Boston: Mayor Wu Announces Housing Accelerator Fund

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Mayor Michelle Wu today announced she will be filing a $110 million appropriation to create the City's Housing Accelerator Fund at the next City Council meeting on December 4, 2024. The new fund is intended to kickstart the production of housing by closing financing gaps for projects that have already been approved but have been unable to start construction. The Housing Accelerator Fund is supported by unrestricted prior-year budgetary fund balance, and the City's investment will be matched by the Commonwealth's Housing Momentum Fund. Mayor Wu made the announcement at the Bunker Hill Redevelopment in Charlestown. The mixed-income units already permitted through the Boston Housing Authority's public-private partnership with Leggat McCall Properties at Bunker Hill will be the first project to benefit from the fund.

"Boston's housing crisis is the biggest stress on families across our neighborhoods, so we need to do everything possible for more housing and more affordability," said Mayor Michelle Wu. "Our Housing Accelerator Fund will wisely use City dollars to jumpstart new projects and then return those funds back to the City once the projects are financed, supporting public-private partnerships for housing, private development, and home ownership. Thank you to City Councilors, colleagues at the state level, and housing partners for collaborating to innovate and find new approaches to meet the needs of our community."

The Bunker Hill redevelopment project, which broke ground on its first building in June 2023, is a multi-phase public-private partnership among the Joseph J. Corcoran Company, Leggat McCall, the Boston Housing Authority and the Charlestown Resident Alliance (CRA), which will replace 1,100 public housing units with 2,699 units with a mix of public, income-restricted, and market rate rental units. This model of mixed-income housing is ideal for supporting healthy, diverse communities. The project also includes 73,000 square feet of retail and civic uses, off-street parking, and new public open space to support residents and the Charlestown community.

The next phase of Bunker Hill's Redevelopment, which will be funded through the Housing Accelerator Fund, will be a nine-story, 265-unit mixed-income building, including 58 new affordable units. These affordable units will be a mix of one, two, and three-bedroom apartments throughout the building. Like the first building now nearing completion, it will be built to passive house standards, the highest standard for energy efficiency in new construction. The next phase of Bunker Hill's redevelopment is expected to begin construction in mid to late 2025.

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"We are eager to turn our attention to the second building of the project and are grateful for the collaborative effort of Mayor Wu, the City Council, and the BHA to make this appropriation a reality," said Adelaide Grady, Bunker Hill Housing Redevelopment Executive Director and Senior Vice President/Partner at Leggat McCall Properties. "The timing of this enables us keep up the momentum following the first building as we work closely with the BHA and CRA to quickly start construction on the next new homes for Bunker Hill families."

In the coming months, the City will partner with the Commonwealth to identify additional projects that meet City and State priorities of affordability, climate resilience, and equity to participate in the Housing Accelerator Fund and the state's Momentum Fund, which was created in the housing bond bill that became law earlier this year. The Commonwealth will provide both underwriting support and matching funds through MassHousing. Developers with projects that have already been approved by the Planning Department and meet MassHousing's statutory requirement of 20 percent affordability can apply for equity investments from the Commonwealth and City through MassHousing application process. Qualified applicants will be identified by the City in partnership with MassHousing.

"NAIOP is grateful to the Wu Administration for recognizing the challenges facing housing production in Boston," said Tamara Small, CEO of NAIOP Massachusetts, The Commercial Real Estate Development Association. "Supporting market rate housing development is critical to addressing the housing crisis, and today I am pleased to stand with Secretary Augustus, Mayor Wu, and the entire City of Boston as this new tool is implemented."

In addition to partnering with the State to move much needed rental housing into construction quickly, the City will also work with small and large scale developers in Boston to identify potential opportunities to use this fund or similar models to accelerate the creation of approved, new middle income homeownership housing opportunities. Through the work of the Boston Home Center and related programs, the City is committed to advancing pathways to stable homeownership for Bostonians. The Wu administration has invested more in creating and expanding homeownership opportunities than any previous administration.

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"The Housing Accelerator Fund is an innovative tool in our toolbox that will add to our options and strategies, like the state's Momentum Fund and incentives for office-to-housing conversion programs," said City Council President Ruthzee Louijeune. "Creative initiatives like these send a strong message that Boston is working with our development partners to find shared solutions to our affordability, housing, and sustainability goals."

"We have an opportunity with this development fund to invest in home ownership in a way that has never been done before. This will create stability in our neighborhoods, and the byproduct of that stability is going to be wealth for our residents," Councilor Brian Worrell (District 4) said. "I'm proud to stand alongside the mayor on this commitment to get shovels in the ground and cranes in the sky. This is a clear signal that Boston is serious about housing production."

Today's announcement is a major step in making Boston a home for everyone. Under Mayor Wu's leadership, the City has permitted 8,679 new housing units—nearly a third of which are income-restricted—and approved an additional 16,185 units. Her commitment to streamlining processes led to significant improvements, including reducing approval times for affordable housing by 68% and modernizing development reviews for greater transparency and equity. Mayor Wu has championed innovative zoning initiatives to create mixed-use and diverse housing options across neighborhoods and led efforts to convert underutilized City-owned land into nearly 1,400 new income-restricted units. Additionally, she has expanded financial assistance for homebuyers and created more opportunities for first-time and BIPOC homeowners. Through comprehensive anti-displacement measures, strategic public investments, and a focus on affordable homeownership, Mayor Wu is building a more inclusive, stable, and sustainable housing future for Boston.

The source for the $110 million appropriation is unrestricted, prior-year budgetary fund balance, known as free cash. As a non-recurring revenue source, free cash should be restricted to support one-time, non-recurring expenditures, such as this one-time investment in housing creation. As of June 30, 2023, the City of Boston has a free cash balance of approximately $515 million, as certified by the state Department of Revenue. The City will have its free cash certified again in spring 2025, based on the fiscal year end June 30, 2024.

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