Section 3. In its zoning ordinance or by-law, a city or town may adopt a smart growth zoning district in an eligible location and may include adjacent areas that are served by existing infrastructure and utilities, and that have pedestrian access to at least 1 destination of frequent use, such as schools, civic facilities, places of commercial or business use, places of employment, recreation or transit stations. A smart growth zoning district ordinance or by-law, or any amendment to or repeal of such ordinance or by-law, shall be adopted in accordance with section 5 of chapter 40A.

In creating such a district, a city or town may include qualifying areas within development districts approved by the economic assistance coordinating council pursuant to chapter 40Q or any area approved by a city or town as an urban center housing tax-increment financing zone pursuant to section 60 of chapter 40. In smart growth zoning districts, a city or town shall zone for primary residential use as of right and may also permit business, commercial or other uses consistent with primary residential use.