Affordable housing investment in Allston clicks for Google

September 29, 2011|By Casey Ross, Globe Staff

The Charlesview is being rebuilt on the former Brighton Mills Shopping… (Pat Greenhouse/Globe Staff )

When most people hear the name Google, they think Internet searches, not affordable housing.

But in Allston, the search-engine giant is investing $28 million to help construct 240 units at the Charlesview residences, one of the largest low-income housing developments in the country.

On its face, the investment seems strange because it puts Google Inc., typically focused on the virtual world, in a corner of the affordable housing business dominated by big banks and investment companies.

However, Google and other companies know something that others don’t: Rental and low-income housing projects are now among the most lucrative investments available, with businesses from Apple Inc. to Sherwin-Williams Co. buying millions in government tax credits used to finance affordable homes in Massachusetts and other states. These companies use the credits to significantly reduce their tax bills, while builders get desperately needed funds to provide affordable housing to low- and middle-income families.

In its most recent fiscal year, MassHousing, the state’s affordable housing bank, helped provide financing for a record $446 million in rental-housing deals, due in large part to renewed interest among private companies and other investors. That’s up from just $89 million in the 2009 budget year, when the economic downturn dried up funding for such projects.

“A lot of these nontraditional investors have said, ‘Wait a second, this is a good deal,’ ’’ said Greg Judge, chief operating officer of Boston Financial Investment Management, which specializes in low-income housing investments. “It’s affordable housing, so it makes them feel good, has a great investment track record, and it’s one of the best deals around right now.’’

An executive with Google said the technology company was attracted to affordable housing in part because the projects seldom encounter financial difficulties and almost never result in a default.

“We want to be responsible corporate citizens, and that’s what drove us to invest, but the returns are also quite good considering the risk,’’ said Axel Martinez, an assistant treasurer for Google. “Charlesview is one of the places where we were able to add value, when in the past projects like that wouldn’t have gotten done.’’

The Charlesview project, expected to employ hundreds of laborers over the next two years, involves the relocation and expansion of a 213-unit affordable housing complex on Western Avenue that was built in the 1970s and has fallen into disrepair.