Q2 REPORT 2017

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CITY OF BOSTONMAYOR MARTIN J. WALSH

Q2 REPORTJULY 2017

HOUSING A CHANGING CITY:BOSTON 2030

Boston 2030 Goal: • Create53,000additionalunitsofhousingby2030,inordertoaccommodatepopulation

growthofnearly100,000newpeople.

HOUSINGBOSTON2030: AccommodatingGrowthQ2 2017 SUMMARY

Q2 2017 PERFORMANCE: ALL HOUSING UNITSPERMIT TARGET Q2 2017 PERMITTED Q2 2017 % TARGET

663 1,684 254%

CUMULATIVE PERFORMANCE: ALL HOUSING UNITSPERMIT TARGET PERMITTED ACTUAL % TARGET

17,212 21,963 128%

Observations Q2 2017:

Completions

TwoandahalfyearsintotheimplementationofMayorMartinJ.Walsh’sHousingBoston2030plan,thenumberofnewunitscompleted,permitted,orapprovedhascontinuedtorise.

13,551newunitshavebeencompletedbytheQ22017reportingdateofJune30th;thisnumberrepresentsenoughhousingtoaccommodate25,000residents.ThedemographicsunderlyingHousingBoston2030projectedapopulationgrowthofapproximately30,800peopleby thissametimeperiod,sowhilesignificantprogresshasbeenmade,completionshavenotyetcaughtupwithhousingdemand.

That said, the 8,412 units currently in construction will house another 14,600 people whencompleted,whichshouldcontinuetoeasepressureontheresidentialrealestatemarket.

Ofthe13,551completedunits,40percentareaffordabletolowandmiddleincomehouseholds.

Record-Setting Permitting

With1,684newunitspermittedinQ22017,theCitysetanew20-yearrecordforthenumberofunitspermittedinasinglequarter.Q22017performancewastriplethetargetat254%.

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CITY OF BOSTONMAYOR MARTIN J. WALSH

HOUSING A CHANGING CITY:BOSTON 2030

Q2 REPORTJULY 2017

HOUSINGBOSTON2030: AccommodatingGrowthQ2 2017 SUMMARY

Observations Q2 2017, continued: A Robust Pipeline

Therearecurrently25,344newunitsintheCity’sdevelopmentpipeline;8,268ofthoseunitsintheCity’spipelinehavealreadyfiledforpermitsattheInspectionalServicesDepartment(ISD).

Rising Development Interest in Outer Neighborhoods

69percentofnewpermitapplicationsarefordevelopmentslocatedoutsideofthedowntowncore.Manyoftheseunitsareexpectedtobemoremoderatelypriced.Bycomparison,56percentofallnewdevelopmentcompletedtodatehasbeenindowntownlocations.

Construction Employment

The21,963unitsthathavebeencompletedorarecurrentlyinconstructionhavecreated22,800jobsintheconstructionsector.

Notable Projects Q2 2017:

RESIDENCES AT FAIRMOUNT: Thismixed income, transit-orienteddevelopmentonthecommuterlineinHydeParkpulledpermitstobeginconstruction.All27rentalunitswillbedeed-restricted,with3unitsreservedforthosemaking61-80%ofAMI,13forthoseearning60%,5forthoseearning50%,and3eachreservedforthoseearninglessthat30%orwhohavebeenhomeless.

1235 VFW PARKWAY:This80unitnewbuildingonthesiteoftheforemerIHOPwillbringsomeneededfamilysizedapartmentstoWestRoxburyrentaimarketwitha43two-bedroomand21three-bedroomunits.Tenunitswillrestrictedtothoseearninglessthan70%ofAMI.

UPPER WASHINGTON: This building in the Four CornersneighborhoodofDorchesterusedeightCIty-ownedandoneprivateparceliscreating35rentalsandstreetfrontcommercialspace.All35unitsaredeed-restricted;4areone-bedroom,19two-bedroom,and12three-bedroomunits;26unitsarereservedforthoseearninglessthan60%ofAMI.Ninearereservedfortheformerlyhomeless.

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CITY OF BOSTONMAYOR MARTIN J. WALSH

Q2 REPORTJULY 2017

HOUSING A CHANGING CITY:BOSTON 2030

HOUSINGBOSTON2030: Low-Income/Non-ElderlyHousingQ2 2017 SUMMARY

Boston 2030 Goals: • Increasethepaceoflow-incomehousingproductionby50%--from234annuallyfrom

2011-2014to347unitsannually.• Create6,500newlow-incomeunitsby2030.

