Why the town helped fund a $47 million actual property deal in East Boston

0
425
Why the city helped fund a $47 million real estate deal in East Boston

property

“As Boston continues to grow, we are making urgent relocations to ensure all of our residents and families have access to safe, affordable housing.”

The city skyline is viewed from Piers Park in East Boston. Pat Greenhouse/The Boston Globe

A community development organization, with funds from the City of Boston and local investors, has purchased 36 residential homes in East Boston to ensure they remain affordable over the long term.

The acquisition, announced by Mayor Michelle Wu on Wednesday, was made by a new entity called the East Boston Neighborhood Trust. It will create the state’s first Mixed-Income Neighborhood Trust (MINT), a community development tool launched in 2019 that develops, owns and operates rental housing and retail portfolios to combat gentrification and maintain current rental rates.

STEMs are managed by existing neighborhood organizations and the new one in Boston is managed by the East Boston Community Development Corporation.

A municipal charter restriction ensures units are permanently income-restricted.

According to the city, the purchased buildings comprise 114 units. The deal was completed for $47 million, including a $12 million investment by the city. Boston used $9 million in American Rescue Plan Act funds, $2 million in Cares Act funds, and $1 million in inclusion development funds.

“As Boston continues to grow, we are making urgent moves to ensure all of our residents and families have access to safe, affordable housing,” Wu said in a statement. “This acquisition of over 100 residential units in East Boston is a great example of what is possible when we, as a city and as a cross-industry partner, use all the tools to make Boston a city for all.”

Most units have three bedrooms, an important factor in the housing situation in the neighborhood, which the city says traditionally has the largest average household size in Boston.

The 114 units are restricted as low-income units to households with various percentages of the area’s median income (AMI). A total of 28 units are restricted to households with 50% AMI, 40 units with 60% AMI, 26 units with 80% AMI, and 20 units with 100% AMI, the city said.

In addition to city funds, funds for this deal also came from the Boston Impact Initiative, the Hyams Foundation, the Boston Foundation, the Eastern Bank Foundation, City Life/Vida Urbana and other private individuals. In addition, East Boston CDC received a grant from the Barr Foundation to support the acquisition.

“East Boston CDC has focused on acquiring multi-family homes because these homes are the source of affordable family housing and the backbone of our neighborhood,” East Boston CDC executive director Al Caldarelli said in a statement. “But a new model was needed to combat crowding out in a fast-moving market filled with speculative investors. This new model is attracting socially committed investors and philanthropic institutions and would not have been possible without the unwavering support of the Mayor’s Office of Housing.”

The seller of this transaction was a joint venture between The Grossman Companies and Hodara Real Estate Group. That company bought the properties in 2014 and 2015 to renovate them and then find a single buyer, according to the Boston Business Journal.

“For many years, East Boston families have struggled to remain in their homes and live their lives in peace without constant fear of eviction or deportation,” said Mike Leyba, co-executive director of City Life/Vida Urbana, in a Explanation. “All families deserve housing that is affordable, safe and accessible. This major acquisition and preservation of affordable housing for the neighborhood is only possible because of the power and tenacity of local residents who continually fight for community-wide stabilization, and the new East Boston Neighborhood Trust will be a centerpiece of this stabilization effort in East Boston for years to come .”

Subscribe to Newsletter

Stay up to date with all the latest news from Boston.com