Consultants advising Newton’s review of the city’s inclusionary zoning (IZ) policy told the Zoning & Planning Committee on Wednesday that a return to a single, blended-income requirement would produce more occupied affordable units without materially worsening developer returns and that a universal mandate for on-site resident services would be costly and hard to implement.

The consultants, led by Kyle Talente and Jason Mesorowski, presented interviews, feasibility modeling and comparisons with nearby Greater Boston communities. They said the city’s current two-tier structure—one portion targeted around 65% of area median income (AMI) and a smaller slice targeted at higher AMIs—is producing units that remain vacant or unused at the higher tier. To address that, the consultants recommended folding the higher-tier allocation into a single blended target at about 65% AMI, with modest adjustments to set-aside percentages so the change is roughly revenue neutral for a typical project.

The consultant team framed the recommendation as an attempt to preserve development feasibility while increasing the chance the new affordable units will actually house residents. They showed examples from Boston, Brookline, Cambridge and Somerville, and explained how Boston uses small-area fair market rents (SAFMRs) tied to ZIP codes to make deeper affordability levels workable by combining them with voucher revenue. The consultants warned Newton that seeking lower AMI targets without an offsetting revenue source would generally reduce project returns and risk slowing development.

Most of the committee’s questions focused on specifics: whether the housing authority could guarantee vouchers to support extremely low-income units, how the proposed single tier would affect projects of different sizes, and whether Newton’s existing “extremely low income” (ELI) option—already in the ordinance but seldom used—should be changed to be more accessible. Consultants said the ELI option (which reaches roughly 30% AMI under the current code but includes an on-site services requirement) has not been taken by developers in Newton and that the on-site-services requirement is a significant disincentive.

On resident services, Talente and Mesorowski said smaller projects (for example those that provide fewer than 10 IZ units) are disproportionately affected because the fixed cost of providing an on-site services coordinator does not scale with the number of affordable units. They recommended against a citywide requirement that each development provide on-site resident services. Instead they proposed improving coordination and signage to connect residents to existing city and nonprofit service providers (for example Newton DHHS and local nonprofits) and exploring a centralized hotline or referral system, possibly staffed during regular business hours, to reduce duplication and lower costs.

The consultants also recommended changing the city’s partial-unit payment rule. Under current practice, fractional obligations above a rounding threshold require a developer to provide an entire additional unit (or make a partial payment computed against a Total Development Cost figure). The consultants modeled the effect and said the current rounding rule creates “troughs” in financial returns that can disincentivize building at certain margins (for example developers may prefer a nine‑unit project that triggers fewer IZ obligations rather than a 10‑unit project that requires two IZ units). They recommended eliminating the round‑up rule and accepting fractional cash payments calculated against the city’s established unit valuation (the current partial‑unit payment value cited in the meeting was $650,000, last updated in July 2022).

The consultants said elder housing with on-site medical services is a different financial case: service costs dominate the economics of such projects. For developments that combine housing with significant medical and long-term care services, they recommended taking cash payments in lieu of on-site IZ units and using those funds to support specialized, externally managed affordable elderly housing projects rather than trying to force traditional IZ rules into care‑intensive developments.

Direction and next steps: the consultants said they will return with more sensitivity analysis (including examples for 100+ unit projects) and requested another session next month. Staff and consultants said they would follow up with the housing authority about voucher availability, coordinate further with DHHS on referral options, and provide additional modeling showing the tradeoffs for alternative AMI targets (the committee asked explicitly for comparisons in the 50–65% AMI range).

Why it matters: Newton’s IZ update will shape how the city secures and targets affordable housing in new supply. Small changes to the ordinance—AMI targets, the partial‑unit payment method, and how on-site services are handled—affect both whether developers move forward with projects and whether affordable units actually house the residents they were intended to serve.

The committee did not take a final vote on amendments. Staff will include these recommendations and follow-up analysis in the next meeting packet for further committee review.

Ending: Consultants and staff said they will return with follow-up modeling, more jurisdictional examples, and potential redlines showing the proposed single-tier wording. Committee members asked for additional street‑level examples and a short list of policy tradeoffs so the group can compare alternatives ahead of any formal ordinance change.