Q2 2017 PERFORMANCE: LOW INCOME HOUSING UNITSPERMIT TARGET Q2 2017 PERMITTED Q2 2017 % TARGET

87 120 138%

CUMULATIVE PERFORMANCE: LOW INCOME HOUSING UNITSPERMIT TARGET PERMITTED ACTUAL % TARGET

1,803 1,691 94%

Observations Q2 2017: With120newlow-incomeunitspermittedthisquarter,Q22017wasthebestquarterfor low-incomeproductioninmorethantwoyears.

Completions

Atotalof1,286newlow-incomenon-elderlyunitshavebeencompletedtodate.Theseunitshavehousedanestimated2,250lower-incomeresidents.

Housing for the Homeless

Of the 1,691 new low-incomeunits permitted to date, 369 havebeen set aside for homelessindividualsandfamilies.

Low Income Pipeline

TheCitycurrentlyhasapipelineof1,128newnon-elderlylowincomeunits.595ofthoseunitshavebeenawardedfundingfromtheCityandarenowintheStatefundingqueuethatcouldnecessitateputtingoffconstructionbyayearortwo

WeanticipatethattheStatewillannounceanewroundoffundingawardsinJulyof2017,allowingmanyoftheseimportantprojectstomoveintoconstruction.

More Family Sized Housing Coming On Line

The creation of low-income family sized housing -- units with two or more bedrooms -- isincreasing.In2014,38percentofunitspermittedhadtwoormorebedrooms;in2017todate,thatsharehasrisento59percent.

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CITY OF BOSTONMAYOR MARTIN J. WALSH

HOUSING A CHANGING CITY:BOSTON 2030

Q2 REPORTJULY 2017

THE HARMON APARTMENTS:36unitsofADAcompliantaccessiblehousingforpeoplewithprogressiveneurologicaldisease,includingservicesandtechnologicaladaptions.20unitswillbesetasideforthoseearninglessthan60%ofAMI,Anothersixwillbesetasideforthoseearninglessthan30%,andanadditionalfourarereservedfortheformerlyhomeless.

Stabilizing Low-Income Housing Through Acquisitions

428 new low-income units have been created through the acquisition of market housingandconverting it toaffordablehousing. Inadditiontostabilizingtenanciesandcreatingnewaffordablehousingthatisprotectedfrommarketforces,thisisalsoasoundeconomicstrategyforcreationofnew,income-restrictedhousing.

In2016theCityexpandedthismodelwiththeAcquisitionOpportunityProgram,a$7millionfundthathascreatednewlowincomeunitsrequiringanaveragesubsidyof$75,000perunit.

Resources: Harnessing The Building Boom For Affordable Housing

Inorderto increaseproductionof lowandmiddle incomeunits, theCityallocatedadditionalfundingincreasingby$20mto$50.1minFY16and$54.9minFY17.Thisfundingwasmadepossiblethroughincreasedcollectionsfromprivate,market-ratedevelopment,including:

• Linkage: Collection of affordable housing obligations from commercial developmentshaveincreasedfrom$7.7mperyeartoanaverageof$10.3mannually.

• Inclusionary Development: Averageannualcollectionsofaffordablehousingcommitments

fromnewresidentialdevelopmentshaverisenfrom$8.5mbefore2015to$17.6m.

• Community Preservation Act: InFY18,thisvoter-approved1%levyisexpectedtogenerateabout$16mannually,withato-be-determinedamountcommittedtoaffordablehousing.

Notable Projects Q2 2017:

HOUSINGBOSTON2030: Low-Income/Non-ElderlyHousingQ2 2017 SUMMARY

COPPERSMITH VILLAGE RENTAL:41of56units inthismixeduse,mixed income development will be restricted, 33 units will bereservedforthoseearninglessthan60%ofAMI,withtworeservedforthoseearninglessthan30%,andanadditionalsixreservedfortheformerlyhomeless.

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CITY OF BOSTONMAYOR MARTIN J. WALSH

Q2 REPORTJULY 2017

HOUSING A CHANGING CITY:BOSTON 2030

HOUSINGBOSTON2030: MiddleIncomeHousingQ2 2017 SUMMARY

Boston 2030 Goal: • Create20,000newunitsofhousingaffordabletothemiddleclassby2030.

