2023 -- H 6058 SUBSTITUTE A

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2023

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A N   A C T

RELATING TO TOWNS AND CITIES -- ZONING ORDINANCES

     Introduced By: Representatives Abney, Shekarchi, Biah, Azzinaro, and Hull

     Date Introduced: March 03, 2023

     Referred To: House Judiciary

     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 § 42-128-

8.1(d)(1); that the affordable housing will constitute not less than ten percent (10%) twenty-five

(25%) of the total units in the development; and that the units will remain affordable for a period

of not less than thirty-years (30) from initial occupancy enforced through a land lease and/or deed

restriction enforceable by the municipality and the state of Rhode Island. A zoning ordinance which

requires the inclusion of affordable housing as part of a development shall specify the threshold in

which the inclusion of affordable housing is required, but in no event shall a minimum threshold

triggering the inclusion of affordable housing be higher than ten (10) dwelling units.

     (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.

     (c) Density bonus, zoning incentives and municipal subsidies. 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. subject to applicable setback, lot

width, or frontage requirements or the granting of relief from the same, a municipality shall allow

the addition of two (2) market rate units for each affordable unit provided and the minimum lot

area per dwelling unit normally required in the applicable zoning district shall be reduced by that

amount necessary to accommodate the development. Larger density bonuses for the provision of

an increased percentage of affordable housing in a development may be provided by a municipality

in the zoning ordinance. Nothing herein shall prohibit a municipality from providing, or an

applicant from requesting additional zoning incentives and/or municipal government subsidies as

defined in § 45-53-3 to offset differential costs of affordable units. Available zoning incentives and

municipal government subsidies shall be listed in the zoning ordinance.

     (c) This (d) Fee-in-lieu. To the extent a municipality provides an option for the payment of

a fee-in-lieu of the construction or provision of affordable housing, such 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) Eligibility for density bonus. Notwithstanding any other provisions of this chapter, an

application which utilizes a fee-in-lieu of the construction or provision of affordable housing shall

not be eligible for the density bonus outlined in this section.

     (2) An application which seeks to utilize a fee-in-lieu of the construction or provision of

affordable housing must be permitted by the planning board or commission and is not eligible for

administrative review under the Rhode Island Land Development and Subdivision Review

Enabling Act of 1992, codified at §§ 45-23-25 - 45-23-74.

     (3) Amount of fee-in-lieu. 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 and mortgage finance corporation (RIHMFC) over the previous three (3)

years, excluding existing units that received preservation financing.

     (2)(i) Notwithstanding subsection (c)(1) (d)(3) 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).

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     (d)(4) Use of fee-in-lieu. 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 three

(3) years of collection. The municipality shall include in the housing element of their local

comprehensive plan, if applicable, and shall pass by ordinance, 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) three (3) year period

after receipt. A municipality shall transfer all fee-in-lieu payments which are not allocated within

three (3) years of collection, including funds held as of July 1, 2024, to the housing resources

commission or Rhode Island housing RIHMFC for the purpose of developing affordable housing

within that community.

     (f) Rhode Island housing Both the municipalities and RIHMFC shall report annually with

the first report due December 31, 2024 to the general assembly, the secretary of housing 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 on January 1, 2024.

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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 increase the amount of allowable units per acre for all projects subject to

inclusionary zoning as well as other incentives and subsidies to offset differential costs of

affordable units.

     This act would take effect on January 1, 2024.

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