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Boston 2030 3rd Quarter Report 2016

Last updated: 11/21/16

Boston 2030 3rd Quarter Report 2016

Summary of the Boston 2030 Report for the Third Quarter of 2016.

Housing Boston 2030 is the City's strategy to responsibly plan for our growth. By creating housing across demographics and neighborhoods, we will help ensure that growth and prosperity reach every corner of Boston.

To accomplish this goal, we are going to help create 53,000 new units of housing at a variety of income levels across the City:

  • 44,000 units of housing for the workforce
  • 5,000 units of housing for our senior citizens
  • 4,000 units to stabilize the market and bring rents and housing prices under control.

You can find information on the third quarter of 2016 below.

Still have questions? Contact:
Neighborhood Development
26 Court Street
8th, 9th, and 11th Floors
Boston, MA 02108-2501
United States

QUARTERLY SUMMARY & SCORECARD

ACCOMMODATING GROWTH

With 18,786 new units permitted or complete and another 21,720 units in the City’s development pipeline, a total of 40,500 new units are built or underway – 76% of the City’s 53,000-unit target for 2030. Permitting to date is running at 123% of pace needed to achieve the City housing production target. The 1,565 new units permitted this quarter represent the largest number of new units permitted in a single quarter in 20 years of record-keeping.
As the 21,721 units in the pipeline are built, the gap between the number of units needed to house Boston’s projected population growth and its actual housing supply will continue to abate. It is hoped that this equalization of the supply/demand imbalance will lead to stabilization that goes beyond the Boston’s central neighborhood core, where some evidence of price stabilization has
already been documented.

PERMITTED Q3 2016 PERMITTED TO DATE % TARGET
1,565 18,786 123%

AFFORDABLE HOUSING

The City is running above or near target in both low-income and extremely low-income housing production. Low-income senior housing, currently running at 66% of target, is expected to increase substantially in the year ahead because of a new line item in its FY16 City Budget that enabled the City to support three new elderly developments planned for FY17 and FY18 starts, coupled with the use of City-owned land that has been made available for this purpose.
In Q3 16, the City improved its tracking/reporting of middle class housing production with the addition of actual rents/prices for 8,500 new units that have been completed to date. This new information shows that the combined production rate of deed-restricted and unrestricted market middle income housing produced for a broad range of income tiers is running at 92% of  target, substantially higher than previously reported.

AFFORDABILITY GROUP INCOME TARGET UNITS TO DATE % TARGET
Extremely Low-Income Under 30% AMI 422 103%
Low-Income Family Under 60% AMI 1,467 98%
Low-Income Elderly Under 60% AMI 284 66%
Middle Income 60-120% AMI 5,270 92%

AFFORDABLE HOUSING PRESERVATION

The City is exceeding targets on its preservation goals. Most notably, while losses of units with Expiring Use/Affordability Restrictions (“EURs”) of up to 148 units by this point in the Plan would be consistent with the city’s goal of keeping EUR losses under 3% through 2030, only 23 units have been lost to date.
With an occupancy rate of 98.3%, BHA is running at 101% of its 97% occupancy target.

PRESERVATION CATEGORY UNITS AVAILABLE
ON 9/30/16
% TARGET
Expiring Use Units 29,369 100.4%
BHA Occupied Units 12,408 101.3%

STUDENT HOUSING

No new dorm beds were permitted or completed in Q3 2016. With 3,072 new beds either completed or starting
construction since 2014, dormitory production is running at 98% of target.

ACTIVITY Q3 2016 2014 TO Q3 2016 % TARGET
Undergrad Dorms Permitted 0 3,072 98%

ANTI-DISPLACEMENT

The Office Of Housing Stability commenced operations in September. This first in the nation Office is exploring ways to expand upon and supplement the already existing array of anti-displacement services that the City offers. The work of the Boston Home Center, the Neighborhood Housing Division, and the Supportive Housing Division in preventing and averting foreclosures and homelessness respectively is represented below, along with the nascent efforts of the Office of Housing Stability.

