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City will use funds from developers to preserve affordable housing

Mayor Walsh today announced a $7.5 million loan fund to help "investor owners" buy multi-family units - with the condition they maintain at least 40% of the units as "affordable" for 50 years.

The money comes from the city's "inclusionary development" fund, into which developers of new residential buildings pay if they don't want to set aside their own units as affordable - aimed at people making up to 70% of the area median income.

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.

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According to the globe article: http://www.bostonglobe.com/business/2016/05/23/city-offering-cash-keep-a...

This program offers "up to $75,000 per unit" to keep rent affordable for 50 years.

That breaks down to $1,500 per year or $125 per month of city subsidy to maintain rents that are often $400-$600/month below the market rent.

I think the idea is great in theory but once again, shows that the politicians and activists are severely misunderstand the economics and cost required to maintain units at their declared affordability levels.

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Maybe the 75,000 is to help the initial purchase? Even with inflated prices nowadays, the cost of a mortgage isn't necessarily what's keeping middle class people from buying - it's lack of cash for a downpayment.

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To get that upfront $75,000, you're essentially "paying" or foregoing between $400-$800 a month in rent depending on the neighborhood for 50 years.

You're essentially locking yourself into a 50 year loan at 10-13%.

You can find loan sharks or credit card companies who can give you better terms than that for your down payment.

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This rent control law is going to make apartment owners lose lots of money , ( A developers nightmare) , how in the hell is the multi unit building owner who payed $3million last year in southie going to keep up with his mortgage payments with rent control peanut payments. It will take at least 180 years to pay off mortgage.

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Rent control is mandatory. If a developer doesn't want one of these subsidized loans, nobody's forcing him to take it. Sorry, but there really aren't communists under everybody's bed.

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Could still be used as a tool by many of these tenant political groups to vilify landlords who don't take advantage of it.

"How dare you try to increase my 20 year old rent by 5% when you could be getting money from the city. It must be greed!"

They won't acknowledge the limited scope of the project ($7.5 million divided by $75k a unit only gets you 100 units of affordability) or limited benefit (as mentioned about $75k is not great benefit for killing all asset appreciation for 50 years). Partial measures can actually be harmful.

Instead of being a tool to help the city remain affordable, it could become a weapon to attack small landlords.

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Without knowing all the details, it seems like $7.5 million won't go all that far to compensate landlords for 50 years of lower rents.

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Is the fund paying for entire buildings or just a tiny fraction of each? A decent four family might cost $750,000 so will this cover just ten of them? Even at half that price, 20 of them? Larger multis are well into the millions. Seems like a pittance if $7.5m is the real figure.

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When are they going to learn that by restricting profits - they are restricting development.

Make the rules and get the hell out of the way. No affordable housing program anywhere in the country has ever worked. The only thing that works is a very relaxed zoning program that encourages greater development through the incentive of personal profits - the market will take care of driving down costs to its marginal level.

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Eliminate all zoning and building codes. Let people go nuts making huge monstrosities which are poorly constructed, unsafe, etc. Once people learn how bad these units are they'll move out unless the rent is lower. In the end rents will go down as people won't want to live in a city that resembles a 3rd world country.

I'm [mostly] joking the point remains: The only way to bring down city rents is to make the city less desirable. It's basic supply and demand -- when demand is high, so are prices. Even with rapid building they aren't going to meet enough demand.

The best thing the state can do is improve public transit to the suburbs. Make it easy for people to live 25-50 miles outside of Boston and still get to work without an hour commute and the problem of affordable housing will be mostly solved.

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...and of course, increase affordable housing in the region. Malden, Quincy, Braintree, Revere, Newton, etc... anywhere served by the core T lines needs tons more housing especially, not just Boston.

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Building code is a state regulation. If the city threw away zoning we'd see development at a 19th century pace again which was massive in comparison to today.

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Strawman alert.

More housing absolutely has a negative impact on the rent price.

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Not saying eliminate codes - just saying that for example what is now single family becomes 2 family. 3 family becomes 4-6 family etc. Give people incentive to "upsize" the density - which you need in an urban environment (not even going to get into the big article 80 stuff that the BRA uses as extortion leverage).

