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“We can’t just afford to stall our building of housing in the city of Boston for three or four years because the private equity market is not investing in it,” Boston Councilor Liz Breadon, the chair of the committee on housing and community development shared.
Massachusetts is becoming less and less affordable, in part because of its lack of overall housing. It has the second highest cost of living in the country. The typical rent for a 1-bedroom apartment in Boston recently hit $2,358, according to the latest data from ApartmentList. And interest rates, which only recently lowered, have cooled the once-booming housing market.
Much of the new housing development in the city, Breadon said, have been on the luxury end, and not for low- or middle-income families.
To fund the creation of such a model, city councilors are considering different methods, including leveraging Governor Maura Healey’s so-called Momentum Fund — $50 million dollars earmarked from the Affordable Homes Act she signed earlier this summer. That fund is set aside to accelerate the development of mixed-income multifamily housing through state and private dollars.
“Thousands of units have been approved, and they’re all ready to go, but the developers are not moving forward with them because of the interest rates,” Breadon explained. “This proposal, the social housing model, would use public money to buy some equity in these projects. It would allow the developers to move forward.”
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In Maryland, Montgomery County created its own version of a public housing model: The Laureate, a 268-unit apartment building complete with a courtyard, pool, gym, and pet spa.
To fund it, Montgomery County officials created a revolving fund that they used to offer lower-interest loans to developers to help keep construction costs manageable. The second part of creating stable social housing is the mixed-income part of the equation, in which some renters pay the full market price to help subsidize lower income renters.
Zachary Marks, the senior vice president for real estate at the Housing Opportunities Commission in Montgomery County, said another part of their success was not starting from scratch. Rather than spending years designing a plan, officials worked with a developer that was ready to build but whose financing was lost.
That speeds up the timeline for renters, Marks said. City officials could be “funding projects within 12 months, without a doubt,” Marks said, rather than spending two to three years before construction even starts
There is an urgent need to build. A recent report from the National Low Income Housing Coalition, a nonprofit advocacy organization, said the Greater Boston region is short roughly 147,000 affordable rental units. An affordable unit is defined as being for someone earning 50 percent of the area median income, or about $57,150.
Rent is hard even for those with greater income — with a third of renters saying they’re cost burdened despite earning between $91,440 to $114,300, according to the 2022 report.
“No amount of lawyers are going to change the fact that [people] simply don’t make enough money to afford to live here,” said Mark Martinez, a housing attorney at the Massachusetts Law Reform Institute, a statewide organization that advocates for economic, racial, and social justice for low-income people and communities. Martinez helps tenants who are dealing with problems with their landlord, much of which hinges on affordability.
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Vanessa Calderón-Rosado, the chief executive director at Inquilinos Boricuas en Accion, a nonprofit that created its own community development corporation in the 1960s to build affordable housing in the South End, likewise said renters are feeling the squeeze.
“This is a good opportunity to test something out,” she said, though she’s cautious of the long-term viability.
Challenges, of course, remain.
“Some people want to be more conservative with the city’s finances,” city council president Ruthzee Louijeune said. “But I think it’s absolutely critical that we use our fiscal strengths in this way.”
Louijeune cautions that social housing is very much still in the ideation phase, so the earliest residents would benefit would be in 2027.
While the details are still forthcoming, Breadon and Louijeune are optimistic the city can muster the political will to back this initiative.
Joyce Tavon, the chief executive officer of Massachusetts Housing and Shelter Alliance, an organization focused on ending homelessness, for her part said every idea is welcome.
“We are in such a crisis and such a shortage of housing” she said, “that if this can be another model that will add housing stock, that’s great.”
This story was produced by the Globe’s Money, Power, Inequality team, which covers the racial wealth gap in Greater Boston. You can sign up for the newsletter here.
Esmy Jimenez can be reached at esmy.jimenez@globe.com. Follow her @esmyjimenez.