ANTI-DISPLACEMENT ACTION Q3 2016 2014 TO DATE
Homeowners Retained: Foreclosure Prevention 44 579
Tenancies Retained: Foreclosure Prevention 27 348
Homelessness Prevention 113 1,522
Subsidized Housing Evictions Prevented 64 64
Tenancies Saved: Acquisition Opportunity Program 8 8
TOTAL 256 2,521

 

ACCOMMODATING GROWTH

PROGRESS TO DATE

GOAL: CREATE 53,000 NEW UNITS BY 2030

With 18,786 units permitted or complete, housing production is running at 123% of the pace needed to achieve the City’s target by 2030. Combining the 18,786 units that are already permitted or complete with the 21,720 units that are in the City’s development pipeline results in a total active development portfolio of 40,506 units – 76% of the City’s 53,000-unit production target. As shown here, more than half of the development pipeline (12,062 of 21,720 units) has already received the necessary zoning approvals from the City and can proceed to permitting at any time.

ACCOMMODATING GROWTH

Q3 2016 was the best quarter to date for new unit completions. If the 21,721 units in the pipeline continue to be completed at this pace, the gap between the number of units needed to house Boston’s projected population growth and its actual housing supply will continue to narrow. It is hoped that a continuing equalization of this supply/demand imbalance will lead to a rise in rent stabilization. Current real estate trend analysis has seen evidence that rent stabilization has begun in Boston’s very highly priced central neighborhood core. With more building occurring in Boston’s non-central neighborhoods, it is hoped that a similar stabilization effect will begin to occur in more moderately priced housing stock.

Housing Development Pipeline

Progress_Toward_53,000_unit_goal

Q3 2016 HIGHLIGHTS

New Production Activity

345 HARRISON AVENUE is the largest project to start construction this quarter. This 584 unit development will provide 58 new affordable units. Compared to the quarterly target of 663 units, Q3 2016 was a highly productive quarter in all four phases of development:
Completions: 1,735 new units came on the market, the third-largest number of completions in a single quarter in 20 years of record-keeping. 
Permits: The 1,565 new units permitted this quarter represent the largest number of new units permitted in a single quarter in 20 years of record-keeping. 
Development Approvals: 2,244 new units approved through BPDA and DND. So far in 2016, 6,789 new units have been approved by DND and the BPDA.
New Permit Applications: are running at nearly double the average quarterly pace of 2014 or 2015. This is a strong indicator of confidence in Boston’s housing sector on the part of the development community.

 

Q3 2016 HOUSING PRODUCTION ACTIONS  
ACTION UNITS
COMPLETED 1,735
PERMITTED 1,565
APPROVED 2,244
APPLIED 1,911

Harrison Ave

345 HARRISON AVENUE is the largest project to start construction this quarter. This 584-unit development will provide 58 new affordable units.

Low-Income Housing

PROGRESS TO DATE

GOAL: CREATE 6,500 NEW LOW-INCOME, NON-ELDERLY UNITS BY 2030
With 1,467 units permitted to date, low-income housing production is running at 98% of the target pace needed to create 6,500 new units by 2030.
 
These 1,467 low-income units were in 57 projects that created or preserved 1,749 units of housing. The City invested $81 million and provided 22 City-owned development sites. These resources leveraged another $404 million in State and Federal resources.
 
GOAL: TARGET AT LEAST 1,500 AFFORDABLE UNITS TO EXTREMELY LOW INCOME HOUSEHOLDS
With 422 new units permitted, ELI housing production is running at 108% of the target pace needed to create 1,500 new units by 2030.
Of these 422 units, 348 have been targeted to homeless households.

permitted low income unites

permitted extremely low-income units

 

Parcel 25

PARCEL 25: Permitted in Q3 2016, this long vacant parcel will become a 5 story, mixed use building, with commercial and non-profit tenants on the first two floors, and 40 units of affordable rental housing above.

Q3 2016 HIGHLIGHTS

Low-Income Production Activity Three new low-income developments with 55 low-income units were permitted this quarter:
  • Parcel 25 Phase 1A on Mission Hill
  • 52 Montebello Road in Jamaica Plain
  • and Safe Haven
With 55 units permitted this quarter, and an additional 247 approved for development, there are now 1,440 low-income units in the pipeline.
 
