Boston Boosting Resources for Development Fund

Boston is putting its money where its mouth is when it comes to building more affordable housing.

Mayor Michelle Wu is proposing $110 million to seed an “accelerator fund” designed to provide low-cost financing to developers of approved multifamily projects, the Boston Business Journal reported. That’s a $10 million increase from what she proposed earlier in the fall. The additional money is expected to support more condo projects as a means to increase homeownership opportunities.

The fund will be accessible to private market-rate developments, but only if at least 20 percent of units are income-restricted.

The city is essentially piggybacking on similar initiatives already unfolding at the state level. That fund, similarly dubbed a “momentum fund,” has $50 million in financing.

City developers will apply through MassHousing, a state agency, for the municipal funding. City and state have the option to work together to finance developments, according to officials, with MassHousing supporting underwriting of the deals.

Both the city and state funds are designed to be revolving, meaning collected incomes will be reinvested.

So far, the one project to access state financing through one of the funds is in Boston’s Allston neighborhood.

No city-state joint investments are expected prior to the spring. Boston’s City Council also still needs to approve the accelerator fund, though major opposition is not expected.

Boston is facing a financing gap that is handcuffing its ability to build out of a housing crisis. There are 30,000 multifamily units in the city that have been approved but have yet to be constructed.

— Holden Walter-Warner