Boston 2030 3rd Quarter Report 2016

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.

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.

PROGRESS TO DATE

GOAL: CREATE 6,500 NEW LOW-INCOME, NON-ELDERLY UNITS BY 2030

GOAL: TARGET AT LEAST 1,500 AFFORDABLE UNITS TO EXTREMELY LOW INCOME HOUSEHOLDS

Q3 2016 HIGHLIGHTS

• Parcel 25 Phase 1A on Mission Hill
• 52 Montebello Road in Jamaica Plain
• and Safe Haven

PROGRESS TO DATE: PUBLIC HOUSING

GOAL: MAINTAIN AN OCCUPANCY RATE IN BHA HOUSING OF 97% OR MORE

GOAL: USE INNOVATIVE FINANCING STRATEGIES TO RENOVATE AND REDEVELOP BOSTON’S PUBLIC HOUSING

 

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 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.

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
 

Q3 2016 HIGHLIGHTS

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.

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

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.

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.

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.

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.

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.

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.

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.

Acquisition Opportunity Program 

• 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