SECTION 1.  Section 9 of Chapter 40A of the General Laws, as appearing in the 2002 Official Edition, is hereby amended by adding the following paragraph:-

“Notwithstanding anything to the contrary in this section, a town may adopt a zoning by-law that requires all plans for a residential subdivision or multi-unit residential project of 10 or more units to provide that up to 25 per cent of the total number of units shall be reserved for the construction of dwelling units affordable to persons whose household income does not exceed 120 per cent of the area median income, as such income is determined by the federal Department of Housing and Urban Development.  In lieu of the construction of the required affordable dwelling units within the project, the by-law may provide for the construction of such units off-site or the payment of sufficient funds to a separate account created by the city or town for such purpose.  Any by-law adopted under the provisions of this paragraph shall also allow for an increase in density by reducing dimensional requirements to the extent that the project proponent would be permitted to construct one additional unit for every 10 units that are constructed. The municipality is hereby empowered to set up said separate account to be administered by the municipal treasurer. The powers set forth in this paragraph are in addition to, and do not in any way derogate from, other municipal powers that allow municipalities to encourage inclusionary zoning.”

SECTION 2.  This act shall take effect upon its passage.