Five developments with 338 new units (247 low income) and 90 preserved units were approved through DND or BPDA this quarter:
  • BHA Orient Heights Redevelopment Phase 1
  • Jackson Square Building M
  • Olmsted Green Low Income Rental
  • Olmsted Green Mixed Income
  • 206-212 West Broadway
The Mosaic, with 145 new units, including 60 low-income and 43 new middle-class units was the largest affordable development completed this quarter.
Q3  2016 Low-INCOME HOUSING ACTIONS
ACTION LOW-INCOME TDC
COMPLETED 60 $58,800,000
PERMITTED 55 $18,400.000
APPROVED 247 $172,625,000

 

Olmsted Green

OLMSTED GREEN’s third phase includes 47 low-Income rental housing units, all of which will only be available to those earning less than 60% of AMI, with special set-asides of units for formerly homeless individuals and those who are DMH clients. This third phase also includes 41 units targeted to middle income earners making between 80-100% of AMI.

The Mosaic
THE MOSAIC: This 145 unit building is the largest affordable housing development completed in Q3 2016; marketing has begun of the 60 affordable rentals in the development.

Preserving Affordable Housing

PROGRESS TO DATE: PUBLIC HOUSING

GOAL: MAINTAIN AN OCCUPANCY RATE IN BHA HOUSING OF 97% OR MORE
With a 98.3% occupancy rate this quarter, the BHA has achieved its highest occupancy rate since the Housing Plan began in 2014.
 
GOAL: USE INNOVATIVE FINANCING STRATEGIES TO RENOVATE AND REDEVELOP BOSTON’S PUBLIC HOUSING
The BHA currently has a 5,500-unit development agenda underway worth over $2.3 billion in 13 projects. All of these developments have large, complicated development budgets, and it will take some time to assemble all of the necessary financing. It is expected that these redevelopments will be implemented in phases over the next several years. 
 
The next pipeline project to proceed will be the Orient Heights Development Phase 1 in East Boston (120 new/redeveloped units). Trinity Financial has filed its Letter Of Intent with the BPDA. Permit applications were filed in September for 30 new low-income units and 90 redeveloped public housing units.
 

Orient Heights image

ORIENT HEIGHTS Permits were filed on Phase I of this redevelopment in East Boston, which will result in 90 redeveloped units, plus an additional 30 new low-income units.

 

Public Housing: BHA Occupancy Rate

pie chart New Market Rate Units, New Affordable Units, Public Housing Preservation

 

GOAL: RETAIN AT LEAST 97% OF PRIVATELY-OWNED AFFORDABLE RENTAL HOUSING
 

This goal requires that no more than 913 units be lost by 2030. By this point the Plan, losses should be kept under 148 units (“loss ceiling”). With only 23 units lost since 2014, the City is running well ahead of target.
Additionally, none of the 1,043 units funded under the State’s 13A program have been lost.

GOAL: PRESERVE HOUSING AFFORDABILITY PAST 2030
 
While the EUR and 13A stock present the greatest risks for losses of affordable housing, there are other types of housing (e.g. cooperatives, homeownership, non Federal/State units) that could be lost due to financial insolvency, foreclosure or physical obsolescence. Although there are no targets for this activity, the City does track and report all units that have executed affordability extensions through the end of the Plan. 
 
Since 2014, 2,498 units have been extended to 2030 or beyond.

Q3 2016 HIGHLIGHTS

Wayne at Bicknell, a 72-unit Expiring Use development in Dorchester began construction. The $27 million project received $750,000 from the Neighborhood Housing Trust, on the condition that affordability was extended to perpetuity.
 
Q3 2016 HOUSING PRESERVATION ACTIONS
ACTION UNITS
PRESERVED
UNITS
LOST
COMPLETED 81 0
PERMITTED 72 0
APPROVED 0 0

Chart: Losses of expiring use units

Chart: units with affordability extensions

Restoration Housing image

RESTORATION HOUSING, an 81-unit Expiring Use development on Mission Hill was completed this quarter. Its affordability has been extended to 2045.

Boston's Middle Class

PROGRESS TO DATE

GOAL: CREATE 20,000 NEW UNITS AFFORDABLE TO THE MIDDLE CLASS INCLUDING 4,000 DEED- RESTRICTED AND 16,000 MARKET RATE UNITS
 

In Q3 2016, the City obtained data on actual rents/prices for more than 8,500 new units that have been completed to date. Previously, middle-income affordability had been estimated. Additionally, middle income affordability is now being tracked in three income tiers to better understand who in the middle class is being served. 

A total of 5,270 new middle-income units have been permitted to date. 34% are deed-restricted affordable; 66% are unrestricted, market-rate middle income. The largest number of these units are available to people earning between 100-120% AMI.