Dump all the affordable housing restrictions and programs - and housing costs go down. Maybe you don't get middle class families living in the city - but probably at the worst they move to a 2-3 BR in say JP - and then 2-3 young professionals move into the formerly affordable housing unit. If the developers don't have to build this into their business model, their costs go down as well.

This is all a political shell game so the politicians can look like they are protecting the little guy - when in fact, as usual, all they are doing is screwing them.

These programs are mostly well-intentioned. There are a lot of bricks on the road to hell with affordable housing programs though. They don't work except maybe for the lucky few that win the lottery. Ever.

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I agree that city efforts to keep units affordable are waste of money and might possibly be making the problem worse. I also agree people should be able to change their single family into a 2 family.

But these sorts of "easy" changes won't affect the number of units available to bring prices down by any notable amount. And building 6 unit building in an area which is zoned for single families isn't always possible or sensible.

Again, the only "solution" to this problem is to make it easy for people to live outside of Boston and the neighboring towns and still get to work in a timely manor. There are affordable units in Kingston, etc but if the options are to sit in traffic for an hour or take a 90 minute train which comes only once every 2 hours there is little advantage to moving that far south.

If the train ran once every 30 minutes and it was a 30 minute ride, now you'd have a workable solution for middle class housing.

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Building codes? Who here ever suggested relaxing building codes?

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You are ignoring his central point about how laws pertaining to "AFFORDABLE" housing have failed. For instance, Chapter 40B, commonly known as the affordable housing law, was passed in 1969. Did it work? Is it working? No, but the morons in this state keep electing the same muppets into the legislature year after year while the state crumbles.

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Housing is not a luxury.

Housing should not be treated like widget sales.

Housing is comparable to health care and food -- everyone needs it to live, though there's also a market for the fancier or more cosmetic.
And as has been discussed on UHub at length before, no one pays the real cost for food-- because we, the greater society, recognize that having reasonably nutritious food easily available and affordable for even the poor is good for the country as a whole. Here's the discussion from a year ago on UHub: http://www.universalhub.com/2015/permanent-farmers-market-downtown-set-o...

Housing's primary purpose is not to be an investment for a wealthy absentee owner, or a way to get rich quick, or a place for drug dealers to park money, or anything except to HOUSE people. Any other purpose is a distant second or third.

I would add to all this that if your income is low enough to make finding half-convenient housing in Boston difficult, then it probably is low enough that finding the goods and services that make up for being priced into a long commute also difficult. After school child care that extends into the early evening, grocery delivery from Stop & Shop so you don't have to take 3 buses to reach America's Food Basket-- this adds up. The people who have the greatest need to take care of the basics themselves end up with less time to do it. You see your family less. You have little time to help kids with homework, to take sick parents to the doctor. Doing simple things, like a trip to the dentist, can take two hours longer if you live on a bus-only route than it would on the train

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... but it's too complicated to somehow give people the 'right' to live in a particular spot. You could live for cheap in the South End 40 years ago in a beautiful house. Not anymore and that's ok.

Here's an example of the 'where' issue - http://www.jamaicaplainnews.com/2016/05/18/affordable-housing-advocates-...

The activists want the Arboryard development to be 70% affordable housing. Is that practical? Seems like a recipe end up with a JP where there are only rich and poor people living there. I also don't know how you protect that neighborhood for specific people without it devolving into a boondoggle of insider connections in short order.

We should build affordable and middle income and even luxury housing all over the place for everyone more or less.

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No one has a right to a spot -- and that applies as much to the middle class and rich as well as the lower middle and poor. Simply because someone can buy something does not mean that they should. Being able to afford something does not confer a right to have it.

This is not about someone squatting at a spot and refusing to go. It's about looking at the complicated web of how people of different economic classes depend on each other to function-- and the rich depend on the poor as much if not more than the reverse.

