Boston's housing problem

If 15% is "designated affordable housing" that's effectively rent control on 15% of the units. Therefore, the owner will charge more for the market rate units, widening the gap between "affordable" and "market rate" even further.

Unintended consequences are a bitch.
 
Wouldn't 'market rate' be what the market will bear, regardless of the number of affordable units?
 
Matthew said:
If 15% is "designated affordable housing" that's effectively rent control on 15% of the units. Therefore, the owner will charge more for the market rate units, widening the gap between "affordable" and "market rate" even further.

Unintended consequences are a bitch.
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They will charge more for the other units but those units would never be in the range of what's "affordable." Plus, the loss of 15% in market value is spread over the 85% remaining. The market now has some affordable housing with a slightly higher market rate as opposed to no affordable housing with a market rate that only a few can afford.
 
KentXie said:
I support rent control in some cases and I see its benefits. There was a story about London during the Olympics where landowners, for the few weeks that the Olympics were in town, raised the price from $800/week to $2250/week. This was done so that landowners can evict long-term residents and rent out the apartments to short-term residents (visitors). As you know, London does not have rent control and the permanent residents had no leverage whatsoever. In most cases, they had to look elsewhere to live.
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Um, that's what a lease is for. You lock in a rate for a year. You must be talking about people paying week-by-week or month-by-month.

Update from the link you just posted:
Furthermore, many people's contracts are "roll on" agreements that continue on from month to month without a fixed end date. In those cases landlords can raise the rent at any time with one month's notice. Additionally, there are no limits or regulations on how much a landlord can increase rent.
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as I suspected.

KentXie said:
But this isn't a rent control and while affordable housing isn't a separating thing from housing per se, just increasing supply wouldn't necessitate reasonable price.

As I stated many times, landowners will not, and I repeat, WILL NOT lower the price under a certain threshold. Most of the time it that threshold would be just at a loss. Meaning a condo that was built at a cost of $600,000 would never be sold at anything less than probably $400,000. Instead, the owner would sit on it as investment until someone buys it or sells it to another investor who would do the same.
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It is rent control. You are setting the price. It only applies to "15% of units" so it's not as big a problem as rent control, but it still drives up prices on the other units.

And it's true that people will not lower the price under a certain threshold. So there's two ways that can be fixed. You can lower the threshold by making it easier to build housing in Boston. Or, you can wait for people to run themselves out of business by over extending themselves through speculation.

People are not going to continue to build luxury condos/rentals if they do not sell.

We also need to find a way to encourage smaller footprint development, and include a large variety of owners in the market. Currently, it's so difficult to navigate the politics of building here, that only a few heavy hitters pursue it. They naturally shoot for the big mega-projects for economies of scale. But this is a deadly trend for the city. Big superblock projects are how we almost killed the city in the 70s. There's no room for innovation or flexibility with the big developments. The "15% so-called affordable housing" requirement is like begging for scraps and only feeds the problem.

It should come as no surprise that the most successful examples of traditional urbanity come from small blocks with a diverse collection of repurpose-able buildings with mixed uses. Sometime in the last century, we forgot how to build that, and need to relearn it.
 
Matthew said:
Um, that's what a lease is for. You lock in a rate for a year. You must be talking about people paying week-by-week or month-by-month.
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I posted the link after you started writing this so you wouldn't know but the article stated that while they did lease it, they were required to sign a contract that states they have to move out for the period of July and August, otherwise no deal.

Update to include your update. Not all cases are because of the monthly planned payments.

As he drew up his contract, though, the real estate agent was adamant about one thing: if they weren’t out by July 15 – just 12 days before the opening ceremonies -- their rent would jump from 660 pounds ($1,020) per week to a "penalty" rate of 3,000 pounds ($4,635) per week.
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Matthew said:
It is rent control. You are setting the price. It only applies to "15% of units" so it's not as big a problem as rent control, but it still drives up prices on the other units.

