[This case study is an adaptation of a May 2023 assignment for “Solidarity Economy Movements”, a course in Tufts University’s Urban and Environmental Policy & Planning program. Credits to contributors Sarah Jane Huber and Eda Kosma. Also available to view as a Storymap: https://storymaps.arcgis.com/stories/a3d3c3785db240fb863bf66a89ecfc2f.]
In October 2022, the newly formed East Boston Neighborhood Trust (EBNT) acquired 36 multi-family buildings in East Boston to preserve 114 units for affordable housing. Celebrated as a significant win in the battle against gentrification and displacement, the Trust was also hailed for its innovative model. Through public and private financing, it raised more than $50 million to finance the purchase. In this case study, we explore how the groundwork for the EBNT was built by years of tenant organizing and grassroots resistance to gentrification. The EBNT is a real-world example of fight and build strategies: where we can both fight against our world as it is, and build worlds as we believe they should be.
The EBNT is the first Mixed Income Neighborhood Trust (MINT) in Massachusetts. Typically, MINT models contain a mix of housing options for different income levels. Higher-rent units help subsidize lower-rent units. MINTs raise capital from a variety of sources, but control of their housing is ultimately governed by a trust made up of community representatives. In East Boston, the opportunity to apply this model came about after almost a decade of fighting against real estate speculators, who had been buying up existing housing and raising rents to evict existing tenants. The community organizations that led the battles for housing justice were the same coalition who mobilized the City of Boston and other funders to buy back a significant set of speculator-owned buildings.
The History of “Eastie”
Once known as the ‘Ellis Island’ of Boston, East Boston has long been known for its diverse immigrant communities. Before colonization, the land we know today as East Boston was five islands used as traditional hunting lands by the Massachusett, Pawtucket, and Naumkeag tribes. After incorporation into Boston in the 1600s, the waterways and wetlands between the islands were filled in and the land became dominated by shipbuilding yards and other industries. By the late 1800s, the area had evolved into a destination for primarily Irish and Jewish immigrants, then waves of Italian immigrants decades later.
Today, the neighborhood, also known as “Eastie”, continues its legacy as a home to immigrants. According to the 2020 Census, nearly half of the residents in East Boston are foreign-born, the highest percentage in all of the City’s neighborhoods. Residents have largely emigrated from Central and South America countries – mostly El Salvador, Colombia, Mexico, the Dominican Republic, and Brazil – with smaller populations from Southeast Asia and Africa.
Displacement Pressures
East Boston is at the epicenter of gentrification and displacement pressure in Boston. The City’s Office of Housing found that in 2020, East Boston residents were at the highest risk of being displaced. Many new luxury developments have been built in recent years, incentivized by East Boston’s proximity to downtown. But such complexes have primarily served affluent young professionals, and residents have raised concerns about the low number of affordable units. So while average rents in East Boston have been more affordable than those in other neighborhoods, they have increased sharply in recent years. For example, the monthly median rent for a 2-bedroom apartment has skyrocketed from $1,600 to $3,000 in 2022 in less than ten years. Home prices have more than doubled since 2011. Meanwhile, longtime East Boston residents have not necessarily grown their ability to pay rent or buy a home. Incomes are historically lower in East Boston and wages have remained stagnant. In 2015, area median income in the neighborhood was 8% lower than in Greater Boston, a figure that holds today.
Funding the Acquisition
EBNT formally acquired what was called the “Blue Line Portfolio” for $47 million. The properties are scattered across the Eagle Hill, Jeffries Point, and Orient Heights neighborhoods of East Boston, with most as 3-, 4-, or 5-bedroom units.
Many organizations collaborated to establish the EBNT. The East Boston CDC (EBCDC) led on the real estate details, yet relied on City Life Vida Urbana (CLVU) and Trust Neighborhoods to fundraise and create the EBNT legal structure. This deal was the first time EBCDC had worked with a grassroots organization on a real estate transaction, though it did have a prior relationship with CLVU. The EBNT was also supported by private investors who provided over $8 million in support: the Boston Impact Initiative, the Hyams Foundation, the Boston Foundation, the Eastern Bank Foundation, and Kataly Foundation. The Barr Foundation also provided EBCDC with a grant for the acquisition. Finally, the Center for Economic Democracy was a critical convenor for fundraising
The table lists all the funding sources in the EBNT’s “capital stack”. The position of each layer indicates seniority; for example, as the EBNT earns income from rents, the first party it must pay back is Eastern Bank, who provided a $31.6 million mortgage. Like many affordable housing deals, the EBNT required a complex network of funders.