Greater Boston/Cambridge and Framingham are the two business centers east of Worcester. People commute into both, less outward. If the middle and upper class in Boston want hospitals staffed with the people who serve food and prep operating rooms, hotels staffed with people who clean rooms and greet tourists, clerks and secretaries to assist your lawyer or your accountant, people who will suit up and pull asbestos out of your basement, then we need to recognize that these people have needs beyond their employment. As much as we discuss a living wage in eastern MA, most people on the lower end of the wage scale do not make enough to balance, as I wrote above, the incurred costs of a long commute.

We, all of us, are in a position of spending time or spending money. If you are richer, then this is a choice-- maybe you decide to drive more so you can live in Weston, or you enjoy knitting so you make your kids socks. But if you don't, you can buy a place closer or shop for the kids clothes.
Poorer people don't have that choice-- they don't have the money, so they must budget out the time. If they can't squeeze out the time, then something must be sacrificed to shake loose the money. They can't hire an au pair to keep an eye on the kids and get dinner started if their commute runs long. If a doctor and an orderly both leave Brigham & Women's at 5PM, and the doctor is driving to Prince Street in Newton while the orderly is taking the T to Bluefield Terrace in Mattapan, according to Google/MBTA, the doctor will get home in 21-45 minutes depending on traffic, but the orderly get's home in 68.* The kids are alone, dinner isn't half done when the orderly gets home.

So poorer people end up with less money, less time, and often more home obligations--hands on elderly parent care, helpng kids struggling with school because tutors are not an option, and so on.

Employers could pay higher wages, so that non-professional staff can afford to either live closer or pay for more support at home. And I credit those employers who do. Many don't. Many bitched when the living wage regulations were passed. Just as employers could pay wages high enough that employees could afford to buy their own health insurance, but employers don't. Therefore, they make up the difference by either providing group health coverage themselves, or defaulting to the exchange system. We need something similar for housing. If anyone has better ideas for providing affordable housing within a reasonable commute, I'm all for looking at the options. But saying that it's just too damn bad for low wage workers is untenable.

*Here's how I chose these addresses: I worked landscaping for a few years in the late '90s. We had a client on Prince St. who was a doctor at Brighams, and one of my co-workers who I became close friends with lived on Bluefield Terrace. Not farfetched that he could be an orderly.

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Is more about the problem with the MBTA service levels, but I guess I still don't see the end solution here. For every doctor in Newton, there's also some middle tier employee at say John Hancock who is taking commuter rail in from Norwood or Walpole or somewhere. If you're saying there should be more low income housing in Newton, absolutely. But when I look at Roxbury, Dorchester, Hyde Park, I see big swaths of housing which certainly seems to be lower income if not Section 8.

I'd guess that it is much easier for a person on public assistance, a truly poor person, to get family housing in the city than someone with working class job. So again, I'd like to see more of all kinds of housing- inhaler factory, Arboryard, Readville, etc...

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You're right, some of it is about the MBTA, but that goes back to the economic/social hub (sorry) nature of an urban area.

First, regarding your take Roxbury/Dot: an apartment that can be covered in full by a Section 8 voucher is extremely difficult to find in Boston, because HUD sets rents based on the region, not the specific city. Here are the Fair Market rents (FMR) HUD uses for the Boston-to Southern New Hampshire region: https://www.huduser.gov/portal/datasets/fmr/fmrs/FY2016_code/2016summary...

A Section 8 voucher in Massachusetts is typically calculated like this:

30% of household income
-90% FMR
Voucher amount

So, two adults being paid minimum wage for 36 hours/week each will be calculated to pay $951 out of pocket towards their rent, Section 8 will kick in $183 to $311 (depending on # of kids) via voucher. Assuming the higher, so I can limit this to 2 beds (let's say the 3 kids split a bedroom). So, we're looking at $1262.00/month rent.

I used Boardwalk Realty's 2 bedroom rental search, & came up with exactly eight in Roxbury. The cheapest, closest to meeting the Section 8 goal is $1675. All of the rest are north of $2000. So, for the very cheapest listing, the two adults would have to make up the difference and pay $1364 out of pocket.

Interestingly, they'd have slightly better luck in West Roxbury, though the commute would be worse.

Boardwalk RE search: http://www.rentboardwalk.com/boston-apartments-rental/results.php?loc=Ro...

