In 1987, the Asian Community Development Corporation (ACDC) was awarded the development rights to half a site with an abandoned building and parking lot. This was the result of a request for proposals from the city of Boston to build 300 units of affordable housing and community facilities, the first new affordable housing in Chinatown in over 20 years. Due to financing constraints, the unit count was reduced to 88 from 120, and the parking was located on an adjacent surface lot instead of underground.
The new building makes a transition between a tall hospital on one side and three-story brick townhouses on the other. The community needed large apartments because 80-90% of the units in Chinatown have only one bedroom. Three- and four-bedroom townhouses surround a secure courtyard, which gives children a supervised play area and acknowledges the traditional Chinese courtyard house. One- and two-bedroom flats occupy the ten-story tower and two retail spaces are offices for dentists and physicians serving Chinatown. The exterior has panels of Exterior Insulated Finish System and brick to match the older buildings.
According to architect Lawrence K. Cheng, "The design and detailing responded to the complex finance and budgetary restraints without sacrificing the quality of the dwellings." Carol Lee, former executive director of ACDC remarked, "Oak Terrace brought out the best of creativity with very limited resources. Many in the community as well as the funders have been impressed by the quality of the design."