Last summer, amid a police overtime scandal and calls to “defund” police following the death of George Floyd in Minneapolis, Mayor Martin J. Walsh and the City Council agreed to cut the police overtime budget by $12 million and use that money instead to help address racial disparities in Boston.
This week, they’re committing some of it to an issue that has long reflected who benefits from the city’s prosperity: homeownership.
The Walsh administration said it will earmark $325,000 — $250,000 of it from the overtime funds — for a matching-grant program to help lower- and middle-income home buyers in the city. The grant would provide up to $5,000 to qualifying “first-generation” home buyers who put up $2,500 of their own.
It’s part of a larger program launched by the nonprofit Massachusetts Affordable Housing Alliance, which has helped dozens of low- and moderate-income families buy or prepare to buy houses in an increasingly expensive city.
“Now more than ever in Boston, we must take steps to create equitable opportunities and access to resources for all Bostonians,” Walsh said in a statement. “Improving pathways to homeownership can help address disparities in wealth.”
Countless studies have highlighted the wealth gap between white and Black households in Greater Boston, most famously a 2015 analysis by the Federal Reserve Bank of Boston that found the median net worth for white households was $247,500, compared with $8 for Black households.
Much of that gap is driven by homeownership. White households here are almost twice as likely to own their homes as Black households, according to data from the Urban Institute. And given that home prices have more than doubled over the last 20 years, homeowners are far more likely to have accumulated wealth — in the form of home equity — than renters. That can then help pay for college, start a business, or help the next generation of a family buy a home of their own.
The MAHA, based in Dorchester, tries to increase access to that virtuous cycle through an array of homeownership classes and programs. Two years ago, with grants from Boston Children’s Hospital, Wells Fargo and the Greater Boston Real Estate Board, the alliance launched the grant program for “first-generation” buyers in Boston. (Distinct from “first-time” buyers, it targets people whose parents do not own a home, or lost one in foreclosure.) It has enrolled 168 people in home-buying prep classes; 14 have bought homes.
The city’s investment will help to expand the program, said Symone Crawford, the alliance’s director of homeownership education.
“First-generation buyers often don’t have enough savings, or family members with the financial resources to tap, when trying to buy a home,” she said. “This investment is critical in helping to level the playing field for those residents to become homeowners.”
The alliance is talking with other potential funders about large investments, as well, said executive director Tom Callahan, and hopes to continue expanding the program. Having City Hall’s backing, he said, should help.
“We have big ambitions, and this is sort of proof of concept,” he said. “Both the stamp of approval and the money itself are really helpful.”
Homeownership, particularly for Black and Latino families that have been shut out, has been a top priority at City Hall in recent years, said Sheila Dillon, Walsh’s chief of housing. Under Walsh, the city has approved tens of thousands of new apartments, much-needed supply that’s part of a broad campaign to rein in housing costs. Officials are seeking to address growing concerns about displacement and the lack of wealth-building opportunities, both of which could be eased by helping families buy houses.
Last year, the city, along with the Massachusetts Housing Partnership and several Boston-area banks, launched an extra-low-interest mortgage program for lower- and middle-income home buyers. When the overtime money became available, $2 million was dedicated to housing and homelessness prevention, and some of that allotment was put into the MAHA’s grant program.
“We’re really trying to double down on creating more affordable homeownership opportunities, and creating better tools to help people buy,” Dillon said.
Of course, the Walsh administration is in its waning days, with City Council President Kim Janey soon to take over as acting mayor as Walsh awaits confirmation as US labor secretary. With a fall election on the horizon, many Boston housing advocates are hopeful that homeownership — particularly for first-time buyers — is high on the list of urgent needs for the next mayor. Callahan said he’s confident that it will be.
“Obviously, the city’s got a lot of priorities,” he said. “But this should be right right up there.”