While the City of Boston provided $12 million from its Acquisition Opportunity Program (AOP), public subsidy alone was not enough to support the acquisition, even as a 0.0% interest loan. The Hyams Foundation’s $1 million and Boston Impact Initiative’s $500,000 subordinated loans are examples of private funding. CLVU even invested its own funds. It contributed $250,000 as a common equity investor. Its position, like other common equity investors, is most junior in the capital stack.
The Role of Community Organizing
Some place the beginning of the EBNT timeline at October 2021, when the Blue Line Portfolio first became available on the market from two real estate companies Hodara Real Estate and Grossman Companies. Yet, the beginning of the EBNT’s story starts with community resistance to displacement almost a decade earlier. In 2015, real estate companies were acquiring property in East Boston at alarming rates. Hodara Real Estate, for example, was buying as many as two to three properties a month. Upon successful purchase, it would issue quit notices to tenants in an attempt to vacate the buildings. By replacing lower-income tenants (often also immigrants) with higher-paying ones, it could grow its profits.
As explained by Jose Maria España, who said in 2015 his landlord raised his rent by 50%, “At this rate, in four years there won’t be any more Hispanics in East Boston. We’ll all be expatriated because of these rents. If we don’t stop this, we’ll be earning only to pay the rent, only to benefit the investors.”
Not all tenants accepted these terms. Ana Ramirez, upon learning that her rental property had been bought and that she might be evicted, sought support from CLVU. Other families also reported their concerns at CLVU’s weekly meetings. As a grassroots non-profit already steeped in organizing against gentrification in East Boston, CLVU swiftly crafted and systematized resistance to the Hodara Real Estate Group. Mere days after a property had been acquired by Hodara, CLVU held demonstrations outside the building, and other organizations like Project No One Leaves would offer legal assistance. Several of CLVU’s actions even involved marching through East Boston, stopping at multiple Hodara-owned properties to protest and rally greater community support. While negotiations with tenants never occurred, the Hodara Real Estate Group would back down from its quit notices, allowing some tenants to stay in place. Others, who were unsure of their housing stability, chose to find homes elsewhere.
In its organizing strategy, CLVU refers to direct action as “the sword”. This description certainly captures part of the fight for housing justice. Protests and rallies exert community power and pressure the opposition to change. But their larger campaigns also build power by facilitating relationships. As CLVU Co-Executive Director Mike Leyba, describes, for every tenant that stayed in place, there were many organizers, canvassers, translators, lawyers, and community members who came together in support. In fact, CLVU’s broader organizing is what connected it with EBCDC, the key relationship for the EBNT. When the EBCDC first considering making an offer for the Blue Line properties, it called Andres Del Castillo, CLVU’s East Boston organizer, to discuss the idea further. Together, they recognized the buildings were Hodara-owned. This history deepened their commitment to acquire the buildings for community benefit.
“We saw an opportunity to take property that has been weaponized against Latino residents in East Boston, and make it theirs again.” – Mike Leyba
“When we fight, we win” has become a common chant for 21st century social movements. CLVU’s marshals often use it for call and responses at their own actions. But as solidarity economy advocates like Kali Akuno have added, fighting is one part of combating injustice. Movements must build their own alternatives to take care of the needs of their communities. Within its other organizing pillars, CLVU already recognizes other possibilities: “the shield” (legal aid) and “the offer” (the demand that restores stability). This work largely happens within the existing legal system, but with the EBNT, something more transformative has perhaps emerged.
Exploring MINTs
To create and preserve affordable housing, community development organizations have primarily relied on low-income housing taxing credits and unit-by-unit acquisitions. EBCDC is not an exception. Established in the 1970s, EBCDC has grown its housing portfolio to over 700 units for low-income households, with 51 multi-family buildings coming in recent years. But such growth had its own challenges. Acquiring properties piecemeal was costly and arduous, especially for only a few units. Managing scattered site properties only added to these costs and logistical difficulties. So, EBCDC’s senior leadership was open to other approaches, especially those that could scale.
When the Blue Line Portfolio became available, it was clear this project needed to be financed differently. Low-income housing tax credits would take too long, as an initial offer was expected within a month after the properties were up for sale. Moreover, for CLVU, community control over these properties mattered, and without an active community land trust in the neighborhood, it needed another strategy.
Eventually, CLVU and EBCDC each arrived at the MINT model. Developed in 2019 by an organization called Trust Neighborhoods, MINTs have a range of housing where higher-rent units subsidize lower-rent units. Local communities are also given control in their formation and governance through a Trust Stewardship Committee (TSC). With the addition of a City deed restriction, the EBNT ensures that its units will be income-restricted into perpetuity.
