Boston City Councilors Michelle Wu and Kenzie Bok put forward an interesting idea in recent days: the city should use its substantial, unused bonding authority to generate up to $2 billion to invest in affordable housing.
The proposal takes advantage of the city’s excellent credit rating and a growing Wall Street appetite for environmentally and socially conscious investment vehicles to try to fill the gap left by the federal government and the private market at the lowest end of the affordability spectrum. Wu – who is running for mayor – and Bok said the intent would be to prevent a certain amount of displacement in the city’s working-class neighborhoods while growing its stock of energy-efficient homes by either financing new buildings or funding the purchase and retrofitting of existing ones.
But the proposal also serves to illustrate just how important the private sector is to solving the city’s and the state’s housing challenges, and all candidates for mayor should keep this example in mind as they shape their housing and development policy positions.
The $2 billion Bok and Wu point to would come over a 30-year period. Divided evenly, that results in roughly $67 million per year. That’s roughly enough to build a one or two mid-sized multifamily complex per year, or 73 median-priced triple-deckers.
For comparison, the city has around 38,000 two-family homes and 73,000 homes with three to four units, according to the U.S. Census Bureau. And in 2020 alone, 1,023 deed-restricted, affordable housing units were permitted citywide as a result of private and nonprofit development activity. According to the office of outgoing Mayor Marty Walsh, those units made up 30 percent of all new homes permitted citywide last year.
And many of these units will rise in the coming years as part of small and medium-sized multifamily buildings deep in neighborhoods from Allston to Dorchester – the very buildings that are often pointed to as signs of unwelcome change, even in thoroughly gentrified neighborhoods like Jamaica Plain or South Boston, despite in many cases offering middle-class rents in their market-rate units.
Simply put, private developers are now and will always be able to command far more resources to build housing, absent a deus ex machina like a sudden outbreak of bipartisan enthusiasm for affordable housing construction or rental voucher expansion.
The region’s dearth of housing is so significant it will take all hands on deck to solve, and the Wu-Bok proposal or others like it at the state and local level could be part of the solution. But in the face of the region’s dramatic need for new homes, anyone who suggests that curtailing private development offers a path forward is living in a fantasy land.
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