2014 -- H 7632

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LC004662

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

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A N   A C T

RELATING TO TOWNS AND CITIES -- ZONING ORDINANCES

     Introduced By: Representatives Shekarchi, McNamara, Gallison, Lombardi, and Lima

     Date Introduced: February 26, 2014

     Referred To: House Municipal Government

     It is enacted by the General Assembly as follows:

     SECTION 1. Section 45-24-46.1 of the General Laws in Chapter 45-24 entitled "Zoning

Ordinances" is hereby amended to read as follows:

     45-24-46.1. Inclusionary zoning Inclusionary zoning -- Affordable housing

requirements – Fees-in-lieu of construction and provision of affordable housing. – (a) A

zoning ordinance requiring that has the option for the inclusion of affordable housing as part of a

development ("inclusionary zoning") shall provide that the housing will be affordable housing, as

defined in section 42-128-8.1(d)(1), will be created and that the affordable housing will constitute

not less than ten percent (10%) of the total units in the development, and that the units will

remain affordable for a period of not less than thirty (30) years from initial occupancy enforced

through a land lease and/or deed restriction enforceable by the municipality and the state of

Rhode Island.

     (b) A zoning ordinance which contains such inclusionary zoning must provide that the

inclusionary zoning is not mandatory but rather a voluntary option for the applicant as part of the

proposed development. If the applicant chooses to build affordable housing units, whether

directed by the municipality to be located on or off the subject development site, then the

municipality must provide to the applicant incentives such as density bonuses of market rate

and/or affordable housing, or subsidies for the cost of the building/rehabilitation of each

affordable unit. Additionally a municipality may allow a fee-in-lieu of the construction or

provision of affordable housing within said municipality, however, the choice of said fee-in-lieu

shall belong solely to the applicant and only after the applicant chooses to be subject to

inclusionary zoning for the proposed development. All development incentives and subsidies

available in the municipality for the construction or provision of affordable housing shall also

apply to the fee-in-lieu option.

     (c) This fee-in-lieu of the construction provision of affordable housing shall be applied on

a per-unit basis and may be used for new developments, purchasing property and/or homes,

rehabilitating properties, or any other manner which creates additional low or moderate income

housing as defined in § 45-53-3(9):

     (1) For affordable single family homes and condominium units, the per-unit fee shall be

the difference between the maximum affordable sales price for a family of four (4) earning eighty

percent (80%) of the area median income as determined annually by the U.S. Department of

Housing and Urban Development and the average cost of developing a single unit of affordable

housing. The average cost of developing a single unit of affordable housing shall be determined

annually based on the average per-unit development cost of affordable homes financed by Rhode

Island Housing over the previous three (3) years, excluding existing units which received

preservation financing.

     (2) Notwithstanding subsection (c)(1), in no case shall the per-unit fee for affordable

single family homes and condominium units be less than forty thousand dollars ($40,000).

     (d) The municipality shall deposit all in-lieu payments into restricted accounts, which

shall be allocated and spent only for the creation and development of affordable housing within

the municipality serving individuals or families at or below eighty percent (80%) of the area

median income. The municipality shall maintain a local affordable housing board to oversee the

funds in the restricted accounts and is encouraged to allocate the funds within five (5) years. The

municipality shall include in the housing element of its local comprehensive plan, if applicable,

the process it will use to allocate the funds.

     (e) As an alternative to the provisions of subsection (d), the municipality may elect to

transfer in-lieu payments promptly upon receipt or within five (5) year period after receipt to the

housing resources commission or Rhode Island housing and mortgage finance corporation for the

purpose of developing affordable housing within that community.

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TOWNS AND CITIES -- ZONING ORDINANCES

***

     This act would provide that zoning ordinances that contain inclusionary zoning must

provide incentives to developers who build affordable housing or would allow a developer to pay

a fee-in-lieu of constructing the affordable housing. It would be the developer's choice as to

whether to construct affordable housing or pay a fee-in-lieu of construction of the affordable

housing. Further, this would set forth what a municipality is to do with fees paid in lieu of

construction.

     This act would take effect upon passage.

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