The Massachusetts Housing Investment Corp. (MHIC) and the Conservation Law Foundation (CLF), co-founders of the Healthy Neighborhoods Equity Fund (HNEF), last week announced the closing of its first fund, HNEF I, at $22.35 million.
HNEF is a private equity fund created to finance transformative, transit-oriented development projects in Boston and Gateway Cities in Massachusetts. Transit-oriented development (TOD) includes a mixture of housing, office, retail and other amenities integrated into a walkable neighborhood and located within a quarter to a half-mile of public transportation.
Launched in 2015, HNEF invests in mixed-use, mixed-income real estate projects in neighborhoods that are in the early stages of transformational change. Projects must have strong potential to strengthen community and environmental health and promote regional equity while providing a reasonable rate of return for investors.
Funding for HNEF has come from a unique blend of public, major foundation and private sector funds. Among its institutional investors are: the Boston Foundation, the Northern Trust Co., the Robert Wood Johnson Foundation, The Kresge Foundation and Boston Medical Center. Significant funding was raised from Santander Bank, Citizens Bank, U.S. Bancorp Community Development Corp., TD Bank, Brookline Bank, Cambridge Savings Bank, Eastern Bank, People’s United Bank and Boston Private Bank. Individual impact investors have also participated in the Fund.
Santander Bank’s $5 million investment in HNEF I will assist in providing approximately 528 housing units, of which 140 are affordable, and 106,635 square feet of commercial space.
“By developing more affordable housing units with easy access to retail stores and public transportation, HNEF is creating innovative solutions and improving the quality of life for residents in cities throughout Massachusetts,” Gwen Robinson, director of corporate social responsibility at Santander Bank, said in a statement. “HNEF shares our values of supporting the communities where we live and work and we are proud to play a role in contributing to the positive transformation of neighborhoods across the commonwealth.”
Since its inception, HNEF has closed five investments to finance projects, two in Boston and one each in Chelsea, Braintree and Beverly, for a total investment of $14.2 million. HNEF will soon close on another Boston project, bringing total investments to $17.7 million.
“As the nation’s largest health foundation, we are excited to be working alongside finance and community development partners on health-promoting real estate investments,” Donald Schwarz, vice president, program, at Robert Wood Johnson Foundation, said in a statement. “By including a consideration of health impacts – such as walkability, safety and access to healthy food and economic opportunity – in investment decisions, we hope to see meaningful health improvements in these communities over time.”
