Photo by James Sanna | Banker & Tradesman Staff
Institutions are partnering with the city of Boston on a new low-interest loan fund expected to pay for acquisition of 500 apartments over the next five years.
Designed to prevent displacement due to rent hikes and condominium conversions, the Boston Acquisition Fund has raised $8 million from local institutions including The Boston Foundation, Mass General Brigham and the Barr Foundation. The city has chipped in $5 million in grant funding, but the fund’s financial goal is to raise another $12 million, the mayor’s office announced Thursday morning.
“The 7 [percent] or 8 percent interest rates are making it hard for traditional acquisitions to pencil out. We knew we needed a new approach,” said Daniel Lesser, chief of staff for the Mayor’s Office of Housing.
Since 2016, the Mayor’s Office of Housing has provided loans for acquisitions to developers that agree to long-term affordability and retain existing tenants, preventing rent hikes. Developers have acquired more than 1,000 housing units under the program.
The existing program has offered more than $90 million, and was able to expand in recent years after adding another $56 million in federal funding.
As pandemic-era funding evaporates and interest rates remain elevated, the city is turning to local institutions to fill the gap.
“To all the employers and anchor institutions who are hearing about this and raising an eyebrow: please, this is your open invitation to get involved,” Mayor Michelle Wu said at a press conference today.
Other sources that have committed to the fund include Boston Children’s Hospital, Dana-Farber Cancer Institute, Boston Medical Center, Beth Israel Deaconess Medical Center, Eastern Bank Foundation and Tufts Medical Center. Housing insecurity is linked to multiple health problems including depression, hypertension and substance abuse, representatives of health care institutions noted.
“Having access to affordable housing is a critical element in determining the overall health of our patients and ensuring we have a thriving workforce,” Juan Fernando Lopera, chief diversity, equity and inclusion officer at Beth Israel Lahey Health, said in a statement.
The fund will be administered by the Massachusetts Housing Investment Corp.
