Mayor Walsh commits $7.5 million to create and preserve affordable housing for all Boston residents
May 24, 2016
To help protect tenants and preserve the city's moderately priced housing stock, Mayor Martin J. Walsh today announced the City of Boston has earmarked $7.5 million of Inclusionary Development funds to support the acquisition of occupied rental housing.
Through the new Acquisition Opportunity Program, the Department of Neighborhood Development will provide subordinate loans to help responsible investor-owners acquire occupied, multi-family rental properties. Property owners assisted through the program will be required to maintain the tenancies of residents in good standing and will also be required to maintain affordable rent levels for the units in the property for a minimum of 50 years.
"Boston is committed to making our city a home for everyone, no matter their age, background or financial status. This $7.5 million investment is another leap towards creating affordable housing for all our residents," said Mayor Walsh. "We are committed to growing our affordable housing stock, and programs like the Acquisition Opportunity Program ensures Boston residents will not be priced out of their homes and neighborhoods."
The Acquisition Opportunity Program is designed to increase the share of Boston's rental housing stock that is protected from market forces, creating affordable housing for Boston residents who cannot afford market rate rents. To participate in the program, a developer or owner must agree that a minimum of 40 percent of the units will be restricted for low and moderate-income families. In addition, funding preference will be given to developments that have either a higher number of restricted units or have units restricted to lower incomes.
The program will also prevent displacement of tenants threatened by the forces of gentrification by ensuring that their apartments will not become unaffordable over the long term. To ensure this, the program is only available for investor-owned rental properties that are either fully or partially occupied. To participate, developers are required to agree that no tenant in good standing will be displaced from their unit.
In conversations with the community, affordable housing developers and nonprofits, the City found affordable housing developers can be outpaced in the housing market because private investors often have access to capital and cash that may not be as readily available to affordable housing developers. The Acquisition Opportunity Program offers a solution to this challenge by offering developers the opportunity to pre-qualify for a set amount of funding. This pre-qualification will enable potential buyers to be more nimble and competitive in Boston's fast-moving real estate market.
Development teams will pre-qualify for the program by demonstrating they have the experience and financial capacity to undertake an Acquisition Opportunity project, and have the management experience to successfully operate the properties long-term. Through a competitive RFP process, development teams will be selected and will receive certification from the City for the requested amount of their loan. Once pre-qualified, teams can begin looking for properties. When a property is identified, the prospective buyer can then make an offer, confirm that offer with the City and close on the sale efficiently.