Buyers of multifamily homes in Boston who promise to keep rents affordable for middle-income households are eligible to receive assistance with down payments and a break on property taxes under two new programs announced last week.
The Boston Redevelopment Authority has invested $5 million in a program known as the Middle Income Housing Fund, which is designed to stabilize rents in the city’s neighborhoods. Buyers of multifamily homes could apply for assistance with down payments and closing costs and in exchange would have to promise to keep unit rents affordable for households earning between 80 percent and 140 percent of the area median income. That translates into between $66,080 to $115,649 for a family of four.
The BRA, which would administer and monitor the program, would establish baseline rents on a per-property basis and restrict annual rent increases by the average of the Consumer Price Index and housing component. Under those guidelines, the index would have set the allowable rent increase in 2004 at about 2.1 percent.
Funding for the program comes from money that developers have contributed for affordable housing in lieu of building low-cost housing at their project sites under the city’s inclusionary development program. BRA Director Mark Maloney said the agency wanted to “use the money as creatively as possible” and wanted to invest it in a program to assist landlords and stabilize rents.
“It’s rent stabilization without regulation,” he said.
The unveiling of the program comes two months after the City Council rejected a proposal by the Boston Tenant Coalition that would have enabled elderly, disabled and low- to moderate-income tenants to challenge rent increases of more than 5 percent, while other tenants would have been able to grieve rent increases of more than 10 percent.
Kathy Brown of the Boston Tenant Coalition said the group is generally supportive of programs that offer down payment assistance and tax relief in exchange for keeping rents affordable. But Brown said the group prefers if resources are targeted to people with low and moderate incomes, and would like to see such programs based on the Boston median income, instead of the area median income which is much higher.
If a homeowner who receives assistance under the new program chooses to sell the property, the BRA would first be given the chance to purchase the property at fair market value. Homebuyers are not subject to income limits and they are not required live in the house that they’re purchasing. They are also not required to own the property for a certain period of time once they purchase it.
The Middle Income Housing Fund is similar to another city mortgage program, Triple Decker Plus, which helps first-time homebuyers purchase three-family homes. As part of that program, homebuyers have to agree to live in one unit and rent out another at below-market rates. In contrast to the Middle Income Housing Fund, homebuyers receiving assistance under Triple Decker Plus must meet certain income guidelines.
The city also announced a tax relief program last week for landlords who participate in a volunteer deed restriction program, meaning they would agree to limit rent increases for a 20-year period.
The programs were billed as the newest components of Mayor Thomas M. Menino’s “Leading the Way” housing initiative, which aims to create 10,000 new housing units in the next four years. The first phase of that campaign resulted in the creation of more than 7,500 housing units in three years.
