Housing Mitigation Requirements in Hillsborough County, New Hampshire: Nashua's Inclusionary Zoning Ordinance

Nashua's Inclusionary Zoning: a real, numeric set-aside, not just a housing goal

Nashua's Land Use Code contains a dedicated Inclusionary Zoning provision (Chapter 190, Article VI, Section 190-48, with its specific numeric requirements laid out in an attached "Table 48-1 Inclusionary Zoning Policy Matrix") that requires a share of units in qualifying new residential development to be set aside as affordable, rather than leaving affordability entirely to the market. The city describes the tool as a direct response to Nashua's cost-of-living pressures and to the Housing Accessibility goals of its 2021 Imagine Nashua Master Plan, and the ordinance has been actively amended since -- most notably by ordinance O-21-073, which revised the Inclusionary Zoning Supplemental Use Regulations. This is not aspirational planning language; it is a standing zoning requirement administered by the city's Community Development Division on qualifying applications today.

The ordinance's set-aside requirement is tiered rather than flat: Table 48-1 distinguishes between "Citywide" projects (anywhere in Nashua outside the Downtown) and "Downtown" projects, and within each, sets separate percentage requirements tied to two different income-tier targets (referred to in the code as Tier 1 and Tier 2 Target AMI levels). Secondary sourcing describes an overall affordable-unit target commonly cited around 20% of units, generally keyed to roughly 80% of area median income (AMI) as the affordability benchmark -- but the exact percentage a given project owes depends on which tier and location column of Table 48-1 applies to it, which this page has not independently reproduced in full (see the methodology note below).

The trade: a density bonus for building the affordable units

In exchange for including affordable units, the ordinance grants a density bonus -- extra market-rate units the developer would not otherwise be allowed to build. The city's own illustrative example: a ten-unit project subject to a ten-percent inclusionary requirement, paired with a roughly 2-to-2.5:1 bonus density ratio, can build nine or more market-rate units plus additional bonus units on top of its base entitlement, for one required affordable unit -- with the bonus multiplier itself scaling, in other secondary sourcing, from roughly 1.25x up to 5.00x depending on the income tier targeted and whether the affordable units are ownership or rental. In practice, that means the specific bonus a project receives is directly tied to how deep an affordability tier it commits to serving, not a single fixed ratio across the board.

A 99-year deed restriction, not a one-time compliance step

The affordability requirement does not expire once a certificate of occupancy is issued. For-sale affordable units under the ordinance are deed-restricted for 99 years, with resale subject to a maximum sale-price restriction and buyer-eligibility standards (income limits, asset limits, household size, among others). Affordable rental units are enforced through a deed restriction and a lien granted to the City of Nashua rather than a resale-price mechanism, since they don't change ownership the same way. For anyone evaluating a Nashua multi-unit residential parcel, the inclusionary units are effectively a multi-generational income and resale restriction on a portion of the building, not a cost that's paid once and forgotten.

Manchester, the county's other large city, does not have the same mechanism

Manchester, Hillsborough County's largest city, went through its own major land-use overhaul in the same general period -- the Board of Mayor and Aldermen ordained a new, consolidated Manchester Land Use Code on December 16, 2025 (its first zoning-ordinance rewrite since 2001, effective March 1, 2026), aimed at increasing housing supply and reducing procedural friction, including implementing the accessory-dwelling-unit-by-right requirement that New Hampshire's RSA 674:72 now imposes statewide. Available secondary sourcing on Manchester's new code does not describe an inclusionary zoning or affordable-set-aside requirement comparable to Nashua's Section 190-48 -- so don't assume Nashua's requirement, or its density-bonus trade, applies to a Manchester project. Confirm the current Manchester Land Use Code directly with the city's Planning and Community Development Department for what it actually requires there.

What to check before buying multi-unit residential land in Nashua

1. Confirm with Nashua's Community Development Division whether your specific project size and unit count trigger Section 190-48's Inclusionary Zoning requirement, and get the current Table 48-1 percentage and AMI tier that applies to a Citywide versus a Downtown location -- this page has not independently reproduced every cell of that table.
2. Get the current density-bonus ratio the city will apply to your specific affordability commitment; it scales with how deep an income tier you target and whether the affordable units are ownership or rental, not a single fixed number.
3. Build the 99-year deed restriction (for-sale units) or the deed restriction and city lien (rental units) into your underwriting as a permanent feature of the project, not a temporary compliance cost.
4. Ask whether an off-site mitigation payment or fee-in-lieu alternative is currently available instead of building the affordable units on-site -- some New Hampshire inclusionary ordinances allow this, and terms vary and are subject to amendment (as ordinance O-21-073 already shows for this one).
5. If you're instead looking at land in Manchester, don't assume Nashua's Section 190-48 requirement applies -- confirm directly with Manchester's Planning and Community Development Department what the new (December 2025 / effective March 2026) Manchester Land Use Code actually requires for your project.