand the potential impacts that an increased percentage of required affordable housing may have on market rate housing development.

To determine the impact of a proposed change to the ordinance, RKG Associates built a financial feasibility model, designed to perform iterative analyses of various development types in changing market conditions. The model framework included a series of construction cost and market value assumptions that changed depending on a property's location within Somerville. The model was also sensitive to changes in the percentage of affordable units in a project and changes to corresponding household income limits.

The project resulted in the City increasing its required inclusionary housing percentage based on project size, as well as lowering the threshold for development size that would trigger the inclusionary ordinance. The City also incorporated a density bonus to help mitigate some of the financial hardship the revised policy could impose upon developers. Ultimately the change was viewed as a necessary step towards ensuring that one of the northeast's hottest housing markets remained accessible to a diverse population.

Photo Credit: Development Management Associates

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