In a significant move towards addressing the affordable housing crisis, the acquisition of Newton Gardens by a local developer is being hailed as a replicable model for expanding affordable housing options in the region.
As cities grapple with a mounting housing shortage, the cost of new construction remains prohibitively high.
Additionally, the replacement of aging buildings with new developments often leads to the displacement of long-standing community members.
By purchasing older apartment complexes, renovating them, and offering subsidized rents, developers can provide affordable housing more quickly and at a lower cost.
This approach not only conserves existing housing stock but also minimizes the turnover of residents, thereby fostering stability within communities.
The acquisition of Newton Gardens highlights an emerging strategy for preserving ‘naturally occurring affordable housing,’ which refers to older buildings that maintain lower rents due to their decreased market value.
Currently, rents at Newton Gardens range from $1,500 to $2,700—well below the citywide average of $2,950 for a two-bedroom apartment, according to Zillow.
When the property went up for sale, Gilbert Winn, chief executive of the development firm, recognized a unique opportunity.
He stated, “The city pretty quickly said, ‘This is an extremely important project to keep affordable.’”
The city expressed a sense of urgency, noting the long-term tenants who had called Newton Gardens home for decades.
“There’s a risk that a market-rate developer might come in, renovate, and significantly increase rents,” Winn added, underscoring the importance of the city’s support to prevent such displacement.
Winn noted that coordinating all necessary components for the acquisition posed a significant challenge.
While market-rate developers often have the financial backing to quickly acquire properties, affordable housing projects typically require years to align funding from various public and private sources.
In line with this objective, Boston’s Acquisition Opportunity Program provides crucial funding for nonprofits to purchase apartment buildings for the purpose of stabilizing rents for current tenants.
Despite concerns over the investment needed to maintain a building from the 1960s, Newton’s Affordable Housing Trust provided a significant $4 million in funding.
Mayor Ruthanne Fuller highlighted that the acquisition represents a proactive step toward providing immediate housing solutions.
“With existing housing, we avoid lengthy delays associated with new construction like siting, permitting, and financing,” she pointed out.
Winn also secured $6.6 million from the state’s housing office and an additional $5 million from MassHousing’s workforce housing initiative.
Moreover, funding from private investors will contribute to the project’s overall budget of approximately $44 million.
This cost translates to nearly $400,000 per unit, which is about $200,000 less than the estimated cost of building a similar-sized facility in Greater Boston.
As a result, the project enables Winn to maintain current rent levels, with turnover units resetting to lower, income-restricted rates.
These income levels will cater to two-person households earning between $39,700 and $141,592.
Considered as “workforce housing,” these units provide a valuable middle-ground for residents whose incomes exceed traditional affordable housing limits yet fall short of market-rate rents.
Winn emphasized this feature noting, “Workforce units are less expensive to subsidize than conventional affordable housing, which often requires deeper subsidies and can deter investors.”
The Newton Gardens initiative will necessitate approximately $140,000 in public subsidies per unit—only one-third of what would typically be necessary for ground-up affordable housing.
“This should serve as a demonstration project for high-market areas,” Winn concluded.
He expressed hope that with flexible public programs, it is possible to retain middle-income housing options in the current economic landscape.
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