Massachusetts Gov. Mitt Romney announced a plan Monday to revitalize the state’s affordable housing shortage with a $100 million fund that will encourage the development of thousands of new mixed-income residences.
Speaking at The Metropolitan, a new housing development in the heart of Chinatown, Romney called the Priority Development Fund a “phenomenal development” in the ongoing struggle to lower the cost of living in eastern Massachusetts.
MassHousing, a semi-private housing bank that makes money through the sale of bonds on Wall Street, has fronted the $100 million for the fund.
“We need more housing for young people just out of college, families and elderly,” said Tom Gleason, director of MassHousing.
“These are not the taxpayers’ dollars,” said Eric Gedstad, a spokesman for MassHousing.
And taxpayers are fine with that. State Rep. Kevin Honan (D-Suffolk) and state Sen. Harriette Chandler (D-Worcester), co-chairs of the Committee on Housing and Urban Development, said they fully support the Republican governor’s initiative, citing the urgency of the housing issue.
The shortage of affordable housing in the region has had an adverse effect on Boston’s economy, as new businesses are wary of relocating to the city due to the cost of living for employees, Romney said. A $75 million portion of the Priority Development Fund will help urban developers close finance gaps and encourage the development of more than 5,000 mixed-income housing developments, such as The Metropolitan.
Doug Ling, executive director of the Asian Community Development Corporation, which was responsible for developing The Metropolitan, said the problem is that developers simply do not have enough incentives to build affordable housing.
“The problem is that low-income housing costs as much to build as market-priced housing,” Ling said. “Say you’re building units at $200,000 apiece. If you sell them for $140,000, that’s an immediate loss.”
The Priority Development Fund would compensate developers for these so-called gaps, Romney said.
The Metropolitan’s 23 stories tower over the surrounding neighborhood, and its sleek modernity makes it seem as unattainable for low-income families as it is massive. But The Metropolitan’s 251 units will be split between low- to moderate-income and market-value residences. While the Priority Development Fund did not aid in its development, the Metropolitan stands as an example of the type of project the fund will encourage, Gedstad said.
The fund will also attack suburban sprawl by focusing another $22 million on developing housing near transit sites, Romney said. The remaining $3 million will go toward long-term planning.
Romney said the fund’s flexibility will make it practical.
“We will work with developers to find uses for the money,” Romney said.
Aaron Gornstein, executive director of the Citizens’ Housing and Planning Association, said his agency supports the fund and addressed certain concerns in communities about the effect of new developments around T stations.
“It varies greatly from community to community,” he said, “but there is some resistance to family housing because some people are concerned about an increase in the amount of children in schools.”
Gornstein also said the city needs future initiatives to further combat the housing problem.
“There is still the issue of homelessness and the need for very low-income houses,” Gornstein said. Boston’s 50,000 existing low-income developments, most of which were built decades ago, also need to be preserved, he said.
But Gornstein remained optimistic about the impact of the Priority Development Fund on the housing crisis.
“It’s easy to fall into the trap of despair,” Gornstein said. “But this is a day for hope.”