The current policy, adopted under the city's inclusionary zoning rules, requires developers of market-rate projects to set aside a portion of units at below-market rents or condominium prices. Wu's plan would lower those thresholds for some projects, particularly those in neighborhoods where construction costs and land prices have made development financially difficult. The mayor has argued that the existing requirements, while well-intentioned, are contributing to a housing production slump that ultimately undermines the city's ability to create more affordable homes.

"We need to be honest about the math," Wu said in a statement. "If projects don't get built, we don't get any affordable units at all. This is about finding a balance that keeps Boston building while still delivering meaningful affordability."

The proposal has drawn immediate pushback from housing advocates and some city councilors, who warn that weakening affordability requirements could lock in long-term losses of income-restricted housing at a time when the city's housing crisis shows no signs of easing. They point to data showing that Boston's median rent remains among the highest in the nation and that thousands of families are on waiting lists for subsidized units.

"We can't solve a housing shortage by asking for less affordable housing," said one community organizer involved in housing policy discussions. "The city should be looking at ways to reduce construction costs and streamline permitting, not lowering the bar for developers."

The debate comes as Boston, like many cities, grapples with the aftermath of elevated interest rates, rising construction costs, and a post-pandemic shift in demand for certain types of housing. Several large mixed-use projects in neighborhoods including Dorchester, Roxbury, and South Boston have been delayed or scaled back in recent months, with developers citing financing challenges.

Wu's proposal is expected to be taken up by the Boston Planning & Development Agency and the City Council in the coming weeks. If approved, it would mark a significant shift in the city's approach to housing policy and could set the tone for how Boston balances growth with affordability in the years ahead.

City officials have not released a detailed timeline for the review, but Wu has indicated she wants to move quickly to prevent further project cancellations. The mayor's office said it would hold community meetings to gather feedback before any final vote.

For residents in neighborhoods where new construction has stalled, the outcome could determine whether long-promised affordable units ever materialize. For the city as a whole, the decision will test whether Boston can maintain its commitment to inclusionary housing while still encouraging the development needed to ease its chronic housing shortage.