TomOfBoston
Senior Member
- Joined
- Mar 29, 2007
- Messages
- 1,222
- Reaction score
- 443
That would be an understatement!
ACC/NU Residence Hall | 840 Columbus Ave | Northeastern University
- Thread starter reverend_paco
- Start date
I bet the City doesn't want to loose the tax revenue too!
More seriously, that block needs real commercial and res development with ground floor activation to reknit that area together and to support the locals in all the affordable housing.
More seriously, that block needs real commercial and res development with ground floor activation to reknit that area together and to support the locals in all the affordable housing.
People can't be unhappy about both the height of the building and also all of the college students in local apartment buildings. The whole point of this dorm is to get NEU out of its last remaining ~800 leased property bedspaces. And quite honestly, you can't do that unless you find another 800 bedspaces somewhere. This building has to be this tall to do just that. Otherwise, those leased property bedspaces stay in the hands of college students instead of community members for quite a few more years until NEU gets started on its next residential development in the Ryder Lot (?)
MozartFan0418
New member
- Joined
- Sep 19, 2020
- Messages
- 26
- Reaction score
- 32
I 100% agree with you. I was just pointing out what I have noticed when watching the task fore meetings.
Blackbird
Senior Member
- Joined
- Feb 2, 2014
- Messages
- 1,168
- Reaction score
- 1,660
These dorms tend to be really expensive, though. Even if there were a spot on campus for every student, you’d still find people looking for cheaper rents off campus.
I think a key selling point on this for NEU would be to show the number of students already living in Roxbury. It shows up in census data and indicates there's a lot of demand yet to satisfy. You're absolutely correct that we have to figure out how to get dorm living cheaper, too.
dshoost88
Senior Member
- Joined
- Apr 14, 2008
- Messages
- 2,158
- Reaction score
- 2,510
We have figured it out. It's even a concentration at all of the area universities: Economics.
The cost for university students to live in on-campus residence halls does not exist in a vacuum. People in a Boston college community contribute to the same demand curve as people in the overall Boston community and Greater Boston community that need housing. And until the supply of housing units regionally, in the city, and on-campus catches up with the demand, the price to live in these places will be higher.
To Northeastern's credit (and other area universities as well), they've made a noteworthy increase to the supply of beds on campus. Unfortunately, the supply of beds still falls short of the demand. Northeastern continues to have a wait list year-after-year of students wishing to live on campus. As noted by others, this was compounded by the pandemic and decision to safely house students according to public health recommendations (i.e. no more studio triples or 5+ student-housing situations).
840 Columbus Ave will help address that supply gap, for sure. But as long as Companies E, F, G, H, I, J, K, L, and M continue to hire/move tens of thousands of jobs to Boston year-after-year, developers in the City and Region will need to continue to add tens of thousands of housing units year-after-year as well. Failing to do so will exacerbate the affordability problems inherent across all types of housing stock.
Thanks, I spend a lot of my time actually trying to get the city to permit more housing and well understand this.
University dorms aren't the open market, however --- the universities aren't supposed to be profit maximizing actors (though they frequently act like them) and the rents they charge at dorms are, to some degree, arbitrary. Dorm living has gotten a lot more expensive nationwide as universities add amenities, to draw students, to meet higher expectations, to cater to a wealthier group, etc. There's no reason they cannot offer cheaper accommodations or subsidize their housing more. Ultimately, if you want to get all of the students into on campus housing, you'll need cheaper dorms, too.
University dorms aren't the open market, however --- the universities aren't supposed to be profit maximizing actors (though they frequently act like them) and the rents they charge at dorms are, to some degree, arbitrary. Dorm living has gotten a lot more expensive nationwide as universities add amenities, to draw students, to meet higher expectations, to cater to a wealthier group, etc. There's no reason they cannot offer cheaper accommodations or subsidize their housing more. Ultimately, if you want to get all of the students into on campus housing, you'll need cheaper dorms, too.
dshoost88
Senior Member
- Joined
- Apr 14, 2008
- Messages
- 2,158
- Reaction score
- 2,510
But there ARE reasons universities cannot offer cheaper accommodations or subsidize their housing more. Chief among them is their financing. Most of the on-campus housing stock at Northeastern, Colleges of the Fenway, and UMass Boston (among others) have been constructed in the last 20 years. Even if the schools have large endowments or deep pockets, they’re still using financial mechanisms like construction loans, mortgages, and other credit options to construct these residences because their missions are to maximize their academic and research endeavors.
