Massachusetts Housing Investment Corp. (MHIC) and the Conservation Law Foundation (CLF), co-founders of the Healthy Neighborhoods Equity Fund (HNEF), have announced the closing of HNEF I at $22.35 million.

The Healthy Neighborhood Equity Fund is making a $4.9 million investment in the Beverly Barnat development in Beverly, Mass. Being built adjacent to the Beverly Depot commuter rail station by Barnat Development, the project will feature 67 mixed-income housing units as well as ground-floor commercial space. The development is also being supported by Boston Private, the Federal Home Loan Bank of Boston, and MassHousing.
ICON Architecture The Healthy Neighborhood Equity Fund is making a $4.9 million investment in the Beverly Barnat development in Beverly, Mass. Being built adjacent to the Beverly Depot commuter rail station by Barnat Development, the project will feature 67 mixed-income housing units as well as ground-floor commercial space. The development is also being supported by Boston Private, the Federal Home Loan Bank of Boston, and MassHousing.

HNEF is a private equity fund created to finance transformative, transit-oriented (TOD) projects in Boston and gateway cities in Massachusetts. Launched in 2015, it invests in mixed-use, mixed-income real estate projects in neighborhoods that are in the early stages of transformational change. Projects must have strong potential to strengthen community and environmental health and promote regional equity while providing a reasonable rate of return for investors.

In addition to two developments in Boston, HNEF has closed investments on projects in Beverly, Braintree, and Chelsea for a total investment of $14.2 million. HNEF expects to close on another Boston project, bringing total investments to $17.7 million.

Funding for HNEF has come from a blend of public, major foundation, and private-sector funds. Institutional investors include the Boston Foundation, Boston Medical Center, The Kresge Foundation, Northern Trust Co., and the Robert Wood Johnson Foundation.

Significant funding was raised from Boston Private Bank, Brookline Bank, Cambridge Savings Bank, Citizens Bank, Eastern Bank, People’s United Bank, Santander Bank, TD Bank, and U.S. Bancorp Community Development Corp. Individual impact investors have also participated in the fund.

“This successful fund is a testament to the strong need for innovative financing for TOD projects, and the critical role that private equity, alongside public policy and public funding can play in building healthier communities,” said Joe Flatley, president and CEO of MHIC.

Joe Flatley
Tony Sahadeo Joe Flatley

The creation of HNEF was influenced by studies showing that safe and walkable neighborhoods with quality housing, transportation, healthy food choices, green space, and recreation have major, positive impacts on residents’ health. In Massachusetts, health outcomes—including life expectancy—vary sharply by neighborhood. Life expectancy differs by as many as 33 years between census tracts in Boston located only two miles apart on either side of the Longwood Medical Area and Boston Medical Center. HNEF is using this type of information to select neighborhoods and projects for investment.