Vacant Site Acquisition Fund to create more affordable housing
New fund's finance options give nonprofit developers resources to build affordable housing.
Mayor Martin J. Walsh, along with partners Community Economic Development Assistance Corporation (CEDAC) and the Local Initiatives Support Corporation (LISC), today announced the creation of the Vacant Site Acquisition Fund, which will provide new financing options for nonprofit developers to acquire vacant and underutilized land and buildings for affordable housing development.
Using a $2.5 million investment from City funding to leverage $6 million in private funding provided by CEDAC and LISC, the Vacant Site Acquisition program is a critical part of the City's anti-displacement strategy, and is designed to help nonprofit developers compete in Boston's real estate market.
"Addressing rising housing costs is necessary for preserving the diversity and character that makes Boston a place where all residents can thrive; so we need to continue to think innovatively about ways to give Boston residents more affordable housing options," said Mayor Walsh. "The Vacant Site Acquisition Program is another important tool in our affordable housing strategy. As our neighborhoods develop and change, it is vital that our nonprofit partners are able to compete in today's real estate market to acquire developable sites. Boston is lucky to have strong lending partners like CEDAC and LISC who are joining us in fighting displacement by making housing more affordable to neighborhood residents."
The Vacant Site Acquisition Fund establishes a pilot fund of more than $8 million to provide nonprofit developers with financing to acquire vacant land and underutilized buildings appropriate for the development of mixed income, multi-family housing. The program is a direct result of feedback from Boston's affordable housing advocates and nonprofit partners, as the nonprofit development community needs the resources and tools to gain control of sites, and to help to preserve affordability in rapidly-changing neighborhoods. The program's focus on acquiring eligible sites enables nonprofit developers to better compete in the market.
"CEDAC is pleased to partner with the City of Boston and LISC Boston to provide more opportunities for affordable housing development in Boston," said Roger Herzog, the executive director of the Community Economic Development Assistance Corporation. "Under Mayor Walsh's leadership, the City is taking action to help nonprofit developers successfully compete for developable land and we look forward to implementing this innovative strategy."
"When the real estate market heats up, community-based developers of affordable housing can be priced out," said LISC Boston Executive Director Bob Van Meter. "This tool helps them purchase vacant sites to create affordable homes where they are needed most."
The Vacant Site Acquisition Fund has three components:
- Site Deposit Assistance: The City is providing short-term bridge loans up to $200,000 at no interest to assist nonprofit developers in putting deposits on potential acquisition sites.
- Acquisition Fund: A combined $8 million fund, using money contributed by the City, CEDAC, and LISC, will provide quick approval for low interest rate acquisition financing with longer terms to acquire sites and plan for future development.
- Holding Cost Assistance: The City is providing up to $300,000 at no interest to provide loans that will help defray the cost to developers of holding property for a three to five year period. This funding is necessary because affordable housing can take longer to produce than market-rate housing due to the complexity of funding structures.
The City of Boston, CEDAC, and LISC have adopted a streamlined approval process so nonprofit developers can better compete in the private market. The day-to-day operations of the fund, including screening and selection of applications, will be overseen and managed by CEDAC.
The Vacant Site Acquisition Program is part of the Walsh Administration's strategy to combat displacement and builds on the foundation of the City's Acquisition Opportunity Program. The Acquisition Opportunity Program earmarked $7.5 million of Inclusionary Development funds to help responsible investor-owners acquire occupied, multi-family rental properties. Property owners assisted through the program are required to maintain the tenancies of residents in good standing and are also required to maintain affordable rent levels for the units in the property for a minimum of 50 years.
In addition, the City's efforts to combat displacement and address rapidly changing neighborhoods included the launch of Boston's first Office of Housing Stability, which provides residents no-cost, one-on-one assistance with issues around tenancy, and Mayor Walsh's filing of a five-bill anti-displacement legislative package to help existing tenants remain in their home by expanding tenants' rights, rewarding good landlords, and creating additional funding for affordable housing.
Today's announcement ties into Imagine Boston 2030, Boston's Citywide plan, which aims to proactively encourage a broad range of housing growth for people of all income levels and stages of life. For more information on Imagine Boston 2030, please visit imagine.boston.gov.
Applications for the Vacant Site Acquisition Fund are currently available, and can be submitted via CEDAC's web site.
