Dive Brief:
- Boston launched last week another program to preserve affordable housing and keep residents in their homes amid rising rents and pressure from outside investors.
- The Boston Acquisition Fund is a revolving loan fund that will help “mission-driven” developers purchase occupied multifamily housing, stipulating that the housing remains permanently affordable.
- The public-private partnership aims to raise $25 million. The city already has about $13 million from city grant funding and 10 local organizations, including medical centers and philanthropic groups.
Dive Insight:
This isn’t the first time Boston has invested in a program to get housing into the hands of developers committed to affordability.
In 2016, the city launched its Acquisition Opportunity Program. Similarly to the BAF, the AOP helps nonprofit and mission-driven organizations purchase affordable, occupied rental properties that are at risk of being sold and renovated or converted, resulting in jacked-up rents. In October, the city celebrated the AOP’s accomplishment of its 2030 goal of helping developers acquire 1,000 rental homes. Boston has invested more than $90 million into the AOP since its launch.
As a revolving fund, the BAF will provide low-interest loans to developers, and the repaid funds will be reinvested into future projects. This model creates “a sustainable model for preserving affordability,” according to the city of Boston. Beyond offering low interest rates, the BAF will feature “fast and streamlined underwriting for quicker closings” and “flexible terms to aid affordability planning,” according to the nonprofit Massachusetts Housing Investment Corp., which is administering the BAF.
“As Boston faces unprecedented housing challenges, the Boston Acquisition Fund will help us safeguard affordable homes and keep residents rooted in their communities,” Boston Mayor Michelle Wu said in a statement.
The city says the new fund will help developers acquire 500 homes by 2030. MHIC President and CEO Moddie Turay said in a statement that the organization looks forward to “growing this program to serve as a model for affordable housing preservation.”
