Boston proposes $31.5M in tax deferrals to start four stalled projects

Boston is testing what a municipality will pay to move city-approved projects to a construction start, and the first answer is $31.5 million in tax abatements proposed by Mayor Michelle Wu, chief of housing Sheila Dillon, and chief of planning Kairos Shen. The four developments hold approvals but have not broken ground, carrying more than 1,400 units across Fulcrum Global Investors' One Mystic Avenue in Charlestown, Hines' 22-24 Pratt St. in Allston, Nordblom's 83 Leo Birmingham Parkway in Brighton, and Allston Yards Building D in Allston; Bisnow first reported the proposal.

No checks are written here. The abatements would let the developers temporarily defer property tax increases, subject to review by the Boston Planning Department and a period of public comment. The benefit to a sponsor sits in the timing of an assessment rather than the size of an equity check, which makes the instrument a fit for projects whose problem is the calendar more than the debt stack.

Officials picked developments with more than 100 units that include affordable housing and energy-efficient construction, producing 185 income-restricted units across the four. Spread over more than 1,400 units, the $31.5 million comes to roughly $22,500 a unit. Readiness was the other screen, and Banker & Tradesman, which noted that roughly 47 developments were earmarked for possible abatements, reported the four closest to breaking ground. Wu said in a statement that approved projects ready to build should not stay stalled in the current economic conditions, and construction on all four is expected to begin next year.

Hines is the name that ties the proposal to the wider trade, and its Pratt Street site is approved and unstarted, the posture this publication described in August when it reported Hines pivoting from buying to building into a market where new supply has frozen. That strategy needs approved sites to turn into starts, and a municipal abatement is one of the few levers a city holds to close the distance.

Boston hopes to support up to $100 million in abatements against a pool of roughly 47 earmarked projects, so the $31.5 million for four of them begins to price what the rest can expect. It is also a different instrument from the one Wu reached for in 2024, when she proposed $110 million to seed an accelerator fund providing low-cost financing to developers of approved multifamily projects; deferring a tax increase defers revenue, while a financing fund parts with it.

Whether the first four sign depends on the Planning Department review and the comment period, and construction on all four is expected next year. The reason they stalled remains: the constraint on the multifamily pipeline is financing, not demand. A tax deferral improves the carry on a project a lender has not yet agreed to fund at today's rate. If the four start, Boston learns how many of the other projects in the pool were waiting on the tax bill rather than the loan, and sponsors holding approved, unstarted sites elsewhere have a template for asking.