If a developer builds a pro forma for a residential tower full of 4-beds in the city, the operating income may vary depending on the users but the costs to build the place will be similar. And in this city—the one where city councilors mandate union labor, minority-owned business participation quotas, women-owned business quotas, local material sourcing, and millions of dollars toward new on-site public amenities with every new development—it’s very apparent that residence hall construction isn’t cheap. Add to that the other associated costs—subsidizing the rent for residence assistants (free) on every floor of residence halls, heightened cleaning staff expenses due to sterility standards in these places, university-imposed LEED standards that raise the initial costs of the building to use premium materials, and associated security detail at these residence halls and university wide for more students on campus—it becomes clearer why offering cheaper housing to students on-campus isn’t an easily implementable policy.
TallIsGood
Active Member
- Joined
- May 30, 2006
- Messages
- 519
- Reaction score
- 116
So governmental policy and regulation, although well intentioned, has a cost and drives up the cost of housing. Also, it artificially limits housing by inflating the cost of some above the marginal profit and reducing height and limiting construction of others. So I agree we need more housing. I wish government, while getting better the last decade, was more of a help here.
I was pretty surprised to learn that Northeastern apparently has 24/7 security in all the dorms like it's a luxury apartment. Just that can't be cheap.
Suffolk 83
Senior Member
- Joined
- Nov 14, 2007
- Messages
- 2,976
- Reaction score
- 2,319
All I hear is excuses. Universities are very profitable and are run like corporations now. They need to house their students adequately instead of pushing the burden to the city, or they should lose their tax exempt status. Its really that simple
dshoost88
Senior Member
- Joined
- Apr 14, 2008
- Messages
- 2,158
- Reaction score
- 2,510
There's a lot of irony here.
For starters, do you read the news? Universities around the country are faced with making cuts or closing completely in light of the COVID-19 pandemic... not exactly the predicament corporations are facing per trends on Wall Street.
Secondly, leased property residence halls are not tax exempt. So while residence halls like West Village and International Village are tax exempt, leased residence halls like East Village and Lightview are not. Lightview Residence Hall--American Campus Communities' 825-bed residence hall on university-owned land--pays $1.1M+ in property taxes: you can look at the Tax Assessors' Website if you don't believe me. East Village pays $865k. Copied screenshot below for Lightview's FY 2021 tax assessment. A $1,158,658 tax bill translates to a cost of $1,404 per bed. Assume 25 of those 825 beds go to RA's (i.e. no payment), that becomes $1,448 tax rate per bed for FY 2021.
Why does this matter, and what does this have to do with 840 Columbus Avenue? American Campus Communities is the proponent for both developments; the financing structure will be probably be similar for 840 as it was for Lightview; and it's a certainty that the 840 Columbus residence hall will be taxed the same way the Assessor's Office estimated taxes for Lightview. The taxes in this case are passed along to the resident (i.e. students) to pay. It's another factor that contributes to cost, and it only goes away if the university assumes ownership and all liability of AAC's development. It's not an excuse for why on-campus housing is expensive, and it's not independently a justification... it's a fact and, therefore, a contributing factor to consider. If universities and academia become become taxed with no exemption, the expense will be passed along to students; the expense will impact the quality/caliber of higher education the institutions can afford if fewer people can afford that cost increase; and students will face another setback in accessing affordable education. Quality higher education and affordable housing for all are possible, but they are complicated issues to accomplish with many variables to consider.
Not excuses.