Tanya Hahnel at EBCDC had heard about MINTs from the Blue Line Portfolio’s seller, and Mike Leyba happened to be in a fellowship cohort with Jason Dehaemers, Founder of Trust Neighborhoods. At the time, Trust Neighborhoods had already demonstrated how its model could be used in places like Tulsa, OK, and Kansas City, MO, but had yet to set up a MINT in a city with an expensive housing market like Boston. Over the months, the trio of organizations were enmeshed in conversations around structure, governance, funding, and community needs. Though tailored to East Boston’s local circumstances, the EBNT’s final structures, like its range of income-restricted units and its Trust Stewardship Committee, are like other MINTs.
Even in the final months of the deal, CLVU continued to expand on what MINTs could be. In August 2022, Leyba had a series of exchanges with Trust Neighborhoods about how to include an anti-displacement mandate in the Trust agreement. For too long, CLVU’s community members had been subject to eviction. The EBNT would not stabilize housing if it used the same tools of disruption and harm. Thus, a multi-pronged strategy was proposed.
- An anti-displacement mandate was added into the Trust Agreement so that it could be enforced over the lifetime of the project.
- The founding funders would also write a letter to the Trust Stewardship Committee detailing their belief that eviction should be a last resort, except in the case of threats to health and safety. The TSC/EBCDC should seek to minimize evictions under the anti-displacement mandate.
- After the formation of the EBNT, the TSC will create and pass a resolution that includes additional details about what programs to use before eviction, including Residential Assistance for Families in Transition (RAFT), emergency rental assistance, and other fall-back language in case specific programs did not exist.
Unlocking Funding Opportunities
$47 million was needed to acquire the Blue Line Portfolio. Even as EBCDC approached the City of Boston for public funding, it came millions of dollars short in its initial offer. As a developer and property manager, EBCDC was not necessarily the best equipped to fundraise. Instead, since CLVU and CED were movement organizations with ties to local foundations and impact investors, they became pivotal actors in unlocking additional capital.
For example, even though EBCDC had approached the Hyams Foundation in May 2022 about funding, Hyams chose not to participate at first. As a philanthropic organization, they were already making mission-related investments, but news of the Blue Line Portfolio had not come from their community movement partners. According to Hyams Executive Director Lisa Owens, later conversations with CLVU would address her doubts. She needed to know that the EBNT would help CLVU build power and that some units would be truly affordable, or 30-60% of the area median income (AMI) in East Boston. Leyba’s work with Trust Neighborhoods on the affordability ranges, along with CLVU’s own equity investment of $250,000, lent further legitimacy to the deal. Hyams eventually chose to invest.
Leyba also sits on the Investment Committee of the Boston Impact Initiative (BII), another supporter of this deal. The charitable loan fund, which invests in projects focused on economic and racial justice, had already been looking for investments in real estate as part of its second fund. But besides contributing $500,000 in subordinated debt, BII considers itself catalytic as a relationship-builder. Its CEO Betty Francisco worked with Leyba and CED’s Amrita Wassan to convene over 80 impact investors, foundation officers, and city officials to seek additional investment. BII would eventually share its due diligence to open the doors for other organizations, bringing in two foundations to support the EBNT with their own program-related investments.
BII’s approach stems from a philosophy of “right relationship” with community leaders. Trust, reciprocity, and respect must exist between parties. In a field where finance is often extractive, these beliefs require investors to give up power and endorse what communities need before thinking about their own returns. Admittedly, the ecosystem of impact investing in Boston is more mature than most cities. But that does not mean private investment was a given. The decades of housing rights organizing made CLVU an exceptional candidate for solidarity finance.
Even the public funding for the EBNT can be attributed to movement pressure. Leyba, City Councilor Kendra Lara, and representatives in the Boston Office of Housing Stability each cited how grassroots organizing helped establish and grow the City of Boston’s Acquisition Opportunity Program. Following the foreclosure crisis in the early 2010s, city officials had lauded their response. But as East Boston tenants and residents organized around gentrification and displacement, they successfully shifted the discourse. One housing crisis had replaced another. While nearly all HUD funds support the construction of new housing, current tenants needed a program that could preserve affordable housing. Piloted in 2017, the AOP has grown nearly ten-fold from its initial $7.5 million budget. Additionally, due to an organizing campaign led by the Center for Economic Democracy, Boston’s City Council has the power to amend the Mayor’s budget. Councilor Lara led the decision to direct ARPA funding into affordable housing, which provided $9 million of the total $12 million (75%) in public subsidy for the EBNT.
Thus, while it might be tempting to view the EBNT’s capital stack from a lens of hierarchy, it is far more interdependent. Ordinarily funded through bank loans and private investment, a MINT of this size needed public funding. But public funding alone was not enough either. Relationships brought a confluence of various public and private actors together to make the EBNT a reality.
