ARCHIVES OF LEAD STORIES
April 7, 2005
Housing starts on increase, funding cuts pose challenges
Jeremy Schwab
Last year, the city issued permits for 3,968 new housing units,
well over the 2,500 unit-a-year goal outlined by Mayor Thomas
Menino in his Leading the Way II plan, which seeks to provide
relief to residents facing an expensive housing market.
Leading the Way II calls for 10,000 new units permitted between
July, 2003 and July, 2007. The plan calls for 2,100 of the units
to be affordable.
The goal is to increase the supply of housing in order to cool
off the demand, which is driving up prices. Also, by supporting
the production of affordable housing the city aims to provide
housing for some city residents who cannot afford the market rate.
“Rent control is gone,” said Department of Neighborhood
Development Director Charlotte Golar Richie during an interview
last week. “We are trying to control at least a segment
of the supply. With the city trying to attract a strong workforce,
they are going to need housing.”
Despite the high number of permits issued last year, future funding
prospects for affordable housing appear uncertain.
“It’s a good thing that we exceeded our targets for
2004, because we believe 2005 will be a much more challenging
year, primarily for affordable housing,” wrote DND spokesman
DeWayne Lehman in an email. “Skyrocketing construction costs
resulting from worldwide shortages of construction materials are
going to make affordable housing even more difficult and expensive
to finance. The president’s budget is proposing the virtual
elimination of the Community Development Block Grant Program.”
The CDBG program is administered by HUD and gives cities discretionary
funds for community development. Last year, the city spent an
estimated $10.5 million — nearly half its CDBG money —
on housing-related programs, mainly housing production, according
to a Banner analysis of city data.
State funding for affordable housing production is also in jeopardy.
Governor Mitt Romney has not yet decided whether to support a
housing bond bill currently before the Legislature, said Department
of Housing and Community Development spokesman Bill Hailer.
“The administration is reviewing the bond bill,” said
Hailer.
The bond bill, dubbed An Act Relative to Financing the Production
of Affordable Housing, would inject $200 million in bond financing
into two trust funds.
The Affordable Housing Trust Fund, established in 2001 to finance
the production of new affordable housing units, would receive
$100 million in bond financing under the bill. The fund has been
financed in fiscal 2004 and fiscal 2005 with approximately $20
million in bond financing each year.
The Housing Stabilization Fund, which provides money to preserve
and rehabilitate affordable housing units, has completely run
out of funding. It would also receive $100 million in bond financing
under the bond bill.
The Massachusetts Association of Community Development Corporations
organized a mass lobbying day at the State House last week, with
270 CDC representatives pressuring legislators to support the
bond bill and other housing and economic development initiatives,
according to Madison Park Development Corporation Executive Director
Jeanne Pinado.
“A group of us met with Romney that day,” said Pinado.
“He didn’t say he was in support of the bond bill.
We asked him, and he instead started talking about the need for
funding for bridges.”
State and federal funding are not the only sources of affordable
housing production. Leading the Way II, which followed Menino’s
Leading the Way initiative that permitted over 7,500 units of
housing, relies on multiple sources.
Private developers of larger buildings are required to make at
least 10 percent of their units below market rate. Last year,
245 so-called inclusionary units were permitted, according to
DND statistics. Also, 102 units were permitted to private nonprofit
organizations, which did not receive city money but rely on state
and federal funds. Finally, 351 of the units permitted will receive
city assistance in the form of real estate or money.
So far, 4,748 units have been permitted under the program since
2003, including 927 affordable units. Last year, 381 of the affordable
units permitted, or 55 percent, went to households earning below
60 percent of the median income for the Boston area, which is
$49,620 for a family of four.
Golar Richie credited collaboration among city agencies, including
the DND, the Boston Redevelopment Authority, the Boston Housing
Authority and the Inspectional Services Department, with driving
the success of the program. She also cited contributions from
banks in the form of grants or loans for affordable housing development
or rehabilitation.
“There has probably been an unprecedented level of collaboration
among different departments,” she said. “The Inspectional
Services Department has been key in moving the permitting process.”
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