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SB 2588

AN ACT RELATING TO TOWNS AND CITIES -- ZONING ORDINANCES

2026 Regular Session Introduced by Lou DiPalma and 1 co-sponsor

Mandates that new developments include 15% affordable units with 30-year affordability, offers density bonuses and fee-in-lieu options with strict fund rules.

05/12/2026 Committee recommended measure be held for further study
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WeVote Research Nonpartisan
Bill Summary · SB 2588

Overview

SB 2588, introduced in the Rhode Island General Assembly for the 2026 session, updates inclusionary zoning provisions in towns and cities. It codifies requirements for affordable housing as part of new developments, establishes density bonuses and incentives, outlines options for on-site or alternative production (including fee-in-lieu), and sets rules for how funds from in-lieu payments must be used and managed. The act is effective upon passage and contains a notable exception allowing Tiverton to determine its density bonuses based on its underlying zoning.

Main purpose and intent

  • Create a statutory framework for inclusionary zoning (IZ) that ensures a portion of new developments include affordable housing.
  • Define affordability standards, duration, and enforcement mechanisms.
  • Offer developers options (on-site, off-site, land donation, or fee-in-lieu) to satisfy IZ requirements.
  • Allow municipalities to provide density bonuses, incentives, and subsidies to offset the costs of affordable units.
  • Specify use and management of fee-in-lieu funds and establish oversight for local affordable housing programs.
  • Provide a Tiverton-specific exception regarding density bonuses.

Key provisions and changes

  • Inclusionary housing requirements (a):

    • Affordable units must be at least 15% of total units.
    • Affordable units must remain affordable for at least 30 years via land lease and/or deed restriction enforceable by the municipality and state.
    • Threshold for triggering IZ cannot exceed 10 dwelling units; minimum of 3 bedrooms per dwelling unit for single-family required.
    • Total development units may fall below 15% after applying the density bonus in (c).

  • Production options (b):

    • On-site development or alternative methods may be allowed, including off-site construction/rehabilitation, land donation, or fee in lieu.

  • Density bonuses and incentives (c):

    • For projects meeting IZ, municipalities must allow one market-rate unit for each affordable unit, and reduce minimum lot area accordingly.
    • Municipalities may grant larger density bonuses for higher percentages of affordable housing.
    • Total units = original units + additional bonus units; reasonable relief from dimensional requirements to accommodate bonus.
    • Additional incentives/subsidies may be provided to offset costs of affordable units (not limited to a fixed list).
    • Tiverton exception: density bonuses in Tiverton will be based on its underlying zoning.
    • IZ not required where state agency density limits apply (e.g., CRMC/DEM constraints).

  • Fee-in-lieu (d):

    • If a development uses fee in lieu, per-unit fees are calculated as the difference between the maximum affordable sales price (80% AMI, as determined by HUD) and the average per-unit development cost (over prior 3 years, as calculated by RIHousing/RIHMFC).
    • Per-unit minimum fee: $40,000.
    • Fees must be deposited into restricted local accounts for affordable housing serving ≤80% AMI, overseen by a local affordable housing board, and spent within 3 years.
    • Process for allocation must be included in the municipality’s housing element and ordinance.

  • Alternate use of fee-in-lieu (e):

    • Unallocated or remaining funds after three years must be transferred to the state Housing Production Fund for local affordable housing development.

  • Administrative notes (d)(1)-(3):

    • Applications using fee-in-lieu/off-site options are not eligible for the density bonus.
    • Fee-in-lieu projects require planning board review (not administrative review).
    • Fee calculation methods and minimums apply as described.

Affected parties

  • Municipalities and their planning/zoning boards (creation and administration of IZ provisions, density bonuses, and subsidies).
  • Developers and builders (options for meeting IZ via on-site, off-site, land donation, or fee in lieu; eligibility for density bonuses; project net unit counts).
  • Occupants and potential residents (lower-income households up to 80% AMI) who would gain access to affordable units.
  • Tiverton (explicitly treated with a local-density-bonus determination rule).
  • Rhode Island Housing and Mortgage Finance Corporation (RIHMFC) and the Executive Office of Housing (due to fee-in-lieu fund management and annual cost determinations).

Procedural and timeline aspects

  • Effective date: Upon passage of the act.
  • Hydration of funds: In-lieu funds must be allocated within 3 years of collection; ongoing oversight by a local affordable housing board.
  • Transition/administration: Some provisions require planning board review (not administrative review) for fee-in-lieu applications.
  • Special note: The act includes a deletion reference (subsection removed earlier) and a Tiverton-specific density-bonus provision.

Summary

SB 2588 establishes a comprehensive framework for inclusionary zoning in Rhode Island municipalities, mandating at least 15% affordable units in qualifying developments, with a 30-year affordability period and enforceable restrictions. It offers on-site and alternative production options, and provides density bonuses and incentives to accommodate affordable units. It also sets stringent rules for fee-in-lieu programs, including minimum per-unit fees, restricted-use funds, and timelines for allocation, with a statewide mechanism to redirect unspent funds to the Housing Production Fund if necessary. Tiverton receives a locality-specific latitude on density bonus determinations. The bill takes effect immediately upon enactment.

Compiled from official sources — confirm details with the bill’s official record.

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