Q2 2017 PERFORMANCE: MIDDLE INCOME HOUSING PERMITSTARGET DEED-RESTRICTED MARKET RATE MIDDLE TOTAL % TARGET

250 80 372* 452* 181%

CUMULATIVE PERFORMANCE: MIDDLE INCOME HOUSING PERMITSTARGET DEED-RESTRICTED MARKET RATE MIDDLE TOTAL % TARGET

6,495 2,087 4,839* 6,926* 107%

*Affordabilitywascalculatedbasedontheaveragerentintheneighborhoodwherethepermitwasfiled.Numbersmaychangeasrentsarevalidated.

Observations Q2 2017: With452newmiddle-incomeunitspermittedthisquarter,2017isontracktobeastrongyearforproductionofhousingaffordabletothemiddleclass.1,168unitshavealreadybeenpermittedinfirsttwoquartersof2017,comparedto980inallof2016.

Completions

A total of 1,092 deed-restricted and 3,056 market-rate units affordable to middle incomehouseholds have been completed to date, for a total 4,148 new units. Housing Boston 2030demographicprojections indicatedtheCityneededtocreate3,393newmiddle-incomeunitsbythisdate.

Withthiskeyproductiongoalbeginningtobefulfilled,thehopeisthatastabilizationofrentsaffordabletothoseearningmiddleincomewageswillcontinue.In2016,rentsinexistinghousingstock(builtpriorto2011)outsidethedowntowncoredecreasedby5percentfrom2015.TheCityiscloselymonitoringthiskeymetric.

Increasing the Pace of Middle Income Production

Theaveragepaceofproductionofhousingaffordabletothemiddleclasshasrisensubstantially–from821unitsannuallyfrom2011-2014to1,446unitsfrom2015untilnow.

This increase isdrivenprimarilyby the increasingshareofnewproduction inmiddle-incomeneighborhoods.From2011-2014,only34%ofnewstartswereinmiddle-incomeaffordableareasoutsidethedowntowncore;bycontrast,from2015untilthedateofthisreport,55%havebeen.

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CITY OF BOSTONMAYOR MARTIN J. WALSH

HOUSING A CHANGING CITY:BOSTON 2030

Q2 REPORTJULY 2017

Observations Q2 2017, continued: A Robust Middle Income Pipeline

Basedonestimatedaffordabilityandpricingofnewconstructioninthelocalmarket,theCityestimatesthatthereiscurrentlyapipelineof8,015middleincomeunits.Ofthese,3,660havealreadyfiledforpermitswithISD.TheseunitswillbeformallycountedoncetheyarecompletedandtheCityhasverifiedsalesandrentalprices.

Creating New Homeownership

745ofthe6,926middleincomeunitspermittedtodate(11%)areownershipunits.Bycomparison,thehomeownershiprateforthemiddleclassis43%inBostonand69%inGreaterBoston.Thisshortage in production of new homeownership units will keep the homeownershipmarketcompetitiveforcondominiumsfortheforeseeablefuture.

TheMayor’sHousing InnovationLaband theDepartmentofNeighborhoodDevelopmentareexaminingthisissuetocreatenewstrategiestoincreasehomeownershipopportunitiesaffordabletothoseearningmiddleincome.

TheBostonHomeCentercontinuestoeducatepotentialhomebuyersaboutthefinancialrealitiesofhomeownershipandhowbesttoprepareforit.

HOUSINGBOSTON2030: MiddleIncomeHousingQ2 2017 SUMMARY

Q2 2017 PERFORMANCE: FIRST TIME HOMEBUYERS ASSISTEDPURCHASED CITY

CREATED HOUSINGPURCHASED OPENMARKET HOUSING

TOTAL FIRST TIME HOMEBUYERS ASSISTED

24 17 41

CUMULATIVE PERFORMANCE: FIRST TIME HOMEBUYERS ASSISTEDPURCHASED CITY

CREATED HOUSINGPURCHASED OPENMARKET HOUSING

TOTAL FIRST TIME HOMEBUYERS ASSISTED

365 303 668

CUMULATIVE PERFORMANCE: POTENTIAL HOMEBUYERS EDUCATEDQ2 2017 GRADUATES PREVIOUS GRADUATES* TOTAL GRADUATES*

866 23,307 24,173

*OnlygraduatesduringHousingBoston2030planperiodcounted.

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CITY OF BOSTONMAYOR MARTIN J. WALSH

Q2 REPORTJULY 2017

HOUSING A CHANGING CITY:BOSTON 2030

HOUSINGBOSTON2030: MiddleIncomeHousingQ2 2017 SUMMARY

Observations Q2 2017, continued: Helping Residents Stay in Their Homes

StabilizingBoston’sneighborhoodsisakeycomponentofthehousingplan.OneofthewaysinwhichtheCityisaidingthiseffortisbyensuringthathomeownersareretainingandmaintainingtheirproperties--assistinghomeownersatriskforforeclosure,forexample.TheCityalsooffersassistancetohomeownersinneedofhelprepairingtheirhomes.Althoughtherearenoformalgoalsforthisworkinthehousingplan,theCitytracksitseffortsinthisarea.