And it's true that people will not lower the price under a certain threshold. So there's two ways that can be fixed. You can lower the threshold by making it easier to build housing in Boston. Or, you can wait for people to run themselves out of business by over extending themselves through speculation.

People are not going to continue to build luxury condos/rentals if they do not sell.

We also need to find a way to encourage smaller footprint development, and include a large variety of owners in the market. Currently, it's so difficult to navigate the politics of building here, that only a few heavy hitters pursue it. They naturally shoot for the big mega-projects for economies of scale. But this is a deadly trend for the city. Big superblock projects are how we almost killed the city in the 70s. There's no room for innovation or flexibility with the big developments. The "15% so-called affordable housing" requirement is like begging for scraps and only feeds the problem.

It should come as no surprise that the most successful examples of traditional urbanity come from small blocks with a diverse collection of repurpose-able buildings with mixed uses. Sometime in the last century, we forgot how to build that, and need to relearn it.
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I agree with you. The best solution is to build less luxurious condos and more low cost apartments. Fact is, most people don't need large condos and developers can make up the lost profit by splitting up 1 large condo unit into smaller apartments. For example, divide up a $600,000 condo into 4 smaller apartments and the cost would be $150,000 each. Developers don't need to build a pool or an indoor gym into every apartment structure. While the price will drop because they lose two amenities, they can partially make up for it by replacing it with more housing units. They should drop the 15% requirement if more developers commit to building cheaper and smaller apartments.
 
Matthew said:
If 15% is "designated affordable housing" that's effectively rent control on 15% of the units. Therefore, the owner will charge more for the market rate units, widening the gap between "affordable" and "market rate" even further.

Unintended consequences are a bitch.
Click to expand...

Yes, it widens the gap between "affordable" and "market rate" unless the developers are allowed more density. And in Boston, the affordable units allow more density (build more affordable and you can build more market units - it's set as a percent of the development, not a gross # of units).

And people throw around affordable vs market rate as if the middle class is getting squeezed out. That's not the case. Most of these affordable units are available to middle and upper-middle class renters/buyers. I've got a friend that lives in an "affordable unit" in Tent City. He's an attorney.
 
I'm not privy to the minutiae of London rental laws. But this whole Olympics fiasco seems to further demonstrate the dangers of a catastrophic influx of money. The Olympics: an itinerant urban renewal disaster.

Even under normal circumstances, the feeble vacancy rate also threatens the leverage of tenants against badly behaving landlords. Which is another reason why it's important to allow development of more housing on urban land, with a wider variety of owners involved: competition.

The "15% so-called affordable housing" designation works against this. If there is no middle ground, then the middle class can only afford 15% of the new units developed. That's not enough. It's nice that they're available, but being restricted to 15% of the pool -- because the other 85% are out of reach -- is ultimately squashing the competition that is necessary to keep things sane.

I'm not saying that the whole "overbuilding luxury condo" phenomenon is not a problem. It is. But I don't think the "X% affordable housing" set-aside works in the long run. It's more complicated than that. For example, here's another problem with it: landlords will know the tenants who are in the affordable apartments, and they can "afford" to treat the tenants like dirt, knowing that they have little recourse. One way to resolve that might be to offer rent assistance in a way that more specifically suits a person's needs, but also protects their privacy. Of course that is not a perfect solution either. Nothing is. Which is why ultimately the best defense is to make it easier for newcomers to enter the market, and to discourage monopolizing behavior by big development firms with mega-projects. Of course, that is at odds with dirty politics... :(
 
I'd be careful about using London during the Olympics as an example of anything more than what happens in London during the Olympics. Housing studies generally link cost and land use regulation, not speculation (although that's an interesting theory) or once in a generation 4 week sporting events.
 
This is statewide but a good initiative. Faster permitting and rewards state fund for multifamily developments. 10k per year across the state. Good framework, hopefully it works.

