There are few thoughts more comforting than knowing you can count on paying a reduced, affordable rental rate for your home rather than fork over market-rate payments – unless, perhaps, the site where you sleep was home to a former hospital for the mentally ill.

A real estate developer recently secured financing for the third round of affordable apartment construction on the grounds of the old Boston Lunatic Hospital, later renamed the Boston State Hospital, in the city’s Dorchester and Mattapan neighborhoods.

Since the state hospital complex closed in 1979, more than 150 rentals have already been built at Olmsted Green, along with elderly housing, townhouses and a charter school that is under construction.     

The 42-acre Olmsted Green project sits near the geographic center of Boston at the edge of the Boston Nature Center and Wildlife Sanctuary, operated by Mass Audubon at the southern end of the Emerald Necklace parkway. Just to the north sits Franklin Park and the Forest Hills Cemetery, and to the west is the Arnold Arboretum.  The site is essentially surrounded by urban wilds.

Olmsted Green is broken into two campuses separated by Morton Street. The west campus consists of 51 affordable apartments, but is also permitted for up to 287 townhomes. To date just 19 have been built.

Even so, developer New Boston Fund has sold all 19 for between $250,000 and $425,000. Most of those were sold at the lower end of the spectrum because “that was the demand,” according to Kirk Sykes, senior vice president with New Boston. That demand is coming primarily from young couples buying their first home, as well as older people downsizing from larger homes, he said.

“The smaller starter home is right for this area,” Sykes opined. “A two-bed home for under $300,000 is the hardest sector of the market and it’s not being met, and that’s probably what needs to be addressed … because that’s who you want to move here to support the local industries.”

The firm had just gotten started with the townhouse portion of the project when the Great Recession hit, and made it clear homeownership was being put on the backburner, at least for the time.

“The recession clearly hit [Mattapan, Roxbury and Dorchester] harder,” Sykes offered. “The unemployment rate is much higher [in Roxbury, Dorchester and Mattapan] than in downtown Boston.”

Now, the developer is starting to move forward, adjusting its homeownership supply to be more in-line “with what the community can afford,” according to Sykes. Over the next six months, he hopes to have the first units of a slightly smaller townhome built, with the goal of pricing the approximately 1,000-square-foot townhomes at under $300,000. The firm will build a few units, hopefully pre-sell them, and build as they sell.

“Housing is a cornerstone of our economy and of our local communities,” Aaron Gornstein, undersecretary for the Department of Housing and Community Development, said in a prepared statement about the project. “With these new units we have created not only jobs here in Dorchester and Mattapan but also quality apartments for our neighbors.”

More To Come

Housing is a major part of the Olmsted Green project, but not the sole use. Abutting the east campus, the Lena Park Community Development Corp. (CDC) sold a property it owns to the Brooke Charter Schools network, where construction is underway for a nee educational facility. The community resource center the organization operates will reopen in an 8,500-square-foot space the development corporation owns in the new school.

Plus, New Boston is currently studying uses for the site of a planned nursing home on the east campus, but now that “the financials have changed for those,” Sykes said he is looking at alternative uses. The planned nursing home site is being marketed broadly by Colliers International, but there have been talks of expanding the charter school to that site instead. It could also be used by a different school, or market-rate apartments. Whatever the use, new permits would be required since it is currently permitted for a skilled nursing facility. However, an additional school could be preferable by the surrounding community “because it’s youth-focused,” Sykes said.

Whatever use eventually at the site, Lena Park CDC representatives would prefer one that somehow interacts with the community living in the new homes built at Olmsted Green and the nearby neighborhoods, said David Wright, chairman of the board for Lena Park CDC.

“It really is a community they’ve built there,” said Wright, who also serves as a reverend at People’s Baptist Church in Boston’s South End. “It’s a real neighborhood. There are kids out in the play spaces. Whatever we bring in, we want as much as possible to see if they will be part of the community and engage with the youth and families.”

Email: jcronin@thewarrengroup.com