Wu proposes $110-million loan fund to help spur more housing in Boston; could get additional money from state

Mayor Wu says she will ask the City Council to approve a $110-million rotating fund to help tip the balance on new housing developments whose builders would otherwise hold back because of the high cost of financing these days - with the first project to be a mixed-income apartment building as part of the complete overhaul of Bunker Hill housing project.

In recent years, developers have won city approval for roughly 30,000 housing units that they then never built.

Wu's proposed Housing Accelerator Fund would lend money to developers at lower rates than they could get on the open market for projects that meet city and state goals of affordability, climate resilience and "equity" - giving lower-income residents a way to build wealth through home ownership, which in Boston would mean financing some condo projects. At least 20% of the units in any project that receives a city loan would have to be rented or marketed as affordable - as compared to the 17% requirement for larger projects that are funded in other ways.

As the developers pay back the loans, the money would go back into the fund for other projects.

The funds to start lending would come from money the city has sitting in the bank, with additional money expected from the state's new Housing Momentum Fund.

The first project Wu would fund is a nine-story, 265-unit apartment building with 58 affordable units as part of a larger project by Leggat McCall and the Joseph J. Corcoran Co. at the Bunker Hill development in Charlestown. The developers plan to replace all of Bunker Hill project's 1,100 low-income apartments and to then add 1,599 additional apartments, ranging from new low-income apartments to market-rate units. Construction of the new building to be partially funded by the city fund could begin next summer.

Wu said she will formally ask the council for its approval at its next meeting, on Dec. 4. However, given that that is at the end of the council's legislative year, which might not give it enough time to hold a normally required hearing, she might have to resubmit the proposal in January.

Among the proposal's backers is Councilor Brian Worrell - who had proposed a similar $150-million fund. He said he was particularly happy with the mayor's decision to include condos as eligible for loans.

When we talk about home ownership, what we’re really talking about is stability and ensuring our Boston residents can stay in Boston. t is about providing real stability and pathways to economic empowerment. And the equity that these people and families are building are not only a tool to build wealth personally, but a crucial step to address the extreme wealth divide in this city.