Boston could be the first city east of the Mississippi River to pioneer a model that allows a trust of organizations to develop, own, and operate multifamily buildings, and preserve them for affordable housing.

City Councilors Gigi Coletta and Kendra Lara asked the Boston City Council to allocate $1 million in federal pandemic relief funds toward East Boston Community Development Corporation’s effort to acquire a group of 114 units of housing in East Boston and keep them affordable.

“We thought that [American Rescue Plan Act] funds would actually be a perfect fit to make sure that we're removing these 114 units off of the speculative market and investing in stabilizing housing,” said Lara in an interview. Coletta, a fourth generation East Boston resident, said those units going back on the speculative market could “completely uproot the fabric” of the neighborhood.

The units are in 36 mostly triple-decker buildings called the Blue Line Portfolio, and would be owned by a new entity: the East Boston Neighborhood Trust. It would be a community-governed institution, itself a new model called a Mixed-Income Neighborhood Trust, pioneered by nonprofit Trust Neighborhoods of Kansas City, Missouri. The group has been consulting with East Boston CDC and housing advocacy group City Life/Vida Urbana on the project since January pro bono.

The new model's process is different than your typical community development corporation buying a property, as it involves an entire trust of neighborhood organizations buying, owning and operating the space. The Mixed-Income Neighborhood Trust model was developed by Trust Neighborhoods in 2019 as a new tool for housing development.

“I think it's innovative. I think it's bold. I think it's creative,” said Coletta, adding that she thinks it will “stabilize the community” after destabilization by real estate developers.

The Mixed-Income Neighborhood Trust strays from the usual method of financing new developments, looking instead to preserve existing units in neighborhoods already facing rent growth and displacement, according to David Kemper, CEO of Trust Neighborhoods. He said the model is at work in Tulsa, Oklahoma, and Kansas City, Missouri.

“In both of those situations and in our proposed East Boston Trust, we have renters and residents of the neighborhood in governance [governing] and on the boards that make decisions about how we're operating the trust, what the rental rates are, who people rent to, things like that,” he said.

The Blue Line Portfolio would be the largest single acquisition of family units in East Boston’s history, and the first owned by a MINT in Massachusetts.

“In this case, the ownership will be a trust [that's] not just looking at making a financial return. They're actually looking at preserving these in the long run for families,” said Tanya Hahnel, project manager at East Boston CDC, which is spearheading the effort.

Unlike new apartments springing up across the neighborhood, which mostly have studio and one-bedroom apartments, these particular units have between two and five bedrooms and are scattered throughout East Boston’s neighborhoods. The 114 units are currently occupied with many college students and young professionals renting single rooms, but have a 40% annual turnover rate.

Advocates said the goal would be to make sure families occupy those units in the future.

Sixty percent of the units will be affordable for those earning 60% of area median income or below, and of those, 25% will be for households earning less than 50%, including some 30% area median income households, according to East Boston CDC.

Hahnel said the mixed-income model, even with rents capped, will allow higher-priced apartments to subsidize lower-rent ones.

“Some of the units can be rented for, you know, $2,400 for a two-bedroom. Then some can’t be rented for more than $1,350 for a two-bedroom,” she said, providing an example. “Here you're going to have a locally controlled trust that's looking to actually utilize the cross-subsidization to help ensure that the low-income units and middle-income units remain affordable.”

The other 40% of households will be income restricted but at higher-area median incomes. “These are considered the 'middle-income' or 'workforce housing' units which are helping to support the lower-income units,” said Hahnel.

Mike Leyba, co-executive director of City Life/Vida Urbana, said the proposal is about creating permanent affordability in East Boston. “This shows a lot of promise in terms of marrying the intention around community ownership, stewardship and control, with being able to raise the kind of resources that you need in order to be able to acquire and hold on to these buildings long-term,” he said.

Lara, who chairs the council’s Committee on Housing and Community Development, and Coletta said they've been talking to advocayes about how this could boost affordable housing in East Boston. East Boston CDC and Trust Neighborhoods have to come up with $5 million for a down payment on the approximately $53 million portfolio by the end of August.

They’re hoping the council approves the $1 million in federal pandemic relief funding, which would be sent to the City of Boston Neighborhood Housing Trust, then dispersed to East Boston Neighborhood Trust. The groups have $2.9 million in commitments so far from investors and philanthropic foundations.

The need for below-market rent housing is evident in East Boston where longtime resident families are being priced out as luxury condos spring up. Home values here soared 227% since 2011 — higher than any other Boston neighborhood. The affordable housing stock is low, making up only 14% of units in the area.