Watertown has started a trust to help fund the development of affordable housing as the community grapples with climbing home prices across the city.
Under state law, the Watertown Affordable Housing Trust is allowed to set aside funds to buy property or preserve existing affordable housing, according to a city statement announcing the trust.
George Proakis, Watertown’s city manager and a member of the new trust’s board, said in an interview the fund will be an important tool for dealing with soaring housing costs facing many of the city’s residents.
“We have a substantial housing challenge in our entire region,” Proakis said. “We as a whole are committed to making sure that we can stretch the money we have ... to provide more opportunities [for] stable housing.”
The trust will oversee Watertown’s affordable housing funds, including money from the WestMetro HOME Consortium and the federally funded Community Development Block Grant program, according to the city. The trust also will advocate for affordable housing, serve as a policy body on those issues, and provide advice to city officials on housing.
The new trust is starting off with about $750,000 drawn from federal grants and other sources, according to Proakis.
The report warned that the median sales price of homes in Watertown had increased substantially since the Great Recession. For many residents, housing costs consumed much of their income, and prices made it difficult for renters to purchase their own homes in Watertown.
In August 2022, the median sales price for a single-family home in Watertown was about $1.3 million, up from about $600,000 at that same point in 2017, according to the real estate website Redfin.
The plan urged the city to preserve existing affordable housing, and increase the number of housing opportunities for households earning below 60 percent of the area median income. In the Boston area, that income level is $140,200 for a family of four, according to the US Department of Housing and Urban Development.
Watertown has nearly 1,200 units — roughly 7.5 percent of its housing stock — included in the state’s subsidized housing inventory, and meets the state’s requirements under the Chapter 40B affordable housing law, the report said.
Chapter 40B requires communities have at least 10 percent of their housing stock meet those requirements, or set aside at least 1.5 percent of their land area for affordable housing, according to the report. In Watertown, about 2 percent of the city’s land area meets the latter standard, the report said.
Many renters also face a price gap between what they can afford, and the market rate for single-family homes and condos in Watertown.
“This ‘price gap’ means even a relatively affluent individual or family must stay in the rental market (or look elsewhere),” the report said.
More than one-third of Watertown renters are cost-burdened, meaning they spend more than 30 percent of their gross income on housing, according to the report. Another 28 percent of homeowners were also cost-burdened.
“Because cost burden is a direct reflection of household income, the impact of being cost-burdened is more acute for lower-income households that have fewer financial resources to meet other necessary household expenses,” like food and transportation, the report said.
In Watertown, the city’s median household annual income was estimated at about $101,000, according to the report. But that figure differed between renters and homeowners.
Homeowners’ median income in Watertown was about $120,000, while the income level for renters was about $81,000, the report said.
Many renters have “very modest” incomes in Watertown, the report said: A quarter of renters have incomes of less than $50,000, while about 14 percent have less than $25,000. .
Watertown has an estimated 36,000 residents, according to the city’s housing plan, and about half of the city’s housing stock is renter-occupied.
About one-third of Watertown’s housing units are single-family homes, and another third are two-family buildings.
Another quarter of Watertown’s homes are in buildings with five or more units, while the remaining homes are located in three- and four-unit buildings, the report said.
Proakis said the soaring costs of housing are not unique to Watertown, but the city must take steps to help residents have access to housing that “leaves people in a situation where they know that their rent or mortgage is affordable for them.
“There’s a lot of work to do to get there,” he said. “We all want to keep focused on addressing it.”
John Hilliard can be reached at firstname.lastname@example.org.