Squeezed: Funders Grapple with Affordable Housing in a Pricey City

According to Citizens for Adequate Housing, Massachusetts’ housing wage (the minimum hourly wage needed to afford a two-bedroom apartment) is $24.08, which is 282 percent above the state’s minimum wage of $8.50 and well above the national average of $18.62.

Those numbers explain why the family shelters here are full. Over 4,500 families are part of the state’s shelter system, including more than 1,900 living in motels. A housing report published by the Boston Foundation (TBF) pointed to the demographic revolution happening in the city with an influx of millennials, baby boomers looking to downsize, and low- and middle-income families being priced out of their neighborhoods.

In short, as we've reported before, affordable housing is a huge issue in Boston, and quite a few local funders are paying attention. Whether philanthropy can ultimately do much to address this challenge is an open question—few issues are tougher for the sector—but there are several efforts underway in Boston to enable families to find stable homes, with some interesting elements. 


One of these efforts, called Home Funders, makes low-interest loans and grants to developers to increase the supply of affordable housing. Many of the Boston funders we’ve covered at IP are part of this effort, including the Boston Foundation, the Highland Street Foundation, the Lynch Foundation, and the Paul and Phyllis Fireman Charitable Foundation. A 38-page plan proposed by a special committee of the Massachusetts Senate suggested establishing “millennial villages” in the city so that 20- to 34-year-olds don’t take houses away from working families who have been here for generations.

In its most recent grant cycle, TBF awarded its largest grant ($500,000) in its neighborhoods and housing category to the Local Initiatives Support Corporation’s Boston chapter. This group does capacity building and lending to community development corporations on the local level.

Meanwhile, some grant money is going to policy and research, to help everyone wrap their heads around a problem with multiple drivers. For example, TBF recently awarded a $30,000 grant to the Harvard University Joint Center for Housing Studies to create a policy brief and interactive online map to demonstrate demographic and economic shifts in Boston neighborhoods over the last 25 years. On a similar note, TBF also just gave they Northeastern University-Dukakis Center for Urban and Regional Policy $75,000 to create a Greater Boston Housing Report Card and do research for the Commonwealth Housing Task Force.

Funders have also been giving attention to the intersection of housing and other pressing issues, such as health. TBF’s Health Starts at Home initiative, for example, aims to bridge gaps between health and housing services to address the negative health effects of a lack of stable and affordable housing on children. Some of the partnerships happening in Boston to this end might surprise you.

Related: In One City, an Effort to Address the Nexus Between Housing and Health Gains Momentum

Ultimately, though, as we said, it's a real question as to whether philanthropic dollars can have much impact on the housing crisis. At a basic level, declining affordability in Boston reflects the city's rising wealth and the number of people with money embracing an urban lifestyle. The same story is unfolding in many other cities, as a reduction in crime and a shift in tastes has drawn more people to metropolitan areas—even as the earnings of some professionals, in sectors like tech and finance, have exploded. 

Our own guess is that if funders in Boston want to make much of a dent in the affordable housing challenge they'll have to deploy far more capital than they've yet done. This is an issue where impact investing really makes a lot of sense, which is why the Home Funders initiative flagged above is so important. A key question going forward is one of scale.