(I chose Boardwalk because it's technically in Roxbury, and craigslist & boston.com had even fewer non luxury listings for Roxbury)

So, my question is, do we really need to continue to redevelop Roxbury and the remaining inexpensive parts of Dot & JP into upper middle to upper class neighborhoods? Since you and I began commenting on this article, UHub has published a new story that links through to the information that 25% of luxe condo purchasers are investors. Are we going to let people be displaced from easy access to downtown work, hospitals, eta al, so absentee investors can park money in empty apartments?

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If you are a taxpayer you pay the real cost. The government is not able to rub 2 pennies together and get 5, no matter how many times they attempt to claim otherwise.

What you are effectively calling for is the suspension of property rights. People tend not to be fans of government agents violently seizing their property which ultimately helps creates the inherent strife in between communist governments and their people.

You have no authority to defines a properties purpose. Only the property owner does.

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Tell Mayor Trashbag to fund Housing Vouchers for the Homeless! City Council requested $5 million, Walsh ignored.

https://www.cctvcambridge.org/sites/default/files/Gmail%20-%20Tell%20May...

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5,000,000 would seem to be clearly enough $ to get every homeless person off the street for at a minimum 1year. How much of that $ will go towards administrative costs, political jobs for social workers, street outreach workers, etc.? How much will lawyers and accountants get?

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It's for people and families making up to $60,000 a year. Have you noticed how much property goes for in Boston these days?

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This is a meaningless token fund with hardly any funding. As another poster said best way to reduce rents or at least control their growth is to let development happen relatively unabated.

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link that is created to tell the resident taxpayers of Boston how to use politics in dealing with the homeless. I have an idea. I just need to get it linked to Cambridge Community Television. Have The Mayor send all of Boston's Homeless to Cambridge. Problem solved.

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That's what most other cities and town do in New England. Put all these mentally ill and homeless people on Boston bound buses.

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Really? I know it was an Always Sunny in PA episode, but I didn't think it really happened.

Names?

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if Boston notices a pattern, they can sue. The City of San Francisco successfully sued the State of Nevada after it was discovered that one of their mental hospitals was sending patients to San Francisco to save money:

http://www.sfgate.com/bayarea/article/S-F-Nevada-reach-tentative-settlem...

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The actual busing happened on the west coast, though: http://www.sacbee.com/news/investigations/nevada-patient-busing/article2...

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Let's set up a funding mechanism so that the region pays for the region's homeless.

If some person with mental health issues from say, Belmont, ends up homeless on the streets of Boston, that's no more the responsibility of me as a Boston resident than it is for a Belmont resident. It should all be funded proportionately of course where Boston pays the lion's share but c'mon, it's a common obligation.

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is fleeting, when you don't have a permanent home.

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Lose a job in rural Western Mass or northern Maine, and if you end up jobless long enough, there's a good chance you'll end up in Boston. You may first try to hang on to your house, but if you lose it then you'll try to stay in your town or county, then stay near your town, then go to the closest city like Portland, but long enough without adequate work and you'll make your way to Boston. And that's not even addressing the people who end up here because they cannot get treatment for mental or physical problems in their hometowns.

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...how many new initiatives come forward when a mayor is trying to deflect attention from his imminent indictment.

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An alternative theory is that Boston politicians still feel invincible, and it's business as usual, with crony beneficiaries of this latest program already determined.

Think positive!

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.

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More like a bullet point for a re-election ad. He'll throw the "big" number out there and hope we forget that it broke down to relative pittance on an individual basis.

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I've never understood why people think affordable housing programs will fix anything. If a developer or landlord has to charge less for certain units, they have to make up the difference somewhere else. All you end up doing is shifting the burden. This program wouldn't come anywhere close to covering the losses for making the units "affordable". You can't fake lower prices - if you want affordable housing, you need to increase the supply.

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You can also reduce some of unnecessary demand by limited purchases and ownership from people without residency. Other places already do that.

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You can also reduce some of unnecessary demand by limited purchases and ownership from people without residency. Other places already do that.

How does this happen, and where? I'm curious how a municipality limits who can buy real estate.

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