A Seat at the Table: Governing Community-Controlled Real Estate
Besides its financial contribution, CLVU will support building the governance structure of EBNT. Currently, the EBNT’s five-member Trust Stewardship Committee will ensure that the Blue Line portfolio remains rooted in community needs. One tenant, and one representative from PUEBLO, CLVU, EBCDC, and East Boston Social Centers will act as trustees. Del Castillo is serving as CLVU’s representative and is actively shaping the democratic process, including how tenants will be elected into two additional seats, and how projects like community solar might be pursued. As a movement anchor on the TSC, the leadership of CLVU is trusted and looked towards. But it also believes it has a responsibility to build the leadership of TSC as its own body, for the day Del Castillo or CLVU may wish to step down from their trustee position.
The EBNT can also expand its current portfolio of permanently affordable housing, especially since the neighborhood does not have an active community land trust (CLT) already doing this. The TSC then, will be a vital body in driving future real estate deals. Currently in East Boston, CLVU has been running a campaign against a landlord, Del Fiore, who is trying to raise rents by 200% and threatening eviction. As CLVU has defended tenants in court, it learned that the landlord is interested in selling his properties altogether. The EBNT then, has the potential to become a powerful partner to CLVU’s “sword”, enhancing “the offer” far more than a rent negotiation might.
When the Blue Line Portfolio was purchased, there was a 100% occupancy rate. Since then, as EBCDC has begun the process of lease renewals, deleading, and renovating, only about 70% of tenants have renewed their leases. This turnover is likely because some tenants were students; this demographic tends to move more frequently because of their itinerant circumstances. Rental openings provide another opportunity for the TSC to match its intentions. With approximately 35 vacancies set for 2023, income-eligible families will be selected from a waitlist. Already, CLVU has conducted outreach to ensure that its community members sign up. Hodara Real Estate’s actions have already displaced former residents of EBNT properties, but other vulnerable households do not have to experience the same fate. Tenant selection will be an important process to evaluate to determine if the EBNT is fulfilling its purpose.
Key Reflections
Like most real estate transactions, the EBNT has now moved from acquisition to property management. Having secured a $36 million first mortgage, the East Boston CDC must now focus on renovations and renting units to start paying back the project’s debts. As Hahnel notes, the scattered-site management of 114 units will be work-intensive and require significant staffing. Still, even with these responsibilities, the EBNT can keep growing. It is currently exploring further acquisitions, albeit ones smaller than 114 units. And, as awareness of MINTs spreads across Boston (CLVU cited a meeting with Fenway CDC and Dorchester Bay EDC), others may be to create similar models in the city.
In addition to learning from the EBNT’s success, others can also learn from its limitations. In having equity investors, the EBNT still uses rents from low to moderate-income households to provide financial returns to investors. To avoid too great of a wealth transfer to people with capital, CLVU made sure the TSC would have the power to adjust rents. But the TSC will have to balance the tension between lower rent and promises for investor return.
Investors can also profit from exiting the project. After their fifteen-year investment, investors will be able to sell their equity for additional gain. Thankfully, EBCDC holds the right to purchase any shares first, so that investors do not sell their equity to misaligned parties. CLVU is currently exploring what voluntary agreements to cap investor returns might look like, to further protect the EBNT from pressures to maximize profits.
In forming the EBNT, years of movement work built key relationships, unlocked funding opportunities, and shaped a governance structure that can support community-controlled real estate for years to come. This victory, however, starts with tenants who had the courage to stay in place. Without them, the people power needed to support the EBNT acquisition would have never actualized. The fight to exercise one’s basic rights continues to be core to any transformative work.
Removing the threat of eviction and displacement is one matter, but the EBNT now has an opportunity to further solidarity. If governed thoughtfully, its Trust Stewardship Council has the ability to develop and empower resident leaders. Various initiatives like community gardens and renaming buildings after movement ancestors can become exercises in collective imagining and healing. Boston’s housing justice movement can grow from more than a place of resistance, as a place of possibility, a place of creation.
Endnotes
All sourced claims are hyper-linked unless otherwise listed below.
- Interview with Mike Leyba, City Life Vida Urbana.
- Interview with Tanya Hahnel, East Boston Community Development Corporation.
- Interview with Stephen Donovan, City of Boston Office of Housing Stability.
- Confluence Conference Recording. Panel with Jason Dehaemers, Betty Francisco, Tanya Hahnel, Kendra Lara, Mike Leyba, and Lisa Owens. Moderated by Deborah Frieze.
- Documents from Hyams Foundation, Trust Neighborhoods, and the Boston Impact Initiative.
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