INITIATIVES DESIGNED TO INCREASE HOUSING IN MASSACHUSETTS OUTLINED, SETS STATEWIDE GOAL OF 10,000 NEW MULTI-FAMILY UNITS PER YEAR

WORCESTER – Tuesday, November 13, 2012 – Committed to creating new housing that is vital to maintaining Massachusetts’ young, well-educated base of talent, Governor Patrick today outlined initiatives designed to produce 10,000 multi-family units of housing per year, the first production goal of this kind set by any state in the country.

“Access to housing for our middle- and moderate-income families is an important component in the Commonwealth’s continued growth to retain and build our young and innovative workforce,” said Governor Patrick. “By working to strengthen and expand our current initiatives and through greater collaboration with organizations and agencies across the Commonwealth, we aim to produce 10,000 multi-family housing units annually. This will further support our state’s continued growth and economic competitiveness for generations to come.”

At “Under One Roof,” the Commonwealth’s first Housing and Community Development Conference in more than a decade, Governor Patrick detailed the new Compact Neighborhoods program, designed to encourage and create well-planned housing that fulfills the demand for homes near jobs, transit and the vitality of city and town centers.

Compact Neighborhoods complement smart-growth programs by providing incentives to encourage residential development near transit and town centers. The program will recognize communities planning ahead systematically for economic and housing growth, and will offer Chapter 40B relief and priority consideration in discretionary funding programs, such as the MassWorks Infrastructure Program.

Also today, Lieutenant Governor Timothy Murray discussed the Administration’s commitment to preserving and strengthening affordable housing for residents, particularly veterans. The Lieutenant Governor, who chairs both the Interagency Council on Housing and Homelessness and the Governor's Advisory Council on Veterans' Services, noted a 21 percent decline in the number of homeless veterans over the last year, with the goal of lowering the number of homeless veterans (currently approximately 1,270) by 1,000 by 2015. The Lieutenant Governor also discussed the Administration’s reforms of the emergency assistance program, which is designed to increase investments in preventing homelessness and expanding permanent housing solutions while still providing a strong safety net for those who need immediate emergency housing.

"We are working strategically with our partners in the public and private sector to deliver more affordable housing solutions for individuals and families across the Commonwealth," said Lieutenant Governor Timothy Murray. "By setting targeted goals, we will work together to ensure resources are used effectively and efficiently to support housing resources and community development."

Increasing market-rate housing for families and individuals is part of the Patrick-Murray Administration’s comprehensive plan for improving housing at all levels. Along with creating new housing, the Administration has made significant investments in the Commonwealth’s public housing stock, by preserving and improving the 46,000 housing units in the system through increased capital funding, increased operating subsidies, and changes in management of those resources.

“Setting concrete goals is a major step forward that reinforces the strong connection between housing supply and economic prosperity in Massachusetts,” said Clark Ziegler, Executive Director of the Massachusetts Housing Partnership. “We strongly support the Governor’s goal and we hope the state’s business and civic leadership embrace it.”

Compact Neighborhoods joins a number of existing programs that are being expanded or re-funded in an effort to expand available options for cities and towns and help meet the goal of 10,000 new housing units per year. The goal figure was set after collaborating with the Metropolitan Area Planning Council and the Kitty and Michael Dukakis Center for Urban and Regional Policy at Northeastern University.

This includes the Chapter 40R tool, which similarly to Compact Neighborhoods promotes smart-growth districts. Last month, Reading officials opened a mixed-use project in the downtown area that was supported by Chapter 40R funding, which was replenished by $4 million dedicated to the program in the jobs bill signed by Governor Patrick in August.

Also expanded in the jobs bill is the Chapter 43D program, which will support prompt and predictable residential permitting. Some communities, like Groton, have used Chapter 43D to support housing production that provides a variety of housing types for residents.

Last month, Governor Patrick announced the first Housing Development Incentive Program (HDIP) district, in Pittsfield. Specifically designed for Gateway Cities, the HDIP program is a development tool for increased residential growth and expanded diversity of housing stock. The program offers incentives to developers through a local-option real estate tax exemption and a state tax credit for 10 percent of eligible costs, up to $1 million.