 

GOAL: HELP 5,000 MIDDLE-CLASS HOUSEHOLDS BUY THEIR FIRST HOME
 

With 495 new homebuyers assisted since 2014, homebuyer assistance programs are currently running at 61% of target. There are also 206 new units of affordable homeownership now in construction
in Boston. As these units come on line, homebuyer production rates will rise.

 

 

 

Chart: Cumulative Production

chart: mix of new middle-income units

chart: cumulative middle income homebuyers assisted

Q3 2016 HIGHLIGHTS

Production of Middle Income Units Q3 2016

With a quarterly target of 250 units to achieve the
20,000 unit target by 2030, housing production activity this quarter is substantially exceeding target in all three stages of the development process.

Q3 2016 MIDDLE INCOME PRODUCTION
ACTION TOTAL
COMPLETED 594
PERMITTED 352
APPROVED 852

 

 

hub 25

With 39 deed-restricted Inclusionary units, and 169 middle-income market-rate units, HUB 25 in Dorchester is the largest middle-income affordable development completed in Q3 2016.

Washington Village
With 656 new units, including 110 deed-restricted affordable middle-income units, WASHINGTON VILLAGE in South Boston has the most middle income affordable units of any project approved in Q3 2016.

Housing Boston's Seniors

PROGRESS TO DATE

GOAL: CREATE 1,500 NEW UNITS OF HOUSING FOR LOW-INCOME SENIORS

Low-income senior housing production is currently running at 66% of target. However, the addition of an Elderly Housing line item in the City’s FY16 budget has allowed the City to rebuild its senior housing pipeline and now has four projects with 190 senior units underway.

GOAL: CREATE 3,500 NEW UNITS OF MIDDLE AND MARKET RATE SENIOR HOUSING

92 new units of market-rate senior housing at Waterstone at the Circle went into construction this quarter. This is the first entirely market-rate senior development permitted to date. This brings the total of elderly middle and market-rate production to 101 units – only 10% of target. 

There are currently no mid/market-rate elderly units in the development pipeline. Conversations continue into determining what impediments to development may be occurring, or if the projected demographic need for senior housing at the market-rate level is
being met with other market-rate development.

chart: low-income seniors permitted

Waterstone at the circle

WATERSTONE AT THE CIRCLE in Brighton will bring 92 new units of market-rate assisted-living units as part of a larger complex, including retail.

Q3 2016 HIGHLIGHTS

Affordable Senior Housing Production

Hearth at Four Corners filed for permits this quarter. Now all three elderly development projects with 160 units are in permitting. A new planned elderly development on a City-owned
parcel at 150 River Street in Dorchester was approved by local residents, and the City will proceed with the disposition of the parcel in Q4-2016. This new project increases the affordable elderly development pipeline to four projects and 190 units.

Senior Housing Retention

The plan acknowledges that many seniors will prefer to remain housed in their existing housing, and that housing retention support is a critical part of meeting the housing needs of Boston’s seniors. While no target for retention activities was set, in Q3 2016, 37 senior homeowners and 42 senior renters were helped with housing retention services.

Seniors Save

Joseph Cappuccio is the first Q3 2016 recipient of the now permanent SENIORS SAVE program, which replaces failing or inefficient heating systems for income-eligible senior homeowners.

Hearth at Four Corners

HEARTH AT FOUR CORNERS in Dorchester has entered the permitting process.

RETENTION ACTIONS
PROGRAM OWNER RENTER TOTAL
Seniors Save 7 0 7
Senior Home Rehabilitation 18 0 18
Emergency Repairs 5 0 5
Subsidized Housing Preservation 0 0 0
Home Foreclosure Prevention 7 0 7
Homelessness Prevention 0 42 42
TOTAL 37 42 79

 

Housing Boston's Students

PROGRESS TO DATE

GOAL: CREATE 16,000 NEW UNDERGRAD DORM BEDS BY 2030

No new dorm beds were permitted or completed this quarter. With 3,072 new beds either completed or starting construction since 2014, dorm production is running at 98% of target.

GOAL: CREATE 2,500 NEW GRADUATE STUDENT DORM BEDS BY 2030

With 170 grad beds completed, graduate student housing is running at 42% of target.

GOAL: REDUCE THE NUMBER OF OFF-CAMPUS UNDERGRADS BY 50% BY 2030

The most recent reports from the colleges and universities show a decline of 1,483 undergrads living in off-campus housing in Boston compared to the fall of 2013. This puts the City at 95% of target for the off-campus undergraduate reduction goal.

