Report on an Innovative Financial Model for Sustainable Urban Development in Massachusetts

An innovative public-private financial initiative in Massachusetts has been launched to address the regional housing shortage, directly contributing to the United Nations’ Sustainable Development Goals (SDGs), particularly SDG 11 (Sustainable Cities and Communities). This report details the development of the Momentum Equity Fund, a pioneering financial instrument designed to accelerate the production of affordable and mixed-income housing.

Project Framework and Alignment with Global Goals

The project was conceptualized to apply advanced development finance principles to public sector challenges, aligning with a global agenda for sustainable and equitable development. The primary objective was to create a financial tool that supports inclusive and resilient urban growth.

Strategic Objectives and SDG Integration

• SDG 11: Sustainable Cities and Communities: The core mission is to advance Target 11.1, which aims to ensure access for all to adequate, safe, and affordable housing and basic services.
• SDG 10: Reduced Inequalities: By focusing on mixed-income housing, the initiative seeks to reduce social and economic segregation within communities.
• SDG 17: Partnerships for the Goals: The project exemplifies a multi-stakeholder partnership, leveraging expertise from academia, public agencies, and international finance to achieve common goals.

Development of the Momentum Equity Fund

The research and development of the Momentum Equity Fund were undertaken by Samya Mishra, a Harvard MPA graduate, through a Rappaport Public Finance Fellowship with the Massachusetts Housing Finance Agency (MassHousing). The fellowship facilitated the application of international financial expertise to a local government challenge.

Fund Mechanics and SDG Alignment

1. Innovative Financing Model: The $50 million Momentum Fund is the first state revolving fund in the nation designed to support mixed-income housing. It utilizes blended financing strategies, combining public and private capital to de-risk investments and stimulate development. This directly supports the financial implementation mechanisms outlined in the SDGs.
2. Public-Private Collaboration: The fund was created under the Affordable Homes Act and is managed through MassHousing’s Bringing Innovation to Lending and Development (BILD) program. This collaboration between the Rappaport Institute at Harvard, MassHousing, and financial experts is a model for SDG 17, demonstrating how partnerships can drive sustainable innovation.
3. Targeted Impact: The fund is specifically designed to overcome financial barriers that impede the construction of housing for diverse income levels, thereby creating more inclusive and sustainable communities as envisioned by SDG 11.

Initial Outcomes and Contribution to Sustainable Communities

The Momentum Equity Fund has moved from policy brief to active deployment, committing capital to its first set of projects. These initial investments serve as tangible progress toward achieving local and global sustainability targets.

Funded Projects

• East Milton
• Allston
• Grafton

The approval of these mixed-income and affordable housing developments demonstrates the fund’s immediate impact on increasing the housing supply. By fostering the creation of integrated communities, this initiative not only addresses a critical infrastructure need but also contributes to the broader goals of poverty reduction (SDG 1) and reduced inequalities (SDG 10).

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 11: Sustainable Cities and Communities

  This is the most central SDG addressed. The article focuses on tackling the “growing housing shortage in Massachusetts” by creating “mixed-income housing” and “affordable housing.” This directly contributes to making cities and human settlements inclusive, safe, resilient, and sustainable.

• SDG 1: No Poverty

  The provision of affordable housing is a critical component of poverty reduction strategies. By financing “affordable housing deals,” the initiative described in the article helps ensure that lower-income individuals and families have access to a fundamental basic service, which is essential for economic stability and moving out of poverty.

• SDG 10: Reduced Inequalities

  The article highlights the creation of “mixed-income housing.” This approach aims to reduce social and economic segregation within communities by ensuring that people from different income levels can live in the same areas. This promotes social inclusion and directly addresses inequalities in access to adequate housing.

• SDG 17: Partnerships for the Goals

  The article exemplifies this goal by detailing a collaboration to achieve housing objectives. The Momentum Fund is described as an “innovative public-private financial commitment” and a result of a partnership between a state agency (MassHousing), a university (Harvard’s Rappaport Institute), and the use of private sector financing strategies (“blended financing”).

2. What specific targets under those SDGs can be identified based on the article’s content?

1. Target 11.1: Ensure access for all to adequate, safe and affordable housing.

   The entire initiative is built around this target. The article states that the Momentum Equity Fund is a “state revolving fund to support mixed-income housing production, created under the Affordable Homes Act.” Its purpose is to directly address the “housing shortage” by financing “affordable housing deals.”

2. Target 1.4: Ensure that all men and women, in particular the poor and the vulnerable, have equal rights to economic resources, as well as access to basic services.

   The project provides access to financial services for the development of affordable housing, which is a critical basic service. By creating financing mechanisms for “affordable housing,” the initiative helps vulnerable populations gain access to property and economic stability.

3. Target 10.2: Empower and promote the social, economic and political inclusion of all.

   The focus on “mixed-income housing” directly supports this target. This model of development is designed to prevent the formation of economically segregated neighborhoods, thereby promoting social inclusion and reducing the inequalities that arise from housing disparities.

4. Target 17.17: Encourage and promote effective public, public-private and civil society partnerships.

   The article provides a clear example of this target in action. The Momentum Fund was developed through a “Rappaport Public Finance Fellowship” and involved a collaboration between MassHousing (a state agency) and a researcher from Harvard, utilizing “blended financing strategies” that merge public and private sector approaches. The article calls it an “innovative public-private financial commitment.”

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Amount of financial resources mobilized for affordable housing:

  The article explicitly states the creation of the “$50 million Momentum Fund.” This figure serves as a direct quantitative indicator of the financial commitment made through the public-private partnership to support affordable and mixed-income housing.

• Number of housing projects financed:

  The article mentions that capital has been committed to “three of the initially proposed mixed-income and affordable housing deals in East Milton, Allston and, most recently, in Grafton.” The number of projects or deals approved is a clear output indicator for measuring the fund’s activity and progress.

• Establishment of new public-private partnerships:

  The creation of the “Momentum Equity Fund” itself, described as the “first-in-the-nation state revolving fund” of its kind, serves as an indicator of a new and innovative partnership model being successfully established to address a public policy challenge.

4. Create a table with three columns titled ‘SDGs, Targets and Indicators” to present the findings from analyzing the article.

Source: hks.harvard.edu