What Landlords Need to Know about the Boston Housing 2020 Initiative

In September of 2013, former Boston Mayor Thomas Menino announced a plan that would greatly increase the amount of available housing within the city. Using a proposed $16 billion in public and private investment, the goal is to add 30,000 new housing units to the city by the end of the 2010s. A large portion, 25,000, of these homes will be priced at market rates, that is, whatever a buyer is willing to pay. The rest of the homes will be classified as affordable housing for middle- and lower-income buyers.

The Boston real estate market has exploded in recent years, with home prices growing at nearly double the rate that incomes are growing. The City of Boston hopes that increasing the supply of homes, in addition to setting aside some property for lower-income families, will make living in the city more affordable, especially for students and young professionals just starting out.

Boston is in a unique position. As one of the premier “college towns” in America, it has a large amount of young, eager talent ready to enter the workforce. However, many of these young graduates are choosing to live in more affordable areas as they get their careers started. This new housing initiative aims to increase the availability of more affordable housing in the city, in order to attract and retain young professionals.

Boston Housing 2020 Initiative

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Boston Landlords Impacted by Boston Housing 2020 Initiative

But what does the initiative mean for landlords? As of now, the initiative is focused only on increasing the amount of housing units available to buy. There is currently nothing in the plan regarding rental property or lease rates. However, increased supply and lower prices may make buying a more attractive option for some tenants, so rents may have to be lowered to remain competitive.

On key part of the initiative is an effort to streamline the permitting and development process. So if you are a developer in addition to a landlord who is looking to build units to lease, you could see some savings in your building costs. Be sure to check with local authorities to see if the subsidies apply for your specific project.

The initiative is focused mainly on providing affordable housing to residents of Boston. It is unknown at this point what kind of restrictions will be placed on investment properties, but if you plan on buying a property that will not be your primary residence, it is advisable that you have an attorney look over any paperwork that comes your way.

As America becomes more urban and people choose to remain closer to their jobs and nightlife, home prices in the areas will creep upward. Initiatives like the one in Boston aim to anticipate that growth and ensure that there are options for the future residents. Hopefully, more American cities will adopt this model and plan for America’s growth well into the 21st century.

This article was written for the Boston Real Estate Observer by Stephen K Hachey. Stephen is a real estate attorney specializing in loan modifications, short sales, foreclosure and much more. He is also the owner of his own practice, the Law Offices of Stephen K. Hachey. This article is for general informational purposes only and does not establish an attorney-client relationship. Please contact a licensed attorney in your state of residence. For more information on Attorney Hachey’s services, visit his website at www.floridarealestatelawyer.org.