2014 -- H 7632 SUBSTITUTE A AS AMENDED

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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. - (a) A zoning ordinance requiring the inclusion of

affordable housing as part of a development shall provide that the housing will be affordable

housing, as defined in section §42-128-8.1(d)(1),; 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 that includes inclusionary zoning may provide that the affordable

housing must be built on-site or utilize one or more alternative methods of production, including,

but not limited to, off-site construction or rehabilitation, donation of land suitable for

development of the required affordable units, and/or the payment of a fee in lieu of the

construction or provision of affordable housing units. For all projects subject to inclusionary

zoning, density bonuses and other incentives shall be established by the community and shall

apply to offset differential costs of below-market units.

     (c) This fee in lieu of the construction or provision of affordable housing shall be the

choice of the developer or builder applied on a per-unit basis and may be used for new

developments, purchasing property and/or homes, rehabilitating properties, or any other manner

that 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 that received

preservation financing.

     (2) Notwithstanding subsection (c)(1) of this section, 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 that 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 shall allocate the funds within two (2) years. The municipality shall

include in the housing element of their 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 the two-year (2) period after receipt to

the housing resources commission or Rhode Island housing for the purpose of developing

affordable housing within that community.

     (f) Rhode Island housing shall report to the general assembly and the housing resources

commission the amount of fees in lieu collected by community; the projects that were provided

funding with the fees; the dollar amounts allocated to the projects; and the number of units

created.

     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

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     This act would provide that zoning ordinances that contain inclusionary zoning may or

require developers to build affordable housing on-site 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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