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BOSTON - Tuesday, April 26, 2022 - Mayor
Michelle Wu today highlighted her proposal to invest $106 million to expand
opportunities for homeownership for Boston residents, including $60 million
through American Rescue Plan Act (ARPA) funds and $46 million in City funds
over three years. This proposal builds on Mayor Wu’s commitment to
prioritize federal funds to address Boston’s housing crisis and boosts the
City’s efforts to close the racial wealth gap by expanding affordable
homeownership opportunities for BIPOC households and first-generation
homebuyers.
“Homeownership is crucial to building
generational wealth and long term stability for families,” said Mayor
Michelle Wu. “We have an opportunity to transform what homeownership
looks like in Boston. These investments will support existing programs for
first time homebuyers, build generational wealth for Boston families, and
help bring Boston one step closer to becoming a Green New Deal city.”
The new investments in affordable
homeownership were part of Mayor Wu’s
first operating budget proposal and federal spending plan, which were formally filed with the Boston
City Council earlier this month.
The proposal includes $60 million in ARPA
funds to:
· Accelerate the production of affordable
homeownership units supported by the Mayor’s Office of Housing (MOH)
· Support down payment assistance programs,
including for first-generation buyers
· Expand the ONE+Boston Mortgage program, which lowers interest rates for
income-eligible buyers
In addition, the proposed FY23 Operating
Budget includes $3.4 million for homebuyer assistance programs, for a total
of $10.2 million over the next three years. These investments are on top of
$36 million from other City sources to support MOH’s homeownership
development pipeline, which currently includes 312 new income-restricted
units across 19 developments, all projected to break ground within the next
three years. With additional support from ARPA funds, this pipeline of
affordable homeownership units is expected to grow significantly. Together,
these funds represent a significant increase in the City’s investment in
affordable homeownership programs and production compared to previous
years.
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The proposed investments in homeownership
are part of an unprecedented commitment of $380 million to address housing
affordability and stability through the Operating budget, the Capital
budget, and federal recovery funds to build and acquire new affordable
units, upgrade public housing, and expand housing stability services and an
expanded voucher program.
“This significant investment will both
increase the stock of affordable properties in Boston and assist families
that want to purchase homes in a very competitive market,” said Sheila
Dillon, Chief of Housing and Director of Neighborhood Development. “In
order to increase generational wealth, stabilize our residents and invest
in neighborhoods, it is critical that we make additional resources
available for homeownership development and programs.”
“We are thrilled that Mayor Wu and our city
councilors understand the needs of thousands of MAHA members and
graduates,” said Symone Crawford, Executive Director of the
Massachusetts Affordable Housing Alliance. “And I’m proud of our MAHA
community leaders who have worked so diligently to make this happen. This
is an amazing accomplishment and a strong foundation for all of us to build
on.”
“Investment in affordable housing at all levels
matters if we are to foster generational wealth,” said Beverly
Williams, Executive Team Leader with the Greater Boston Interfaith
Organization. “GBIO is proud to celebrate this historic investment in
affordable housing that does just that.”
Two programs slated to receive funding from
the proposal, the ONE+Boston program and the financial
assistance program for first-time homebuyers (FAP), assisted more than 150 households buy
homes in the last year. Of those households, 60% were Black, Indigenous or
People of Color (BIPOC).
“Dedicating these federal funds to
first-generation and affordable homeownership will anchor our families in
Boston and help close the racial wealth gap,” said Councilor Kenzie
Bok, Chair of the Committee on COVID-19 Recovery. “I’m thankful for the
Mayor’s partnership and for all the advocates who have pushed the City of
Boston to make this enduring commitment.”
"We know that the lack of financial
capital for closing costs and down payments is one of the most significant
barriers to homeownership for BIPOC and first-generation homeowners,” said Councilor
Kendra Lara, Chair of the Committee on Housing and Community Development.
“This level of investment in the FAP and ONE+ program will ensure that
we're removing those barriers and creating more opportunities for housing
stability through homeownership for Boston residents."
Boston has an overall homeownership rate of
35 percent, considerably less than the statewide homeownership rate of 62
percent. Homeownership rates differ significantly by race and ethnicity, as
44 percent of Boston’s white households are homeowners, compared to 31 percent
of Black or African American households, 30 percent of Asian or Pacific
Islander households, and 17 percent of Hispanic or Latinx households.
The Mayor’s Office of Housing works to
expand access to homeownership by creating and preserving affordable homeownership
units and providing financial assistance to aspiring homebuyers,
particularly first-generation homebuyers.
The ONE+Boston program was designed to
supplement one of the state’s existing affordable mortgage programs (the
ONE Mortgage) by providing qualified buyers, based on area median income
(AMI), additional discounts on interest rates. With the ONE+Boston program,
qualified Boston residents who earn between 80% and 100% AMI will receive a
half percent (0.5%) discount rate off the reduced interest rate offered
through the ONE Mortgage product (currently about 4.65%). Boston residents
who earn below 80% AMI will receive up to one percent (1%) off of the
current ONE Mortgage rate. Qualified buyers will also be eligible for
downpayment and closing cost assistance through the Boston Home Center.
The ONE+Boston program and the First
Generation Homebuyer Program are two of several City resources available to
first-time homebuyers in Boston. Through the Boston Home Center, the City’s
one-stop-shop for homebuyers and homeowners, residents receive assistance
in purchasing, improving, and keeping their home through a suite of
resources including training, financial help and counseling to first-time
and first-generation homebuyers, guidance and funding for home improvements
and efficiency upgrades, and counseling to help families avoid foreclosure.
The Home Center also markets homes developed for income-eligible,
first-time homebuyers.
These proposals build on Mayor Wu’s
initiatives to address Boston’s housing affordability, including filing
a Home Rule
Petition relative to
real estate transfer fees and senior property tax relief, signing an Executive
Order relative to
affirmatively furthering fair housing, convening a Rent
Stabilization Advisory Committee to inform future legislative proposals, and announcing
the City’s new Chief of
Planning.
For more information about the proposed
budget, visit budget.boston.gov. For more information about the proposed
ARPA spending plan, visit boston.gov/recover |
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