MozartFan0418
New member
- Joined
- Sep 19, 2020
- Messages
- 26
- Reaction score
- 32
I think this is why we are starting to see universities work with private companies in order to build more housing. Northeastern already has lightview. NEU owns the land but is operated by ACC. This cuts out the building cost and other expenses @dshoost88 mentioned. I am sure we will see other universities follow this path
Suffolk 83
Senior Member
- Joined
- Nov 14, 2007
- Messages
- 2,976
- Reaction score
- 2,319
Lol at all of that.... Youre the guy arguing against $15 minimum wage arent ya?
dshoost88
Senior Member
- Joined
- Apr 14, 2008
- Messages
- 2,158
- Reaction score
- 2,510
... No. I'm a supporter of $15 minimum wage and indexing it with inflation. I'm a supporter of free public higher education for all, and free trades education for all--especially in STEM fields. I'm a proponent of adding value to our built environment, as long as it's not at the expense of our quality of life. I'm a proponent of funding (and defunding) all areas of our government equitably. I'm the wonk who comprehensively reads through the data and research before it's widely consumed and reported on so that I can make objective determinations about facts rather than communicate subjectivity and noise.
I'd recommend you guys write up a pro-forma for a new dorm building that would be accepted by a board and see how it works out.
Also, they aren't entirely sitting on that land and not paying anything. The City of Boston runs the PILOT (Payment in Lieu of Tax) program:
On Boston's tax-exempt properties, it received $34,390,529 in cash and $52,911,627 in community benefits in 2020.
Northeastern's benefits report, the money spent directly on improving the City of Boston, essentially a tax write-off, totaled $6,033,527. They also paid $1.9 million in cash.
Also, they aren't entirely sitting on that land and not paying anything. The City of Boston runs the PILOT (Payment in Lieu of Tax) program:
On Boston's tax-exempt properties, it received $34,390,529 in cash and $52,911,627 in community benefits in 2020.
Northeastern's benefits report, the money spent directly on improving the City of Boston, essentially a tax write-off, totaled $6,033,527. They also paid $1.9 million in cash.
All I'll say here is that the traditional economics of building do not apply directly to dorms:
- They get an immense amount of zoning relief (there's no way you could build the lightview as market rate housing on that block) including IDP
- Their owners pay no taxes (PILOT aims at covering a fraction of what property taxes would be and Northeastern doesn't even fully pay that)
- Universities sit on large endowments which enable borrowing on better terms
- Universities exist over longer time horizons than a developer trying to make a profit. That allows them to smooth income and borrowing.
- Universities charge immense amounts in tuition; it's odd to argue that the amount they charge for housing somehow must cover the cost of construction.
It may well be that contracting out the development of dorms is a losing proposition for some of the reasons listed above, but it's very clear that it is *not* the same as typical housing development.
Perhaps as a further note, even in YIMBY-topia, the ability of students to split multi-unit apartments to save money vs dorms will be a problem if the dorms are expensive. This problem isn't going away any time soon.
- They get an immense amount of zoning relief (there's no way you could build the lightview as market rate housing on that block) including IDP
- Their owners pay no taxes (PILOT aims at covering a fraction of what property taxes would be and Northeastern doesn't even fully pay that)
- Universities sit on large endowments which enable borrowing on better terms
- Universities exist over longer time horizons than a developer trying to make a profit. That allows them to smooth income and borrowing.
- Universities charge immense amounts in tuition; it's odd to argue that the amount they charge for housing somehow must cover the cost of construction.
It may well be that contracting out the development of dorms is a losing proposition for some of the reasons listed above, but it's very clear that it is *not* the same as typical housing development.
Perhaps as a further note, even in YIMBY-topia, the ability of students to split multi-unit apartments to save money vs dorms will be a problem if the dorms are expensive. This problem isn't going away any time soon.
^ Dorms are a RE investment product like any other and it is different than multifamily, a specialty of sorts. I dont blame schools for shopping this out. While their endowments might have RE investments, with a few notable exceptions, most schools are not geared to RE development and are risk and capital investment adverse. By partnering with private developers schools get what they need, housing for students and goodwill with the city, manage their short to mid-term risk/capital outlays and long-term cash-in as ground leases expire.
Schools are also facing a gradual but deep drop in enrollment in the coming years as a result of age demographics. In the past few years, most schools in the area have been reporting record enrollments, but universities, the smart ones and the cash-strapped ones, are forecasting and planning around a peak in the next 0-3 years in the northeast region. Harvard and MIT won't see any drops really, but the next tier, Northeastern, BU, etc., is likely looking at it closely. Planning wise, you have to figure out how to best house the most students you've ever seen, but not hold a surplus of units and their associated debt going forward.