AN ACT RELATING TO TOWNS AND CITIES -- ZONING ORDINANCES (Requires that affordable housing would be provided for with some developments.)

S2705

2026 -- S 2705
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LC005506
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STATE OF RHODE ISLAND
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2026
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A N A C T
RELATING TO TOWNS AND CITIES -- ZONING ORDINANCES

Introduced By:
Senators Gu, Burke, Mack, DiMario, and Kallman

Date Introduced:
February 27, 2026

Referred To:
Senate Housing & Municipal Government
It is enacted by the General Assembly as follows:
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SECTION 1. Section 45-24-46.1 of the General Laws in Chapter 45-24 entitled "Zoning
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Ordinances" is hereby amended to read as follows:
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45-24-46.1. Inclusionary zoning.
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(a) A zoning ordinance requiring the inclusion of affordable housing as part of a
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development shall provide that the housing will be affordable housing, as defined in § 42-128-
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8.1(d)(1);
that the affordable housing will be of comparable size and quality to the market-rate
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housing;
that the affordable housing will constitute not less than fifteen percent (15%) of the total
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units proposed for the development; and that the units will remain affordable for a period of not
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less than thirty (30) years from initial occupancy enforced through a land lease and/or deed
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restriction enforceable by the municipality and the state of Rhode Island. A zoning ordinance that
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requires the inclusion of affordable housing as part of a development shall specify the threshold in
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which the inclusion of affordable housing is required, but in no event shall a minimum threshold
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triggering the inclusion of affordable housing be higher than ten (10) dwelling units. The total
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number of units for the development may include less than fifteen percent (15%) affordable units
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after the density bonus described in subsection (c) of this section is determined. A municipality
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shall not limit the number of bedrooms for applications submitted under this section to anything
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less than three (3) bedrooms per dwelling unit for single-family dwelling units.
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(b) A zoning ordinance that includes inclusionary zoning may provide that the affordable
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housing must be built on-site or it may allow for one or more alternative methods of production,

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including, but not limited to: off-site construction or rehabilitation; donation of land suitable for
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development of the required affordable units
; and/or the payment of a fee in lieu of the construction
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or provision of affordable housing units
.
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(c)
Density bonus, zoning incentives, and municipal subsidies.
For all projects subject
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to inclusionary zoning, subject to applicable setback, lot width, or frontage requirements or the
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granting of relief from the same, a municipality shall allow the addition of one market rate unit for
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each affordable unit required and the minimum lot area per dwelling unit normally required in the
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applicable zoning district shall be reduced by that amount necessary to accommodate the
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development. Larger density bonuses for the provision of an increased percentage of affordable
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housing in a development may be provided by a municipality in the zoning ordinance. The total
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number of units for the development shall equal the number originally proposed, including the
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required affordable units, plus the additional units that constitute the density bonus. Local
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regulations shall provide for reasonable relief from dimensional requirements to accommodate the
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bonus density under this section. A municipality shall provide, and an applicant may request,
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additional zoning incentives and/or municipal government subsidies as defined in § 45-53-3 to
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offset differential costs of affordable units. Available zoning incentives and municipal government
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subsidies may be listed in the zoning ordinance, but shall not be an exclusive list.
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(1) Inclusionary zoning requirements shall not be applied where there is a limitation on the
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development density at the subject property under the regulations of a state agency, such as the
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coastal resources management council or department of environmental management that prevents
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the use of the density bonus set forth in this section.
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(d)
Fee-in-lieu.

To the extent a municipality provides an option for the payment of a fee-
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in-lieu of the construction or provision of affordable housing, and an application seeks to utilize
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fee-in-lieu, the use of such fee shall be the choice of the developer or builder applied on a per-unit
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basis and may be used for new developments, purchasing property and/or homes, rehabilitating
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properties, or any other manner that creates additional low- or moderate-income housing as defined
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in § 45-53-3(9).

Notwithstanding anything to the contrary in this section, when the size of a
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development triggers a requirement in a zoning ordinance for one or more affordable housing units,
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the unit(s) shall be created. Payment of a fee in lieu of the construction or provision of affordable
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housing units is permissible only to pay for fractions of units (i.e. when only a fraction of one full
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unit is required or for fractions of units beyond one or more full units).

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(1)
Eligibility for density bonus.
Notwithstanding any other provisions of this chapter, an
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application that utilizes a fee-in-lieu, off-site construction or rehabilitation, or donation of land
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suitable for development of the required affordable units shall not be eligible for the density bonus

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outlined in this section.
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(2) An application that seeks to utilize a fee-in-lieu of the construction or provision of
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affordable housing must be reviewed by the planning board or commission and is not eligible for
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administrative review under the Rhode Island Land Development and Subdivision Review
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Enabling Act of 1992, codified at §§ 45-23-25 — 45-23-74.
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(3)
Amount of fee-in-lieu.

For affordable single-family homes and condominium units,
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the per-unit fee shall be the difference between the maximum affordable sales price for a family of
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four (4) earning eighty percent (80%) of the area median income as determined annually by the
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U.S. Department of Housing and Urban Development and the average cost of developing a single
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unit of affordable housing. The average cost of developing a single unit of affordable housing shall
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be determined annually based on the average, per-unit development cost of affordable homes
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financed by Rhode Island housing and mortgage finance corporation (RIHMFC) over the previous
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three (3) years, excluding existing units that received preservation financing.

In order to pay for a
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fraction of an affordable single-family home or condominium unit, the fraction will be multiplied
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by the per-unit fee for the development. The per-unit fee shall be the difference between the
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maximum affordable sales price for a family of four (4) earning eighty percent (80%) of the area
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median income as determined annually by the U.S. Department of Housing and Urban
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Development and the average cost of developing a single unit of affordable housing. The average
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cost of developing a single unit of affordable housing shall be determined annually based on the
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average, per-unit development cost of affordable homes financed by Rhode Island housing over the
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previous three (3) years, excluding units that received preservation financing.
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(i) Notwithstanding subsection (d)(3) of this section, in no case shall the per-unit fee for
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affordable single-family homes and condominium units be less than forty thousand dollars
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($40,000).
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(4)
Use of fee-in-lieu.
The municipality shall deposit all in-lieu payments into restricted
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accounts that shall be allocated and spent only for the creation and development of affordable
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housing within the municipality serving individuals or families at or below eighty percent (80%)
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of the area median income. The municipality shall maintain a local affordable housing board to
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oversee the funds in the restricted accounts and shall allocate the funds within three (3) years of
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collection. The municipality shall include in the housing element of their local comprehensive plan
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and shall pass by ordinance, the process it will use to allocate the funds.
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(e) As an alternative to the provisions of subsection (d), the municipality may elect to
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transfer in-lieu payments promptly upon receipt or within the three-year (3) period after receipt. A
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municipality shall transfer all fee-in-lieu payments that are not allocated within three (3) years of

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collection, including funds held as of July 1, 2025, to the executive office of housing for the purpose
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of developing affordable housing within that community. Funds shall be deposited into the Housing
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Production Fund established pursuant to § 42-128-2.1.
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(f) [Deleted by P.L. 2025, ch. 278, art. 9, § 16.]
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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 require that the inclusion of affordable housing as part of a development
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shall provide that the affordable housing will be of comparable size and quality to the market rate
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housing. If there is a requirement for one or more affordable housing units triggered by the size of
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a development, the units shall be created. The average cost of developing a single unit of affordable
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housing would be determined annually based on the average, per unit development cost of
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affordable homes financed by Rhode Island housing over the previous three (3) years.
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This act would take effect upon passage.
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