Large-scale development has ground to a halt in Boston, and the city government is now offering tens of millions in tax breaks to try to get a series of big projects moving. But it remains to be seen whether the money will be enough to move the needle.

Mayor Michelle Wu's proposal to offer property tax abatements for market-rate housing developments totaling more than 1,400 units secured approval Thursday evening from the Boston Planning & Development Agency Board. The administration can now move forward on negotiations with developers over the abatements, which are estimated to total $31.5M in temporary tax relief.

Four projects were approved for the abatements:

• A 424-unit building from Fulcrum Global Investors at 1 Mystic Ave. in Charlestown.

• A 341-unit building from New England Development at the Allston Yards complex.

• A 333-unit building from Nordblom Co. at 83 Leo M. Birmingham Parkway in Brighton.

• A 316-unit building from Hines at 22-24 Pratt St. in Allston.

These projects, which Wu's administration proposed for the tax abatements last month, are serving as a pilot for the initiative, which it hopes to later expand. Another 10 to 12 developers have expressed interest, Reuben Kantor, a senior policy adviser for the Boston Planning Department, said at Thursday's meeting.

City officials say they targeted larger buildings because they have been the hardest to get underway. According to a Planning Department presentation, three 100-plus-unit projects per year have broken ground over each of the last four years, and zero projects with more than 300 units have started construction.

Officials say this is because developers can't make nearly the same return on investment on these buildings that they could in the past. And average returns are barely above the return an investor can get from the 10-year Treasury, which has risen above 5%, making it harder to raise equity for a project.

They attribute these shrinking returns to rising costs. While rents have risen 35% since 2015, that is outpaced by the 38% increase in construction costs and the 133% spike in mortgage interest payments, according to the presentation.

To receive the tax abatement, developers must start construction within the next 12 to 15 months. Taxes would remain at their current rate throughout the construction period, and after a project reaches completion — the point when a property's value jumps — the rise in taxes would be spread over a series of years.

The Wu administration said the city will ultimately experience no net revenue loss, as developers' tax payments would be delayed rather than forgiven.

That structure may not be enough to change the equation for many projects, which are having a hard time securing the construction financing needed to start the process.

Aeron Hodges, a principal at Stantec Architecture, said at a Bisnow event last month that she is working with three of the four development teams that are receiving this initial round of abatements. She asked them how much of a difference they would make, and the response was “pretty uncertain.”

“It helps on the operations down the road, but the immediate [financing] needs for putting the project in ground is still fundamentally challenging,” she said.

The Planning Department's Kantor acknowledged at the meeting that it is a “very modest tax relief offer” that won't work for every project, but he said he thinks it will allow these four to get off the ground.

Kantor said he and city Chief of Planning Kairos Shen talked to at least 40 developers, and many indicated they would need relief that was two to four times as much as being offered to make development pencil.

“That just wasn't on the table for us,” he said. “This is not an initiative to fix every pro forma. If you have a huge gap, the city is not coming in and fixing that problem for you. If you are close, if you are in that range where you just need a little bit of bump to get your investors in, that's where this comes to bear.”

The BPDA has posted a trove of information on each of these four projects, including applications from the development teams in which they detail how the tax abatements should make their project viable.

The Charlestown project proposed a five-year deferral period for its 227-unit rental component.

From the start of construction through the fifth year after completion, it would pay the preconstruction tax baseline plus 2.5% annual increases on those rental units. After the fifth year, taxes would return to their normal level based on the property's assessment. The project's 181 condo units and 3,500 SF of retail would also have that 2.5% increase during construction but would then return to normal levels as soon as they are completed.

The Fulcrum-led team said in its application to the city that this would be enough to close the financing gap created as the development environment has “changed dramatically” since it was proposed in 2020.

“Real estate taxes are among the largest recurring operating expenses for the rental component,” said the application, signed by Fulcrum CEO Scott Brown. “Without temporary tax relief during construction and the initial stabilization period, the project cannot support the capital required to commence construction on commercially reasonable terms.”

BPDA Board Member Matt O'Malley said at Thursday's meeting that he was an “enthusiastic yes” on the tax abatement proposals, adding that they will “hopefully be the impetus that they need.”

“You're seeing projects that have broad-based support being stalled out, and this is one way to help those projects,” he said.

“And let me be clear: Targeted tax relief is not a giveaway. It's an investment. It's precisely what we are doing and we should be doing right now because these are projects that unlock private capital. They create good-paying jobs. They help grow our housing stock, and they expand our tax base.”