The “Under One Roof” conference is a full-day, statewide event focused on housing issues across a broad range of issues, including emergency housing assistance, the Commonwealth’s public housing program that is one of the strongest in the nation and the plans to grow the state’s housing stock. Approximately 1,000 people attended the conference, which included sessions hosted by prominent state, non-profit and private-development housing leaders.
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Pittsfield is a gateway city? Gateway to what?
 
In 2009, the Legislature officially defined Gateway Cities in state law as any city with a population greater than 35,000 but less than 250,000, a median household income and a per capita income below the statewide average, and a rate of educational attainment of a bachelor’s degree or higher that is below the state average.
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Source
 
"Gateway City" basically is intended to identify cities with large populations of new immigrants. Gateway to the country/state as opposed to "gateway neighborhoods" designated for their physical location (i.e. the fenway)
 
How has Massachusetts done toward this goal during the past 20 years?

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In the immortal words of John Bender, Not Even Close, Bud.
 
^ Absolutely abysmal figures for Suffolk County, what a goddamn shame. The state should step in and overrule some of the ridiculous regulations Boston has. Abolish parking minimum in all of Suffolk County for starters.
 
There is certainly enough demand for the housing. There needs to be an effort to push residential density, and the associated commercial uses that it brings with it (services, restaurants, retail) in areas that can support it. Cities like Lowell, Lawrence, and Brockton that are turning corners. But also in transit hubs. The state should provide the TOWNS, not the developers with incentives for greater density.
 
Other areas that could really help the Boston metro are the Woburns and Needhams, that pretty much all have McMansion zoning laws. A lot of damage has already been done, but a little density could still be added here and there increasing supply by a nice chunk.
 
I really wish we had a leader that would push transit, and not just commuter rail expansion to the exurbs. Somerville with Assembly Sq. is exhibit A. Somerville also is talking about upzoning Union Sq. for the GLX.

If you want to encourage people to live in more dense, amenity filled areas. For families to have 1 car instead of 2, you need to have robust transit.
People don't make housing decisions without factoring in transit (although the people the drive to Boston from NH and complain about parking and gas prices can go fly a kite), so why should gov't policy be so silo'd.

The state should say to Lynn, you approve 3000k units (or whatever the area can conceivably support, i'm not familiar) then the state will give $x for the BLX and lobby the hell out of feds for more.
Boston, put more in Roslindale and here comes the Orange Line.

Everett, Chelsea, same thing! People need transit and transit needs people, why not link them.

I was in Worcester recently, I hope more trains going faster on uprated tracks sparks a residential renaissance there, because it needs it.
 
Trouble is, the same people who oppose more housing units also tend to oppose transit. "It'll bring the undesirables!!11" they say. So the political battle is the same.

The big test will be Somerville and the GLX. That is a close enough inner suburb that rapid transit can make a big difference.

Also I agree with BostonUrbEx: first thing they should do is simply render all minimum parking requirements invalid. I'm not sure how this can be achieved, if it can simply be a state law, or needs other lifting. It's just a kind of deregulation.
 
Rent control is just me telling you that you (and not other citizens) have to give to the charity of my choice - at the end of a gun barrel. If there is a public good in making low cost housing available, why should this or that property owner bear the cost of providing it? Would you support affordable housing measures if you had to bear the cost directly for the next 25 years? I don't mean spreading it out over the state. I mean taking on the same costs that developers and other tenants bear. As they say, when you rob Peter to pay Paul, Paul is always on your side. We could also say that everyone not named Peter is on your side.

In recent years, big housing developments have been coming off 25 year rent control agreements, and politicians have been squealing like pigs. In that case, the government helped finance the project, in exchange for 25 years of 'affordable housing.' So now that the landlord has fulfilled his part of the bargain, politicians want to turn the development into a charity. Sorry, but I support the ability of such landlords to turn people out into the streets. That was the deal. And that's what the politicians knew would be the result the day they signed the papers. If there is a social good in keeping those tenants in those apartments, then the taxpayer should be required to subsidize them - not the landlord. But of course, politicians don't care about those people that much.
 
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