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Massachusetts affordable housing projects roiled by SVB meltdown

Affordable housing under construction in Dorchester.David L. Ryan/Globe Staff

While Boston’s tech and life sciences communities were scrambling to handle the fallout from Silicon Valley Bank’s collapse, there was another crucial industry thrown into chaos as well: affordable housing.

Dozens of nonprofit developers across the state have for years relied on loans and sponsorships from Boston Private Bank and Trust, which SVB acquired in 2021, to help finance subsidized housing projects.

So when news of the bank failure hit on Friday, there was a moment of panic.

“It was a shock,” said Kimberly Lyle, CEO of the Dorchester Bay Economic Development Corporation. “There are a lot of nonprofits — including a number of smaller groups that don’t have a lot of capital — that rely on SVB for loans and tax credits. We still aren’t quite sure what this means for projects that were financed through Boston Private.”


Nationwide, SVB has lent more than $2.7 billion and made $1.3 billion of investments for new construction or rehabilitation of affordable housing, according to the bank.

Suddenly, the financing of active projects was thrown into uncertainty.

Citizens’ Housing & Planning Association, a housing advocacy group, held a meeting with nonprofit affordable housing developers Monday afternoon to discuss the bank failure’s impact on active projects and deals relying on SVB funding that were near closing.

Lyle said the announcement from the federal government Sunday that depositors will be able to access their money held with SVB has assuaged some of those concerns. But there is still confusion about how projects will proceed, and concern about the loss of a reliable affordable housing lender.

If those funds weren’t available, she said, the bank failure could have had a major impact on affordable housing production in the region. Nonprofit developers that took out construction loans through Boston Private would be left scrambling to pay their contractors, and those that relied on sponsorship from the bank could have taken a major hit.


Her group doesn’t have any construction loans with Boston Private on active projects, but has utilized them in the past and still has funds held with the bank. She said Dorchester Bay EDC does get annual unrestricted funding from Boston Private. In 2023, it received around $50,000.

“Boston Private has been a backbone of affordable housing development in our region,” said Lyle. “It’s a scary moment for us.”

There are several projects under construction in Greater Boston that were in part financed by SVB, including a 62-unit mixed-income development in Chelsea that utilized a $3 million construction loan from the bank.

Marc Draisen, executive director of the Metropolitan Area Planning Council, said the fallout for developers may turn out to be minimal. But even if that’s the case, the collapse is a warning to the industry to find more banks willing to aid affordable housing efforts.

“This is an important moment for us,” said Draisen. “We have a goal to build a lot more housing, to build more affordable housing. We need more lenders involved in the process so that when something like this happens, the viability of dozens of projects isn’t at risk.”

Andrew Brinker can be reached at andrew.brinker@globe.com. Follow him on Twitter at @andrewnbrinker.