Skip to main content
H 7372Housing

Towns and Cities - Zoning Ordinances

This bill standardizes rules for affordable housing requirements in zoning, including developer fees and density bonuses.

Held for study
Population
Affected
35
Email Legislator
Introduced Jan 28, 2026Committee House Municipal Government & Housing

Plain-English Summary

This legislation updates the "inclusionary zoning" laws in Rhode Island. It mandates that if a municipality requires affordable housing in new developments, the requirement must apply to projects with 10 or more units, and at least 15% of those units must be affordable. It gives developers the option to pay a "fee-in-lieu" instead of building the affordable units, with a minimum fee of $40,000 per unit. The bill also establishes a "density bonus," allowing developers to build more units than usually allowed if they include affordable housing. Unused fees collected by towns must eventually be transferred to the state.

For younger readers

This new rule helps make sure there are enough homes that people can afford to buy or rent. When builders want to make a new neighborhood with many houses, they have to make some of them cost less money so more families can live there. If the builder does not want to build the cheaper houses, they have to pay a fee to the town instead. The town must use that money to build affordable homes within three years. If the town waits too long, the state takes the money to make sure the homes get built.

Who & Where It Applies

Impacted groups
Real Estate DevelopersMunicipal Planning BoardsLow-Income FamiliesHome BuyersMunicipal Governments
Impacted communities
All, Tiverton

Constitutional & Fiscal Check

None Likely. Zoning regulations and inclusionary housing mandates are generally considered a valid exercise of the state's police power to promote the general welfare. The bill provides a density bonus and options (fee-in-lieu), which helps mitigate arguments that the requirement constitutes an uncompensated taking of property.

Estimated cost
Developers: Amount unknown
Estimated revenue
Municipalities: Amount unknown

Bill Analysis

Both viewpoints
For Progressives
  • Prevents municipalities from setting arbitrarily high thresholds to avoid inclusionary zoning by capping the trigger at 10 units, ensuring more developments contribute to affordable housing stock.
  • Mandates that fees collected by towns must be used within three years or forfeited to the state, preventing wealthy towns from hoarding funds to stall affordable housing development.
  • Prohibits municipalities from restricting affordable single-family dwellings to fewer than three bedrooms, ensuring that affordable units are suitable for families rather than just individuals.
  • Allows developers to opt-out of building on-site affordable units by paying a fee ("fee-in-lieu"), which can perpetuate economic segregation by keeping low-income housing out of specific luxury developments.
  • The minimum fee-in-lieu floor of $40,000 may be too low in high-wealth areas, making it financially advantageous for developers to pay the fee rather than integrate affordable units, effectively bypassing the goal of mixed-income communities.
  • Mandates density bonuses (more market-rate units) for developers, which could lead to overdevelopment in communities without guaranteeing commensurate investments in public infrastructure or transit.
For Conservatives
  • Codifies the right of the developer to choose a "fee-in-lieu" option, providing business flexibility and preventing the government from forcing them to manage affordable housing units against their will.
  • Provides a mandatory density bonus (one market-rate unit for every affordable unit), allowing property owners to maximize the profitability and utility of their land.
  • Standardizes zoning regulations across the state, reducing the ability of local zoning boards to create arbitrary, anti-business hurdles for development projects.
  • Undermines local control by dictating zoning thresholds, bedroom counts, and fee structures to municipalities, overriding the will of local town councils and residents.
  • Empowers the state to seize locally collected funds (fee-in-lieu payments) if they are not spent within three years, redistributing local assets to a state agency.
  • Imposes a 30-year deed restriction on private property and mandates price controls on 15% of units, interfering with the free market and property rights.

Votes

Loading votes...

Full Bill Text

Changes to existing Rhode Island law · 4 additions

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 fifteen percent (15%) of the total units proposed for 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. A zoning ordinance that 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. The total number of units for the development may include less than fifteen percent (15%) affordable units after the density bonus described in subsection (c) of this section is determined. A municipality shall not limit the number of bedrooms for applications submitted under this section to anything less than three (3) bedrooms per dwelling unit for single-family dwelling units.

(b) A zoning ordinance that includes inclusionary zoning may provide that the affordable housing must be built on-site or it may allow for 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, subject to applicable setback, lot width, or frontage requirements or the granting of relief from the same, a municipality shall allow the addition of one market rate unit for each affordable unit required 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. The total number of units for the development shall equal the number originally proposed, including the required affordable units, plus the additional units that constitute the density bonus. Local regulations shall provide for reasonable relief from dimensional requirements to accommodate the bonus density under this section. A municipality shall provide, and an applicant may request, 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 may be listed in the zoning ordinance, but shall not be an exclusive list. Notwithstanding any provisions of this section, the town of Tiverton shall be allowed to determine its density bonuses based upon its underlying zoning.

(1) Inclusionary zoning requirements shall not be applied where there is a limitation on the development density at the subject property under the regulations of a state agency, such as the coastal resources management council or department of environmental management that prevents the use of the density bonus set forth in this section.

(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, and an application seeks to utilize fee-in-lieu, the use of such fee 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 that utilizes a fee-in-lieu, off-site construction or rehabilitation, or donation of land suitable for development of the required affordable units shall not be eligible for the density bonus outlined in this section.

(2) An application that seeks to utilize a fee-in-lieu of the construction or provision of affordable housing must be reviewed 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.

(i) Notwithstanding subsection (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).

(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 three (3) years of collection. The municipality shall include in the housing element of their local comprehensive plan 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 three-year (3) period after receipt. A municipality shall transfer all fee-in-lieu payments that are not allocated within three (3) years of collection, including funds held as of July 1, 2025, to the executive office of housing for the purpose of developing affordable housing within that community. Funds shall be deposited into the Housing Production Fund established pursuant to § 42-128-2.1.

(f) [Deleted by P.L. 2025, ch. 278, art. 9, § 16.]

SECTION 2. This act shall take effect upon passage.