Deal will create state’s first Mixed Income Neighborhood Trust, establishing affordability of 114 units in perpetuity
BOSTON – Tuesday, October 11, 2022 – Building on the City of Boston’s commitment to expanding affordable housing in Boston, Mayor Michelle Wu today announced the acquisition of 36 multi-family buildings comprising a 114-unit housing portfolio by the newly created East Boston Neighborhood Trust. The deal will establish the state’s first Mixed Income Neighborhood Trust (MINT) and ensure the affordability of these family-sized units in perpetuity. The $47 million acquisition was made possible by a $12 million investment by the City, including $9 million from the American Rescue Plan Act (ARPA), $2 million from the Cares Act, and $1M in Inclusionary Development funds.
“As Boston continues to grow, we are moving urgently to ensure that all of our residents and families have access to safe, affordable housing,” said Mayor Michelle Wu. “This acquisition of over 100 units in East Boston is a great example of what is possible when we use every tool as a City and partner across sectors to make Boston a city for everyone. I’m grateful to the Mayor’s Office of Housing for their leadership and look forward to accelerating our efforts for affordability across our neighborhoods.”
The East Boston Community Development Corporation (East Boston CDC) worked in partnership with local investors to convert the portfolio to the state’s first ever Mixed Income Neighborhood Trust (MINT). The MINT model places governance and control of the portfolio in the hands of a local purpose trust, while financial investors hold the economic interest in the portfolio. In addition to a City deed restriction which will ensure that the units are income restricted in perpetuity, this new model empowers the local community to address displacement by placing governance, ownership, and management in the hands of a community trust. The newly created trust was supported by the Boston Impact Initiative, the Hyams Foundation, the Boston Foundation, the Eastern Bank Foundation, City Life/Vida Urbana, and private individuals who combined to provide over $8 million of financial support.
Additionally, the Barr Foundation provided the East Boston CDC with a grant to support the acquisition. The units are spread throughout East Boston, a neighborhood that has historically been an affordable place for immigrants and families to call home, but which has seen some of the highest percentage rent increases in the City over the last decade.
“East Boston CDC has been focused on acquiring multi-families because these houses are the source of affordable family housing and the backbone of our neighborhood,” said Al Caldarelli, Executive Director of the East Boston CDC. “But a new model was needed in order to combat displacement in a fast paced market with speculative investors. This new model brings in socially minded investors and philanthropic institutions, and wouldn’t have been possible without the Mayor’s Office of Housing’s unwavering support.”
“For many years, families in East Boston have been fighting to stay in their homes and live their lives in peace, without constant fear of displacement or deportation,” said Mike Leyba, Co-Executive Director of City Life / Vida Urbana. “All families deserve housing that is affordable, safe, and transit-accessible. This major acquisition and preservation of affordable housing to the neighborhood is only possible because of the power and tenacity of local residents who continuously fight for community-wide stabilization, and the new East Boston Neighborhood Trust will be a core piece of that stabilization effort in East Boston for years to come.”
Nearly three quarters of the 114 units of housing have at least three bedrooms, addressing the need for family housing in a neighborhood that has traditionally boasted the City’s largest average household size. This affordable family housing will help ebb the displacement of families from this rapidly developing neighborhood. Of the 114 units, 28 units are restricted as low income units for households at 50% Area Median Income (AMI), 40 units will be restricted at 60% AMI, 26 units restricted at 80% AMI, and 20 units will be restricted at 100% AMI.
“This large-scale acquisition of 114 privately-owned units in East Boston is necessary to preserve naturally-occurring affordable housing and ultimately fight back against displacement,” said Councilor Gabriela Coletta. “I am grateful to Mayor Wu for helping to close the financing gap, the East Boston Community Development Corporation, City Life / Vida Urbana, and all those who worked hard to get this deal done. The trust will serve as a model for incorporating community ownership and governance into housing in gentrifying neighborhoods.”
The seller, a joint venture between The Grossman Companies and Hodara Real Estate Group, was represented in the sale by JLL Capital Markets.
“We are excited to have sold this portfolio to the East Boston CDC and the other members of the East Boston Neighborhood Trust and are ecstatic that they will preserve affordable family-sized housing in the East Boston community for the long term,” said David Grossman, principal at The Grossman Companies.
The announcement builds on Mayor Wu’s initiatives to address Boston’s housing affordability, including investing $380 million in housing affordability through the City’s Operating budget, the Capital budget, and federal recovery funds, filing a Home Rule Petition relative to real estate transfer fees and senior property tax relief, signing an Executive Order relative to affirmatively furthering fair housing, convening a Rent Stabilization Advisory Committee to inform future legislative proposals, hiring the City’s first Chief of Planning, announcing the results of the Citywide land audit, and signing an Executive Order to streamline the approval process for affordable housing.
Source: Mayor’s Press Office, October 11, 2022
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