In attempt to stem displacement, city will set value of housing vouchers by ZIP code

Said the city’s housing chief, Sheila Dillon (above): “We want [residents] to live where they want to live, but we’re also hoping they live throughout Boston, and that we see income-integrated neighborhoods. And we want to see rents in all our neighborhoods stabilized.”Jonathan Wiggs/Globe Staff/File 2016/Globe Staff

For more than 85 tenants who call the Mercantile Wharf building home, the future looked dire. The owner of the historic North End building announced they could opt out of a subsidized-housing program, which would allow the landlord to get more than double the rent at market rate — and effectively forcing the low and moderate income residents to move.

“You have a bunch of people who are going to fall through the cracks,” said Sandi Padellaro, president of the Mercantile Wharf Tenants Association. “Everybody in the building was worried sick about it.”

In a booming housing market, it’s the very story line of displacement taking hold in neighborhoods across the city. But a seemingly small change in the Boston Housing Authority’s program for subsidized housing vouchers could help tenants in the Mercantile keep up with the new rents. Boston will be the first housing authority in the country to voluntarily join the Small Area Fair Market Rents system, which allows the authority to strategically set rents for housing vouchers by ZIP code.

Currently, the housing authority uses the same flat rate ($1,563 for a one bedroom) for roughly 13,000 vouchers, known as Section 8, across what is called Metropolitan Boston, regardless of the market rate of that particular neighborhood.

That meant the vouchers had limited value in higher-cost neighborhoods like Beacon Hill and the Seaport. Meanwhile, residents with vouchers have historically been concentrated to lower-rent neighborhoods such as Mattapan, Roxbury, and Dorchester.

“We want [residents] to live where they want to live, but we’re also hoping they live throughout Boston,” said the city’s housing chief, Sheila Dillon, “and that we see income-integrated neighborhoods. And we want to see rents in all our neighborhoods stabilized.”

The new system means the voucher rates have jumped in certain neighborhoods — for instance, a one bedroom would be $2,630 in Charlestown, an increase of $1,067. The new rate is $2,700 in the West End, a difference of $1,137.

In other neighborhoods, the rate has dropped, to $1,540 in parts of Dorchester and Roxbury, a difference of $23. The new rates also apply to communities within the Greater Boston market, such as Melrose, where they dropped $33.

The change could go into effect July 1, following a 45-day public comment period.

Bill McGonagle, the head of the Boston Housing Authority, said the system will help prevent displacement while carrying out the original intent of the federal subsidized housing program: To provide affordable housing for disadvantaged residents and desegregate them from historically deprived communities.

“What this is, is an ambitious effort to provide our voucher families with real choices of where they can live and raise their families,” he said.

Though the US Department of Housing and Urban Development had offered ways for Boston to opt into the new system before, the city balked because it had little wiggle room to properly adjust rates under past funding formulas.

But, McGonagle said, the housing authority successfully petitioned the federal government to raise the standard rate for Greater Boston by roughly 22 percent, bringing the rate closer to market in many city neighborhoods. But that also meant that the new standard rate was higher than it needed to be in some neighborhoods, such as Mattapan and Roxbury, and officials feared that would inflate the market for those neighborhoods, affecting other residents.

The new system, McGonagle said, allows the Boston Housing Authority to strategically set the fair market rate by ZIP code, increasing — and also decreasing — the standard rate when appropriate.

“Now, it’s up to the Boston Housing Authority to put the rents where they believe the market is,” Dillon said. “Not one size fits all.”

The housing authority oversees roughly 13,000 vouchers, and expects to receive funding for an additional 1,000 by next year, though thousands of residents remain on a waiting list.

In the program, residents are expected to contribute roughly 30 percent of their total income toward rent. Under certain conditions, a qualifying resident who receives a Boston Housing Authority voucher can live anywhere in the Greater Boston market — and can return to the city, as well, with the new market value of the voucher.

Mike Kane, director of the Mass Alliance of HUD Tenants, who advocates for affordable housing and to organize tenants, praised the new system, saying it can help residents stay in their homes or relocate to preferable neighborhoods where they may work or attend school.

“It’s a pretty revolutionary idea for Boston,” he said. “Even if you had a Section 8 voucher over the last couple of years, it was really difficult to find a place in the city. This will change that.”

Padellaro, of the Mercantile tenants’ group, said she simply hopes it will let residents stay where they’ve lived, in some cases for decades.

“We have people who grew up in the North End neighborhood — this has been their home their whole lives,” she said.