Real Estate

Why the city helped fund a $47 million real estate deal in East Boston

"As Boston continues to grow, we are moving urgently to ensure that all of our residents and families have access to safe, affordable housing."

By Ross Cristantiello

October 13, 2022

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A community development organization, with funding from the city of Boston and local investors, has purchased 36 apartment buildings in East Boston to ensure that they are permanently affordable. 

The acquisition, announced by Mayor Michelle Wu Wednesday, was made by a new entity known as the East Boston Neighborhood Trust. It will create the state’s first Mixed-Income Neighborhood Trust (MINT), a community development tool launched in 2019 that develops, owns, and operates rental housing and retail portfolios to fight gentrification and preserve current rent prices. 

MINTs are managed by existing neighborhood organizations, and the new one in Boston will be managed by East Boston Community Development Corporation. 

A city deed restriction will ensure that the units are income-restricted in perpetuity.

The buildings purchased contain 114 units, according to the city. The deal was made for $47 million, including a $12 million investment by the city. Boston used $9 million from the American Rescue Plan Act funds, $2 million from the Cares Act, and $1M in Inclusionary Development funds. 

“As Boston continues to grow, we are moving urgently to ensure that all of our residents and families have access to safe, affordable housing,” Wu said in a statement. “This acquisition of over 100 units in East Boston is a great example of what is possible when we use every tool as a City and partner across sectors to make Boston a city for everyone.”

Most of the units have three bedrooms, an important factor to address housing in the neighborhood traditionally found to have the largest average household size in Boston, according to the city. 

The 114 units are restricted as low income units for households at various percentages of the area median income (AMI). In total, 28 units are restricted for households at 50% AMI, 40 units are restricted at 60% AMI, 26 units are restricted at 80% AMI, and 20 units are restricted at 100% AMI, according to the city. 

In addition to the funds contributed by the city, money for this deal also came from the Boston Impact Initiative, the Hyams Foundation, the Boston Foundation, the Eastern Bank Foundation, City Life/Vida Urbana, and other private individuals. Also, the East Boston CDC was provided with a grant by the Barr Foundation to support the acquisition. 

“East Boston CDC has been focused on acquiring multi-families because these houses are the source of affordable family housing and the backbone of our neighborhood,” Executive Director of the East Boston CDC Al Caldarelli said in a statement. “But a new model was needed in order to combat displacement in a fast paced market with speculative investors.  This new model brings in socially minded investors and philanthropic institutions, and wouldn’t have been possible without the Mayor’s Office of Housing’s unwavering support.”

The seller in this deal was a joint venture between The Grossman Companies and Hodara Real Estate Group. That entity bought the properties in 2014 and 2015 to renovate them and then find a single buyer, according to The Boston Business Journal. 

“For many years, families in East Boston have been fighting to stay in their homes and live their lives in peace, without constant fear of displacement or deportation,” Co-Executive Director of City Life / Vida Urbana Mike Leyba said in a statement. “All families deserve housing that is affordable, safe, and transit-accessible. This major acquisition and preservation of affordable housing to the neighborhood is only possible because of the power and tenacity of local residents who continuously fight for community-wide stabilization, and the new East Boston Neighborhood Trust will be a core piece of that stabilization effort in East Boston for years to come.”