Cambridge Trust has committed $110 million over ten years to a loan pool to help finance construction of affordable housing in Massachusetts, the Boston Globe reports.

The commitment in support of the Massachusetts Housing Partnership will help developers finance the construction of affordable multifamily housing. MHP estimates the bank's contribution could help finance fourteen hundred rental apartments over the next decade. MHP relies on a state-mandated "tax" on bank acquisitions: Whenever a bank is sold, the acquiring institution is required to contribute the equivalent of just under 1 percent of the acquired bank's assets in Massachusetts to MHP's multifamily housing loan pool. Cambridge Trust, whose parent company acquired Wellesley Bancorp, Inc., however, had received a credit for prior affordable housing work that offset the requirement and is pledging $110 million voluntarily.

MHP executive director Clark Ziegler told the Boston Globe that while housing production in the state has picked up in recent years, it has not been enough to make a dent in the cost of rent. "What's happening with home prices and rents is just proof that whatever point we are at in production, it's not dialing things down," he said. "It's not having the impacts on rents and prices that we want to see to stay competitive, just to keep people here."

While Cambridge Trust CEO Denis Sheahan sits on the MHP board, Ziegler said he was not directly involved in the arrangement between the bank and MHP. "The bank has capital that they really want to deploy," said Ziegler. "[This program] was a great opportunity for them to get more money on the street that was impactful and meaningful."

"We saw an opportunity to make a commitment and we jumped on it," said Cambridge Trust executive vice president Tom Fontaine. "The prices are just out of control [in Greater Boston]. The land has so much value, and affordability becomes an issue."

(Photo credit: Massachusetts Housing Partnership)