Note: As ownership retention is a key component of the strategy for housing Boston’s elders, senior ownership retention is reported in the Seniors section of this report.

Q2 2017 PERFORMANCE: OWNER RETENTIONNON-SENIOR

HOME RENOVATIONSNON-SENIOR

FORECLOSURES PREVENTEDTOTAL NON-SENIOROWNER RETENTION

20 24 44

CUMULATIVE PERFORMANCE: OWNER RETENTIONNON-SENIOR

HOME RENOVATIONSNON-SENIOR

FORECLOSURES PREVENTEDTOTAL NON-SENIOROWNER RETENTION

488 545 1,033

Notable Projects Q2 2017:

GLENWAY ROXTON NEIGHBORHOOD HOMES: Three emptyparcelsoflandinRoxburyarebeingturnedintothreetwo-familyhomes, or six units of housing. Homes will be sold to income-certifiedfirst-timehomebuyersearningmiddleincomewages,andaredeed-restricted.

CLIPPERSHIP WHARF:ThismixedusedevelopmentinEastBostonwillcreate478units,and fund 52unitsat 125SUMNERSTREETincluding22familysizedrentalunitsrestrictedtoverylow-incomeBHAtenantswhoseunitsarebeingreplaced.30condoswillalsobecreated;14willbedeed-restrictedforthoseearningbetween80-120%ofAMI,andtheothersixteenwillbemarketrate.

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CITY OF BOSTONMAYOR MARTIN J. WALSH

HOUSING A CHANGING CITY:BOSTON 2030

Q2 REPORTJULY 2017

HOUSINGBOSTON2030: SeniorsQ2 2017 SUMMARY

Boston 2030 Goal: • MaintainBoston’shistoricpaceoflow-incomeelderlyhousingproduction,inthefaceof

theeliminationoftheFederalSection202program,creating75unitsannually,and1,500newunitsby2030.

Q2 2017 PERFORMANCE: SENIOR HOUSING UNITSPERMIT TARGET PERMITTED ACTUAL % TARGET

19 0 0

CUMULATIVE PERFORMANCE: OWNER RETENTIONPERMIT TARGET PERMITTED ACTUAL % TARGET

487 284 58%

Observations Q2 2017Theproductionofaffordableseniorhousingisnotkeepingpacewithstatedproductiongoals.However,theCityhasidentified192unitsofseniorhousingthatareeitherinthepipelineorabouttobeginconstruction.ManyofseniorprojectsarecurrentlywaitingforStatefunding.

Completions

All293elderlyunitspermittedtodatehavebeencompleted,ofwhich284arelow-incomeunits.Theseunitsshouldhouse391seniors.

New City Line Item

InFY16,theCitycreatedanew$1.75mlineiteminitsbudgettosupportSeniorhousingproduction.Thishelpstooffsettheaverageannuallossof$9.75minFederalSection202funding.

Helping Seniors Retain Their Homes

Low-income seniorhomeowners canexperiencefinancial stress, as thecostofmaintainingahomecanbeprohibitivelyexpensiveonafixedincome.Deferredmaintenanceandmortgagedelinquencies,however,puttheseniorinunsafelivingconditions,andatriskforforeclosure.Toaddresstheseissues,theCityoffersinterest-freehomeimprovementloansthatzeropaymentsuntilthehouseissoldortransferred.

TheCityalsooffersforeclosurepreventionservicesandgeneralcounselingtoseniorhomeowners.

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CITY OF BOSTONMAYOR MARTIN J. WALSH

Q2 REPORTJULY 2017

HOUSING A CHANGING CITY:BOSTON 2030

HOUSINGBOSTON2030: SeniorsQ2 2017 SUMMARY

Notable Projects Q2 2017

Q2 2017 PERFORMANCE: SENIOR HOMEOWNER RETENTIONHOMES

RENOVATEDFORECLOSURES

PREVENTEDTOTAL SENIOR

HOMEOWNERS RETAINED

14 10 24

CUMULATIVE PERFORMANCE: SENIOR HOMEOWNER RETENTIONHOMES

RENOVATEDFORECLOSURES

PREVENTEDTOTAL SENIOR

HOMEOWNERS RETAINED

326 154 480

150 RIVER STREET: Community process and discussion aboutthe siting of affordable, senior rental housing in Mattapan ona 42,000 square footparcel. Twoproposalswere receivedaftertherequestsforproposalweremade,andbothdevelopershavepresentedtothecommunity,whichhasrequestedtimetocraftcomment.

