Boston Earmarks Cash to Keep Rents Affordable

Boston, MA - The mayor's office is setting aside a cool $7.5 million in loans to help developers acquire apartments and other multi-family properties, with a few caveats.

Per a press release Tuesday, developers buying rental properties with help from those funds can't kick out current residents who are in good standing and will be required to maintain affordable rents for at least 50 years.

In short, the program shields those housing units from market prices, protecting neighborhood residents from being forced out by gentrification and keeping rents manageable even as they rocket up elsewhere in the city.

It's part of Boston's new Acquisition Opportunity Program, through which the Department of Neighborhood Development will provide subordinate loans "to help responsible investor-owners acquire occupied, multi-family rental properties," the mayor's office press release said.

"Programs like the Acquisition Opportunity Program ensures Boston residents will not be priced out of their homes and neighborhoods," Walsh said.

Here are the details from the city:

"To participate in the program, a developer or owner must agree that a minimum of 40 percent of the units will be restricted for low and moderate-income families. In addition, funding preference will be given to developments that have either a higher number of restricted units or have units restricted to lower incomes.

The program will also prevent displacement of tenants threatened by the forces of gentrification by ensuring that their apartments will not become unaffordable over the long term. To ensure this, the program is only available for investor-owned rental properties that are either fully or partially occupied. To participate, developers are required to agree that no tenant in good standing will be displaced from their unit.

In conversations with the community, affordable housing developers and nonprofits, the City found affordable housing developers can be outpaced in the housing market because private investors often have access to capital and cash that may not be as readily available to affordable housing developers. The Acquisition Opportunity Program offers a solution to this challenge by offering developers the opportunity to pre-qualify for a set amount of funding. This pre-qualification will enable potential buyers to be more nimble and competitive in Boston's fast-moving real estate market.

Development teams will pre-qualify for the program by demonstrating they have the experience and financial capacity to undertake an Acquisition Opportunity project, and have the management experience to successfully operate the properties long-term. Through a competitive RFP process, development teams will be selected and will receive certification from the City for the requested amount of their loan. Once pre-qualified, teams can begin looking for properties. When a property is identified, the prospective buyer can then make an offer, confirm that offer with the City and close on the sale efficiently."