BRIAN H. KAVOOGIAN
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A housing plan to produce 10,000 new homes and preserve 3,000 affordable units in Boston unveiled by the Menino administration earlier this month is already drawing the praise and support of local advocates and real estate developers.

The $375 million plan, called “Leading the Way II,” follows a similar effort introduced in late 2000 to create 7,500 new housing units and restore 1,100 vacant public housing units over a three-year period. That effort was deemed a success by city officials who assert that more than 7,900 new housing units, including 2,200 affordable homes, have been created, and over 5,500 rental units preserved in the last three years.

Now, the administration is embarking on a three-year plan to not only develop new units but to renovate up to 2,000 homes and target $10 million to fight homelessness. The plan relies on some federal resources, but the city is also setting aside $25 million in new resources from the sale of property and developer fees.

“Clearly, Mayor [Thomas] Menino, more than any other municipal leader, is leading the way in creating more housing,” said Brian H. Kavoogian, president of the Greater Boston Real Estate Board. “There are many cities and towns surrounding Boston that would do well to take some lessons from Mayor Menino on the subject of creating affordable housing.”

Kavoogian, a principal of The Davis Cos. in Boston, said he was pleased to see that the plan is supported by corporate leaders like Bank of America, Citizens Bank and KeySpan Energy. Bank of America has pledged $200 million in loan financing and $3 million in grants over four years for community development projects, including affordable housing development. Citizens has agreed to provide $84 million in housing financing, including $50 million that will come from its recently created Housing Bank Loan Fund.

And Keyspan, which is the newest partner in the city’s housing efforts, will work with the Boston Housing Authority and provide $1.2 million to assist low-income and elderly homeowners to replace outdated or inefficient heating systems.

That type of investment from corporate partners is a clear indication of the importance of housing to businesses and the local economy, noted Kavoogian. “Frankly, I think more businesses that depend on this area for employees should be stepping up on this issue,” he said.

The “Leading the Way II” plan calls for the production of 10,000 new housing units, 2,100 of which will be affordable. To reach the affordable housing goals, the plan proposes to increase the percentage of units that must be “affordable” within a housing development from 10 percent to 15 percent. Under the city’s current inclusionary development requirement, which was established in 2000, developers must set aside 10 percent of the units within a new project for low- and moderate-income households.

But, in addition to increasing the inclusionary development requirement, the city wants to enable developers to make a cash contribution instead of building the affordable units onsite – a proposal that makes the bigger requirement more palatable to developers.

“We’re not thrilled with the increase in inclusionary zoning of 15 percent affordable units,” acknowledged Kavoogian. “But to the extent that … the developer has the option of producing those affordable units offsite that might moderate the impact.”

Putting affordable housing units on the same site diminishes “both the underlying land value and the project’s ultimate value,” explained Kavoogian. So allowing developers to contribute money for those units to be built elsewhere, while also increasing the inclusionary requirement, helps.

Besides building new homes, the plan calls for the renovation of 2,000 properties, and the reclamation of 130 vacant houses and distressed residences. The city wants to offer a rebate to encourage homeowners to do painting, landscaping and other exterior improvements. In addition, the city plans to implement a “House of Shame” campaign to identify eyesore and abandoned properties, as well as a new program operated by inspectional services to condemn, assist and take possession of distressed properties.

The city is also launching a $10 million campaign to prevent homelessness and expand housing opportunities for homeless people. Part of that goal involves offering financial incentives to developers to provide more units for homeless people. The city currently has a 10 percent homeless set-aside policy.

‘Good Focus’

While the city is putting up $5 million for that effort, it plans to pursue private and public resources as well.

“Obviously that’s [$10 million campaign] welcome news to us,” said Joe Finn, executive director of the Massachusetts Housing and Shelter Alliance. Finn said he hopes a good segment of the money is spent on chronically homeless people who use the most emergency shelter resources.

In recent months, Finn other housing advocates have been protesting cuts to the federal Section 8 voucher program, which provides rental assistance to some of the lowest-income households in the state, many of whom would be homeless.

With drastic changes and cuts to the program like Section 8, Menino’s plan couldn’t come at a better time, according to Julia Kehoe, executive director of the Metropolitan Boston Housing Partnership.

“The Menino administration has really gone out on a limb to target resources for the poorest of the poor,” said Kehoe.

The city’s homeless population rose 7 percent from 2001 to 2003, about half the rate that it grew in the previous three years. The city credits the efforts of the Boston Housing Authority – which, according to the city’s estimates, reclaimed almost 1,000 vacant units and placed many homeless people in them – for keeping the homeless rate from growing at a faster pace.

But Kehoe believes that the homeless population didn’t increase as rapidly over the last three years because both the BHA and the MBHP issued thousands of Section 8 vouchers to Boston tenants, particularly people who were either homeless or at risk of becoming homeless.

With the proposed Section 8 cutbacks, Kehoe fears many low-income families will be forced into homelessness.

“With Section 8 already helping so many people, this Leading the Way plan will help but we don’t know … [with] the federal government getting out of the business of helping the poor, how much of an impact that will have,” she said.

Aaron Gornstein, executive director of the Citizens’ Housing and Planning Association, said the plan features a comprehensive strategy for both housing production and preservation, and has a “good focus” on homelessness prevention.

Plans like the one proposed in Boston can make a difference if they include clear goals and are backed by resources and political will, he said.

“I think all those factors are present with the mayor and the city agencies in terms of this plan,” said Gornstein, who served on the 15-member advisory panel that made recommendations for Leading the Way II.

He added, “I think there’s a real commitment there to accomplish the ambitious goals that were laid out in the plan.”