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CITY OF BOSTONMAYOR MARTIN J. WALSH

HOUSING A CHANGING CITY:BOSTON 2030

Q2 REPORTJULY 2017

COLUMBUS AVENUE DORMITORY: NortheasternUniversity’snew dorm was permitted in Q2 2017, and will add anadditional812dormbedstoitsdowntownBostoncampus.

HOUSINGBOSTON2030: StudentsQ2 2017 SUMMARY

Boston 2030 Goal: • Create16,000newundergraddormbedsby2030,reducingthenumberofundergraduates

inprivatehousingby50%by2030.

Q2 2017 PERFORMANCE: DORMITORY BEDSPERMIT TARGET PERMITTED ACTUAL % TARGET

235 812 346%

CUMULATIVE PERFORMANCE: DORMITORY BEDSPERMIT TARGET PERMITTED ACTUAL % TARGET

3,294 5,664 172%

Observations Q2 2017Q22017dormproductionwasmorethantriplethetargetpace;Northeastern’sColumbusAvedormitorywilladd812newbeds.ThisoneprojectputtheCityaheadofscheduleinproductiontargets.

Completions

Of the 5,664 dormbeds permitted, 3,072 are complete.With these completions removingstudentsfromthehousingmarket,approximately800-900unitswillberestoredtoworkforcehousing.

Off Campus Count

Thenumberofoff-campusundergraduatesinBostonhasdecreasedfrom24,492inthe2013-14academicyearto23,348inthe2016-17academicyear.

Dorm Pipeline

Thedormitorypipelinenowstandsat1,577netbeds.TheCitywillcontinuetoworkwithBoston’scollegesanduniversitiestoencourageadditionaldormitorydevelopment.

Notable Projects Q2 2017

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CITY OF BOSTONMAYOR MARTIN J. WALSH

HOUSING A CHANGING CITY:BOSTON 2030

Q2 REPORTJULY 2017

HOUSINGBOSTON2030: PreservingAffordableHousingQ2 2017 SUMMARY

Boston 2030 Goals: • Retainatleast97%ofat-riskaffordablehousingunits(29,534units)by2030.• Keeplossesofaffordablehousingunitsbelow3%(913units)withaspecialefforttoprotect

theexpiring1,043“13A”unitsthatweredevelopedwithStatefunding.

Q2 2017 PERFORMANCE: AFFORDABLE RENTAL PRESERVATIONTARGET Q2 2017 PRESERVED Q2 2017 % TARGET

325 52 16%

CUMULATIVE PERFORMANCE: AFFORDABLE RENTAL PRESERVATIONTARGET PERMITTED ACTUAL % TARGET

12,045 10,674 89%

Observations Q2 2017: Boston’scommitmenttoaffordablyhouseitslower-incomeresidentsdatestotheBostonHousingAuthority’sfirstpublichousingdevelopments inthe1930s.Sincethen,theCityhasaccrueda50,000-unitportfolioofaffordablehousing,makingitthenation’sleader.with20%ofitshousingstocksetasideorrestricted.30,477ofthoseunitsareprivately-ownedrentalunits,manycreatedunderaffordabilityagreementssettoexpire,givingtheownertheoptiontoconverttomarketrate.Preservingaffordability in97%oftheseunits isahighbar,buttheCity isshowingsomeprogresstowardachievingthisgoal.

In Q2 2017, preservationwas below target, although cumulative efforts are performing neartarget.Moreimportantly, lossesarewellbelowthecapneededtomaintain97%,withonly61unitslostoutofapotential188.Inaddition,noneofthe1,04313AunitsthatweredevelopedwithStatefunding,andareineligibleforfederalassistancefunds,werelost.

Preservation Pipeline

TheCitycurrentlyhasanactivepipelineofpreservationwith1,233unitsin12projects.

Q2 2017 PERFORMANCE: LOSS MITIGATION LOSS CEILING

Q2 2017 NON 13A LOSSES 13A LOSSES TOTAL UNITS LOST

13 0 0 0

CUMULATIVE PERFORMANCE: LOSS MITIGATION LOSS CEILING

Q2 2017 NON 13A LOSSES 13A LOSSES TOTAL UNITS LOST

188 61 0 61