Unprecedented investment to be made in affordable housing in Boston
Building on the Walsh Administration’s commitment to create and preserve housing that meets the needs of a growing city, Mayor Martin J. Walsh pledged to dedicate $500 million over the next five years to create thousands of homes across Boston affordable to households with low and middle incomes tonight. These new investments will support the City’s goals of creating rental and homeownership opportunities, preserving public housing units, and establishing the first city-funded voucher program.
“Housing is the biggest economic challenge our residents face,” said Mayor Walsh. “We know we have been making progress, but rents and home prices are still too high for too many people. These investments are transformative and I invite housing advocates and residents to help us bring them to life. At a time when our federal government is stepping away from creating and preserving affordable housing, Boston is continuing to step up and make investments in housing because we believe housing is not a commodity, but our community.”
Through increases in the City’s operating and capital budgets, the investment announced tonight will double the City’s current funding in affordable housing to $100 million. Additional revenue will be generated by selling the Lafayette Garage, as well as working with the Massachusetts Legislature to approve a transfer fee of up to 2 percent on private real estate sales over $2 million in the City of Boston. These combined investments will increase the available funds for affordable housing to five times current funding levels over the next five years.
“We applaud Mayor Walsh for his leadership and commitment to affordable housing,” said Rachel Heller, CEO of Citizens’ Housing and Planning Association (CHAPA). “By setting goals, creating a plan, tracking progress, and committing resources, the City is successfully creating more opportunities for people across incomes to have homes they can afford in the neighborhoods they choose.”
As the City continues to encourage using public transit, biking, and walking as preferred modes of transportation, Mayor Walsh identified the Lafayette Garage located at 1 Avenue de Lafayette in Downtown Boston as a means to generate additional funding for affordable housing. The proposal to sell the garage will be presented to the City Council in the coming months as a unique opportunity to turn a City asset into an immediate and impactful investment through one-time revenue from the sale.
These investments will support the City in achieving its housing goals:
- Create and preserve 1,000 rental units, including senior housing production across all income levels, and expand the Acquisition Opportunity Program by targeting mid-size and large acquisitions and helping development partners compete with speculative buyers to prevent displacement
- Create 500 new homeownership units for low- and middle-income households and support 1,000 new low- and middle-income homebuyers with down payment assistance and low-interest mortgages
- Create and preserve 3,000 units of public housing by providing subsidy funding to help fill the gap in Boston Housing Authority (BHA) pipeline projects, and renovate Boston’s federal elderly/disabled portfolio to preserve this housing resource for future generations
- Establish the first City of Boston voucher program to provide hundreds of city-funded vouchers to those with the most need, including families experiencing homelessness not eligible for the State’s Emergency Assistance, formerly chronically homeless individuals, and extremely low-income elderly and disabled households
- Create or accelerate the creation of 1,500 units by investing in large housing funds and developer capacity building, including:
- Provide critical seed funding to create a revolving, low-cost loan fund to support the acquisition of key vacant or underutilized properties for low- and middle-income housing, while seeking additional resources from businesses and foundations
- Establish an infrastructure fund to subsidize development costs in return for affordable units for low- and middle-income households
- Establish a fund for pre-development activity and support for local Minority- and Women-Owned Business Enterprises
In the coming months, the Walsh Administration will work with the City Council to complete the sale of the Lafayette Garage and to advocate for passage of the Transfer Fee Home Rule Petition signed and submitted to the Massachusetts Legislature last month. In addition, the Administration will be working with the City Council, the Mayor’s Housing Task Force and other housing partners to refine the priorities and programmatic structures of these proposed investments.
"Mayor Walsh's aggressiveness in addressing our housing crisis is very much needed and much appreciated,” said Thomas Callahan, executive director of the Massachusetts Affordable Housing Alliance. “MAHA looks forward to working with the Walsh Administration to put these targeted resources to good use, including closing the racial wealth gap through increased affordable homeownership opportunities for first-time and first-generation homebuyers in Boston."
Since Mayor Walsh took office, the City of Boston has built over 65 percent of the new homes in Greater Boston, with 20 percent of new homes being affordable housing, according to the Metropolitan Area Planning Council. Boston has surpassed 32,000 units permitted under the administration's housing plan, including over 6,200 affordable housing units and over 500 units for senior housing. More than 1,000 BHA units have been renovated and the Department of Neighborhood Development (DND) has assisted over 600 homebuyers in purchasing their homes.
“Bravo to the Mayor for his leadership in closing the huge market gap that prevents older adults from having the opportunity to age in their community, which is the key to healthy aging,” said Amy Schectman, president & CEO of 2Life Communities. “We look forward to working with the City to bring these opportunities to light for all older adults.”
“Far too many older adults struggle to find the housing and services they need to age successfully at a price they can afford,” said Linda Couch, vice president for Housing Policy, LeadingAge. “Our organization which is the nation’s most trusted voice for aging with 6,000 mission-driven member organizations, is thrilled to learn about Mayor Walsh’s proposals which represent a huge leap forward in making housing with services available to all older adults. Kudos to Boston’s mayor for making older adults such a high priority.”
Boston's strategy of increasing overall supply of housing units is beginning to show a stabilizing effect on the housing market. Year over year rental listing data from 2017 and 2018 in Boston shows rents increasing by 2.7 percent in older housing stock, and 3.3 percent in all housing, including newly-built stock.
Boston has been trending away from large year-over-year increases in rent costs for several quarters as development catches up with demand, creating more rental opportunities across the City. This trend continued in 2019: a year-over-year comparison of the first two quarters in 2018 and 2019 show rent prices incrementally increasing by 1.7 percent in older housing stock, with a 1.5 percent increase in all housing stock.
“My wife and I work hard, but we didn’t think we could afford a home to raise our three sons and take care of my in-laws,” said Lamarana Bah, who immigrated 15 years ago from Sierra Leone. “Mayor Walsh’s Neighborhood Homes Initiative helped us with our down payment and mortgage, and now we own our home in Dorchester. I want everyone to know about these opportunities. Our dream came true and that’s why we believe in Boston.