Does Boston have a winning formula for addressing displacement? It might just be the case.
As Steve Adams details in this week’s issue, the city was a key player in a $47 million deal this month that saw a nonprofit trust take control of 36 buildings representing 114 apartments in the gentrification front line of East Boston.
The East Boston Community Development Corp. and City Life/Vida Urbana are the motive forces behind the nonprofit, called East Boston Mixed-Income Neighborhood Trust, or “East Boston MINT” for short. The idea is to keep control of the now-deed-restricted portfolio in the hands of neighborhood groups while still giving investors the ability to achieve a return on the equity they put in.
The model’s flexibility also gives community groups the ability to harness market trends by including market-rate units in the portfolio, letting them cross-subsidize more affordable rentals.
Perhaps most importantly of all, a MINT can short-circuit the usual cycle where a new building owner either has to significantly raise rents to meet debt obligations, or buys a building with that express purpose to take advantage of movements in the property market.
An affordable housing development’s capital stack is always tricky to assemble, but the lower-risk nature of a MINT appears to dodge this while adding to a city’s stock of permanently affordable housing much faster than traditional development. Supporters say the model gives neighborhood groups access to more financing sources than they might be able to when developing affordable housing, too. East Boston MINT’s organizers say their attempt to raise equity was quickly oversubscribed, giving hope that the idea can be replicated elsewhere.
But it’s also clear that MINTs can’t succeed on their own. Some Greater Boston housing authorities and CDCs have tried to compete against investors for small multifamily properties for years without much success, often finding that they lack financial firepower during a bidding war.
As Mayor Michelle Wu’s administration demonstrated in the East Boston deal, that’s where nimble municipal money can be vital. The city’s $13 million contribution helped the MINT out-bid all comers. Other towns and cities should take note, and set aside a pot of money that can be deployed in deals like this without too much red tape.
With millions in linkage fees at cities’ disposal and federal COVID aid that must be spent soon, this approach certainly seems to represent a fairer way to tackle the displacement and affordability problems than rent control.
Letters to the editor of 350 words or less may be submitted via email at firstname.lastname@example.org with the subject line “Letter to the Editor,” or mailed to the offices of The Warren Group. Submission is not a guarantee of publication.