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Healey Commits $50M To Launch 'First-Of-Its-Kind' Green Bank For Affordable Housing Projects

Gov. Maura Healey launched a new green housing fund Tuesday as part of her efforts to address the state's housing crisis and meet its climate goals.

The Massachusetts Community Climate Bank is starting with $50M in seed funding provided by the state's Department of Environmental Protection, and it is expected to attract investment from both the private and federal sectors, according to a press release.

Gov. Maura Healey in March after she addressed the business community at the Greater Boston Chamber of Commerce's Governor Affairs Forum.

The bank will be a part of the state's affordable housing investment and banking arm, MassHousing. Healey touted it as the first green bank dedicated to affordable housing in the country. 

“This first-of-its-kind initiative is going to make our state more competitive, affordable, and equitable – and it’s going to show that in Massachusetts, we can lead the world by leading with our values and leaving no community behind,” Healey said in a statement.

The bank is designed to provide low-cost capital to bring more clean energy and efficient technologies into projects that create and preserve affordable housing. It will lend directly to affordable housing owners, using "innovative finance products" to help decarbonize their buildings. 

It is intended to help offload the cost burdens for low-to-moderate-income residents who pay disproportionately high shares of their income to keep the lights on and can't afford to retrofit their properties. 

When the bank is established, it will allow the state to compete for federal funding from the Inflation Reduction Act and from programs like the National Clean Investment Fund and the Clean Communities Investment Accelerator, according to the press release. The state will also look to federal financing options like the Department of Energy Loan Program Office.

"We have great confidence that MassHousing can expand and deploy these funds effectively so more low- and moderate-income families can benefit from living in energy-efficient homes," Aaron Gornstein, CEO of the nonprofit Preservation of Affordable Housing, said in the release. "This new Green Bank, along with forthcoming federal funds from the Inflation Reduction Act, will have an unprecedented impact on the sustainability of our housing stock in every region of the state.”  

The bank will be a significant part of the state's Clean Energy and Climate Plan, which calls for a 49% reduction in greenhouse gas emissions from residential heating by 2030 and a 95% drop by 2050.

In her first six months as governor, Healey has pushed for more affordable housing creation amid the state's worsening housing crisis.

Last month, the administration announced $246M in subsidies and tax credits to build and preserve 1,600 affordable and mixed-income units across the commonwealth. Federal housing tax credits will be used for 27 projects in 20 towns and cities.

In March, Healey filed Article 87 legislation to create the Executive Office of Housing and Livable Communities, a cabinet agency dedicated to affordable housing production through more housing production. Former Worcester City Manager Ed Augustus Jr. became secretary of the agency on June 1.

Cities like Boston have set their own climate goals that could be boosted through the bank.

In April, Boston Mayor Michelle Wu announced that she would earmark $10M to help affordable multifamily buildings become more energy-efficient, the Boston Globe reported.

“This work is critical and will complement our efforts in Boston to retrofit our housing stock and create opportunities for small property owners to build and renovate greener, healthier buildings for residents to thrive,” Wu said in a statement Tuesday about the Community Climate Bank.