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Boise staff find most zoning incentives fail to "pencil"; propose simpler menu and longer affordability terms
Summary
City presentation found most sustainability and affordability incentives in the modern zoning code are not financially feasible for developers. Staff propose simplifying incentives into a menu, increasing incentive value while lowering requirements, and extending affordability durations to 50 years for greater community benefit.
Kyle Patterson, director of the Boise City Department of Organizational Effectiveness, told the Planning and Zoning Commission that a financial feasibility review of the city’s modern zoning-code incentives shows most are not producing the intended results.
Patterson said the department’s consultants and staff compared the cost of requirements to the value of zoning incentives and concluded "the incentives just aren't financially feasible" in almost all tested development contexts. "For an incentive to work, the value of the incentive has to be more than the cost of what we're requiring," he said.
Why it matters: the city adopted a new zoning code in part to produce more affordable and sustainable housing. Patterson said the code’s incentive structure is intended to change developer behavior, but early data and developer interviews indicate few projects are using the incentives and many of the projects that do would have built the same way without them.
What the analysis found: consultants tested hypothetical project types and found a feasibility gap in most cases. Patterson cited a small example gap ($31,000) for a low-intensity affordability incentive and a very large gap—about $6.5 million—for some podium-style affordable projects. One exception was a podium building using sustainability incentives, where the analysis found a roughly $500,000 surplus driven largely by the high cost of podium parking and the relative lower cost of the sustainability requirements.
Recommendations: Patterson and staff recommended three main changes: 1) simplify and consolidate incentives (fewer, more consistent options); 2) adopt a menu-based approach allowing developers to stack or select incentives that match a project's needs; and 3) recalibrate both sides of the equation—raise incentive value and lower the cost of requirements—so incentives can “pencil” without affecting the city budget.
On affordability, staff propose standardizing the eligible level to 80% of area median income (AMI) for zoning incentives (while deeper affordability at 60% AMI would still be supported through direct city financial investments such as land trust, gap financing, fees waivers). Patterson said the proposal would reduce the percent of units required for the incentive (from 25–50% down to 10–25%) to improve feasibility, and increase the required affordability duration from 20 years to 50 years. "The difference between 20 and 50 years isn't just a big difference in a cost perspective," he said; but the longer duration yields a larger community benefit.
Engagement and next steps: staff plan targeted engagement this summer with developers and community stakeholders, aim to submit a zoning ordinance amendment in August and return to the public hearing calendar in October. Boise State University will separately study the zoning-code impact on housing supply, but Patterson said that work will take two to four years to complete because of data and methodology complexity.
Selected reactions and clarifications: commissioners asked about the developer interviews (a mix of large and small firms was interviewed) and whether incentives would reduce demand for deeper affordability. Patterson replied that incentives at 80% AMI are targeted to produce units without direct city subsidy, while 60% AMI or lower generally require direct city finance. He said the city performs a housing needs assessment every three years and is investing in direct housing production for lower AMI levels.
The Department of Organizational Effectiveness will publish a public dashboard this summer showing zoning approvals and incentive usage and plans a KPI dashboard in fiscal year 2026. Staff and consultants will also return with more detailed financial modeling once engagement yields further input.
Ending: Patterson said the city will monitor results and iterate the incentive package annually as market conditions and usage data arrive. "We're gonna use data to make it better," he said.
