Boston purchases buildings at market rates for affordable housing

Most people agree that Boston needs more affordable housing. Much more. But building affordable housing is prohibitively expensive and complicated. It can take years to finance and build a single unit.

So as city officials grapple with how to build their way out of the housing crisis, they are also testing programs that could quickly and more cheaply create new income-restricted units. One strategy, they say, could be scaled up quickly: buying buildings as they come up for sale and converting them into affordable housing.

That’s the idea behind the city’s Acquisition Opportunity Program, an initiative that started in 2016 and as of this week has created 1,000 new affordable units in the city, officials said Thursday. It is not a solution to the region’s broader housing shortage, but the $97 million is program generates new, permanently affordable units quickly, and without spending a cent on construction costs.

“We all know that we have a very strong rental market, and it’s causing us a lot of pain,” Sheila Dillon, the city’s chief housing officer, said at a news conference in Dorchester on Thursday. the milestone announcement. “There are many investors looking to purchase buildings in Boston… The acquisitions being celebrated today have put an end to speculation and the converted buildings will become community assets for decades to come.”

The concept is quite simple: When occupied apartment buildings are put up for sale, nonprofit tenant groups and community development corporations can apply for city funds to help pay for their purchase and obtain loans. In return, they agree to keep rents at an affordable, income-restricted level.

Essentially, the program helps community groups compete with deep-pocketed private investors to buy buildings and slow gentrification in lower-income neighborhoods. So-called naturally occurring affordable housing, older housing stock typically found in lower-income neighborhoods, such as triple-deckers and townhomes, is especially attractive to investors because it can be purchased more cheaply, rehabilitated and flipped for profit. Tenants are often sent away.

Former Mayor Martin J. Walsh launched the AOP in 2016 to help combat that dynamic, and the city has invested about $97 million in the program over the past eight years, including more than $50 million in American Rescue Plan Act funds, dedicated by Mayor Michelle Wu. .

The program’s largest contribution came in 2022, when the East Boston CDC used city funds to purchase a $47 million portfolio consisting of 36, 144-unit buildings in East Boston that was for sale. In total, they have now acquired 1,000 units, which amounts to “1,000 families preserved and rooted in our neighborhoods,” Wu said Thursday.

“Who cares if we create jobs and improve the quality of life… but then residents are pushed out of the communities they grew up in?” she said.

Yvette Moore, a resident of a two-family home in Dorchester that the city recently helped buy and limit, said Thursday that the program has brought stability to her and her neighbor after their landlord put the building up for sale and served them both with eviction notices. .

“Me, my neighbor and family can live without worries,” she said. “That’s all over.”

Andrew Brinker can be reached at [email protected]. Follow him @andrewnbrinker.