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Gentrification and displacement pressures have hit hard in East Boston amid a wave of condominium conversions and apartment rent hikes in recent years.
A newly formed neighborhood trust will preserve the affordability of 114 apartments in 36 buildings after paying $47 million to buy the portfolio from Grossman Cos. of Quincy and Allston-based Hodara Real Estate Group. The city of Boston contributed $12 million toward the acquisition, enabling a group led by East Boston Community Development Corp. to win the bidding war.
East Boston CDC expressed interest in buying the portfolio early in the process, but faced competition from for-profit developers, Grossman Cos. President David Grossman said.
“It was a longer-than-normal process, but we were really willing to stick around and see it through given we felt so strongly about what they were doing,” Grossman said. “I think it’s very compelling and progressive, and feels like a true public-private partnership between the city and private investors.”
The acquisition price equates to $412,000 per unit.
Grossman Cos. and Hodara Real Estate Trust acquired the 36 small apartment buildings individually in 2014 and 2015, and placed the portfolio on the market in 2021 through brokerage JLL, Grossman said.
A newly-created Mixed Income Neighborhood Trust will manage the portfolio, and the city will hold a deed restriction ensuring that the units remain permanently affordable, Mayor Michelle Wu’s office announced. Income restrictions will range from 50 to 100 percent of area median income.
Development of luxury apartment and condo buildings along the East Boston waterfront in the last decade drew attention to the neighborhood from real estate investors, and protests about dwindling stock of affordable family housing.
Gentrification and displacement became flashpoints during the city’s review of the Suffolk Downs racetrack property redevelopment in 2019, as then-City Councilor Lydia Edwards successfully pressed developers for concessions including increases in the number of family-sized units and contributions for rental assistance, off-site affordable housing production and a $5-million housing stability fund to acquire and maintain affordable rental housing.
For the Grossman/Hodara portfolio transaction, the new owners received more than $8 million from individual donors and institutions including the Boston Impact Initiative, the Barr Foundation, the Hyams Foundation, the Boston Foundation, the Eastern Bank Foundation and housing activists City Life/Vida Urbana. The city contributed $12 million including federal ARPA funds and the city’s Acquisition Opportunity Program, which subsidizes nonprofits’ and affordable housing developers’ acquisitions of privately-owned housing.