Q3 2016 HIGHLIGHTS

Dorm Production

The BPDA Board approved Northeastern’s Columbus Avenue dorm with 812 beds.

 

cumulative dormitory bed production

Chart: undergrads in Boston

 

 

 

Strong Neighborhoods

PROGRESS TO DATE

GOAL: REDUCE FORECLOSURES ON HOMEOWNERS TO UNDER 20 PER YEAR

Foreclosures this dropped from 43 in Q2 to 29 this quarter – a 34% decline. This is the second quarter in a row that foreclosures have been down significantly.
This a very encouraging development that suggests a new trend toward reversing the spike in foreclosures that happened in late 2015 and early 2016.

Foreclosures on homeowners dropped from 13 in Q2 to 12 this quarter. That 59% of foreclosures are on investors, not homeowners, is largely attributable to the City’s foreclosure prevention programs that prevented 44 home foreclosures this quarter. 

Of the 29 foreclosures this quarter, 27 (93%) were originated during the subprime boom (2000-2008).
Dorchester had the most foreclosures (7).

GOAL: REDUCE THE NUMBER OF REO PROPERTIES BY 50%

Sales of REO properties this quarter (25) outpaced new foreclosures into REO (20) resulting in a decline in REO properties for the second quarter in a row.
With three foreclosures into REO, Fannie Mae had more REO takings than any other lender this quarter.

Chart Home Foreclosures

Chart: REO inventory

Q3 2016 HIGHLIGHTS

Foreclosure Prevention

The City’s network of non-profit providers were able to successfully prevent 44 foreclosures in Q3-2016. A third of those prevented foreclosures were all the way to the Petition stage, the final step before foreclosure. Had those foreclosures has not been prevented and those homes were taken by the banks, the pace of homeowner foreclosures would be double what it is now.

Addressing the Wealth Gap

The wealth gap between white and non-white households is a significant local and national issue. Homeownership is the primarily way that the middle class accumulates wealth, and a foreclosure can quickly end that wealth accumulation. As shown here, non-white owners represented 73% of the clients that averted foreclosure, and they retained almost $10 million in real estate value that would have otherwise been lost, contributing further to the wealth gap. 

Since 2014, non-white homeowners have been able to retain $52 million in real estate as a result of the City’s foreclosure prevention programs.

 

foreclosure prevented by default level 2030 3Q
Q3 2016 REAL ESTATE VALUE RETAINED BY RACE
CATEGORY HOMES
RETAINED
REAL ESTATE
VALUE
RETAINED
WHITE 11 $3,100,000
NON-WHITE 32 $9,600,000
NOT REPORTED 1 $343,000
ALL 44 $13,000,000

 

 

ANTI-DISPLACEMENT

Q3 2016 HIGHLIGHTS

Office of Housing Stability

In September, the Office of Housing Stability began operations OHS began its operations by reaching out to categories tenants that are in situations that are most likely to result in displacement – 1) buildings that have changed hands recently, and 2) foreclosed buildings. 

This first in the nation Office is exploring ways to expand upon and supplement the already existing array of anti-displacement services that the City offers. The work of the Boston Home Center, the Neighborhood Housing and Supportive Housing Divisions in preventing and averting foreclosures and homelessness is represented below, along with nascent efforts of the Office of Housing Stability.

In Q3 2016, 256 households were able to retain their housing as a result of these services.
Acquisition Opportunity Program 
The Acquisition Opportunity Program (AOP) provides funds to for-profit and non-profit entities to acquire existing housing that is currently providing housing at reasonable rents but is at risk because it is on the market.
By the end of Q3-16, three AOP developers had been approved:
  • Southwest Boston CDC for $800,000 to support the acquisition of an 8-unit building,
  • East Boston CDC for $2.2 million to support the acquisition of 11 buildings/30 units
  • NOAH in East Boston, for $2,025,000
Anti-displacement Action Q3 2016
Homeowners Retained: Foreclosure Prevention 44
Tenancies Retained: Foreclosure Prevention 27
Homelessness Prevention: Seniors 42
Homelessness Prevention: Families 53
Homelessness Prevention: Individuals 18
Subsidized Housing Evictions Prevented 64
Acquisition Program: Tenancies Preserved 8
TOTAL 256