Money from sale of GE complex to fund new housing projects
What would you do with a $100 million windfall?
Well, if you’re Governor Charlie Baker, you put most of that bonanza toward affordable housing.
Baker on Tuesday unveiled a plan to devote $86 million to housing construction for middle-income earners, including $60 million for homeownership projects. This money, which will be doled out through the quasi-public MassHousing agency, could help pay for an estimated 500 homes for sale and another 260 rental apartments.
The money comes from General Electric’s sale in May of its future headquarters site in Fort Point, amid the company’s seemingly relentless downsizing. The administration had helped subsidize the project, to lure GE here from Connecticut three years ago, and was owed some of the proceeds from the sale as a result.
Alexandria Real Estate Equities and National Development won the GE site with a surprisingly high bid of $252 million. Yes, the South Boston Waterfront is hot right now. But few observers expected a price that steep for the 2.7-acre site — a property that includes two brick buildings that will be occupied by GE later this year, as well as space and permits for a 12-story tower.
The GE sale reimbursed the state for $87 million that it had already invested in the project, plus another $11 million in profit. What to do with it all? Unsurprisingly, it didn’t take long for ideas to get floated on Beacon Hill. Senator Adam Hinds wanted it to go toward the cleanup of the Housatonic River, to address the pollution left behind by GE in Hinds’s hometown of Pittsfield. Senator Eric Lesser, meanwhile, wanted the cash to go to vocational schools, and spelled out that request in legislation.
Baker solicited ideas from his top aides. One intriguing concept surfaced during Baker’s recent meeting with the Black and Latino Legislative Caucus, in his State House offices last month. There, he heard from Representatives Russell Holmes of Mattapan and Carlos Gonzalez of Springfield about the need for more homeownership opportunities.
The state had pretty much ended the business of subsidizing homeownership construction during the Great Recession. Holmes and Gonzalez say minority neighborhoods are being left behind, widening the state’s income inequality gap, because it’s tough for their constituents to break into this heated housing market.
The idea resonated with the governor. Baker has made housing a big priority, and his administration has been touring the state, promoting legislation to reduce the local voting threshold for many zoning changes. (Ask him about those Housing Choice Palooza T-shirts.) Plus, he wanted a quick way to deploy the GE funds. MassHousing’s Workforce Housing Initiative seemed like the perfect vehicle to do so.
The program launched in 2016 with $100 million, and about $27 million remains in the pot. But it has largely been focused on rental projects. One of two exceptions: a portion of the Olmsted Green housing development in Mattapan, at the former Boston State Hospital site. There, MassHousing subsidized 11 two-bedroom townhomes for buyers who earn less than the area’s median income and another 11 for people who make less than 80 percent of the median. Those homes sold last year for $237,500 and $213,000, respectively. Roughly 500 people applied for the chance to buy one.
The administration picked Olmsted Green as a backdrop for its press conference, a feel-good break from the unhappy flow of headlines coming from problems at the MBTA and the Registry of Motor Vehicles. Among those on hand to celebrate on this sunny day: Holmes and Gonzalez, from the minority caucus.
(Red Line riders, don’t fret: The state Democratic Party won’t let the Republican governor forget his T woes, and brought about 10 stoic-faced protesters to hold signs outside Baker’s tent.)
MassHousing executive director Chrystal Kornegay says she is already hearing from developers who want in, just hours after the news broke. She hopes the agency can start accepting applications this fall; the agency is considering giving priority to Boston neighborhoods and Gateway Cities.
You may have noticed that Baker still has another $12 million to spend from the GE sale. The administration has a plan for that, too — something workforce-related — though nothing has been announced yet.