Copley Place Expansion and Tower | Back Bay

[Rover]

I think in the discussion of the Copley tower's affect on affordable housing in Boston or any luxury tower downtown for that matter what's missing is the tax revenue component. The city gets the $$$ to redo the Charlestown and Southie housing projects not from the feds but from developers building and selling the units in these new towers. Sure, it would be nice if Murph and Sully from Dorchester were moving in, but whether its wealthy Asian investors, Eurotrash trust fund brats, or Martians buying the units, as long as its generating property taxes, who cares? Delay these projects needlessly and you're starving the city of much needed funding to go and build the affordable units we all think are needed. Its all connected.

 

[617]

I think in the discussion of the Copley tower's affect on affordable housing in Boston or any luxury tower downtown for that matter what's missing is the tax revenue component. The city gets the $$$ to redo the Charlestown and Southie housing projects not from the feds but from developers building and selling the units in these new towers. Sure, it would be nice if Murph and Sully from Dorchester were moving in, but whether its wealthy Asian investors, Eurotrash trust fund brats, or Martians buying the units, as long as its generating property taxes, who cares? Delay these projects needlessly and you're starving the city of much needed funding to go and build the affordable units we all think are needed. Its all connected.

I agree in theory with your property tax argument except that ctown and southie projects $$$ are coming entirely from private developers, in return they get double/triple density with market rate units. Now current residents don't want the much needed upgrade because of traffic and other nimbyism...another example of blocking development and constricing supply so that now apartments in these same areas are very expensive.

 

[Rover]

I agree in theory with your property tax argument except that ctown and southie projects $$$ are coming entirely from private developers, in return they get double/triple density with market rate units. Now current residents don't want the much needed upgrade because of traffic and other nimbyism...another example of blocking development and constricing supply so that now apartments in these same areas are very expensive.

Yes correct on those specific projects. Shouldn't have mixed that up. My larger point which I think you got was the city needs the funds to either build/maintain not just affordable housing, but to also keep up a certain standard of living.

Often in the Glob I'll argue with NIMBY's who want to shut down all building for awhile (read: forever) for Boston to assimilate all the new people. My take is if you do that, eventually the expenses that grow faster than inflation (health care for example) will eventually keep eating up more and more of the budget, either leading to cuts in things like schools, police, parks, etc or tax hikes which will continue to drive out the middle class. In order to maintain what has become one of the top big cities in the countries by almost all measures, the city needs the revenue from continued growth - both businesses and residents. Issues such as transportation while certainly important are in many ways outside of Boston's control. Many other things aren't though, and its going to take property tax revenue to keep the engine running.

 

[stellarfun]

Not trying to take this thread even more off on a tangent than it already is, but several data points on three deckers.

A very detailed analysis on the economics of buying and owning a three decker in Worcester (from last decade, but updated).
http://www.wbjournal.com/article/20...nging-the-market-for-these-multi-family-homes
_____________________________________
pdf p. 28 of the Housing Report Card shows that the sale of three deckers in the five county Greater Boston area has not recovered since the Great Recession and sales are half of what they were in 2005.

https://www.tbf.org/~/media/TBFOrg/Files/Reports/2016 Housing Report Card.pdf
^^^ The Greater Boston Housing Report Card 2016

 

[JumboBuc]

Not trying to take this thread even more off on a tangent than it already is, but several data points on three deckers.

A very detailed analysis on the economics of buying and owning a three decker in Worcester (from last decade, but updated).
http://www.wbjournal.com/article/20...nging-the-market-for-these-multi-family-homes
_____________________________________
pdf p. 28 of the Housing Report Card shows that the sale of three deckers in the five county Greater Boston area has not recovered since the Great Recession and sales are half of what they were in 2005.

https://www.tbf.org/~/media/TBFOrg/Files/Reports/2016 Housing Report Card.pdf
^^^ The Greater Boston Housing Report Card 2016

Sorry... what's your point here? I'm not trying to be a jerk, I honestly don't know what you're trying to show.

But regardless, a few points:

• Volume of sales of triple deckers is a stupid metric. If you want a read on the housing market, look at price. And besides that, triple deckers sales volume is a biased measure because in-demand triple deckers get broken up into condos. Even if the sale of triple decker units remained constant, we'd see a decrease in whole-triple decker sales over time thanks to condo conversions. And the overall quality of the triple decker housing stock should decrease over time as the best units get selected out of the sample.
• The "Five-County Greater Boston area" is really broad. Properties in Boston Proper are close substitutes to properties in the near suburbs (think: 128 belt and in), but once you get out into Essex, Plymouth, and outer Middlesex counties you're no longer in the same housing market.

If your point is that not all of Massachusetts is as hot as urban Boston, then, well, yeah. You're right. But how is that germane to a discussion of urban Boston's housing dynamics?

 

[FenwayResident]

Somerville is the exception, not the rule.
http://realestate.boston.com/buying/2015/10/29/yikes-the-latest-home-and-condo-prices-in-somerville/

For those too young to remember, the Great Recession was brought about in large part by creating false demand. A demand created to prop up housing prices and sustain a housing market built on upward movement in prices (and supposed affordability).

The sub-prime mortgage market was shut down, demand evaporated, and the propped out pricing collapsed. Homeowners found themselves underwater, and walked away.

Eight years out from the Great Recession, about 20 percent of the homes in Las Vegas were still underwater.
https://www.reviewjournal.com/busin...ownership-in-las-vegas-dips-below-20-percent/

The big difference between Greater Boston and other cities (including Las Vegas) is jobs. Boston has a lot of 'em, and they're often high-paying. As long as Boston sustains its healthy job market, housing demand will continue to go up.

Think about it another way: there have been thousands upon thousands of professionals coming into Boston making good money, and they all want a place to live. The housing stock has not increased proportionally, so these people with money are suddenly competing in a market that doesn't have enough supply. The price is not being artificially propped up by financial gimmicks; it's simple supply and demand.

 

[fattony]

pdf p. 28 of the Housing Report Card shows that the sale of three deckers in the five county Greater Boston area has not recovered since the Great Recession and sales are half of what they were in 2005.

https://www.tbf.org/~/media/TBFOrg/Files/Reports/2016 Housing Report Card.pdf
^^^ The Greater Boston Housing Report Card 2016

Get to pg. 52 and you see that prices have fully recovered. Prices are up and volume is down. Sounds like a high-demand, low-supply market to me.

And that is for 5 counties (come on), not just T-accessible neighborhoods. Boston and the T-accessible inner cities have seen home prices increase 50% in the past 10 years. You know this, so why are you searching for irrelevant counterpoints?

 

[Rover]

I'm not in the mind reading game myself but if stellar's point is that somehow the Boston metro area's housing is below the levels of 10+ years ago that doesn't pass the smell test. Aren't there like 400K more people in Mass since 2005, and I'm sure they're almost all in the metro area.

 

[atlantaden]

The big difference between Greater Boston and other cities (including Las Vegas) is jobs. Boston has a lot of 'em, and they're often high-paying. As long as Boston sustains its healthy job market, housing demand will continue to go up.

The biggest difference between Boston (I'll throw in NY/San Francisco) and most southern/western cities like Vegas, Atlanta, Dallas, Austin, Orlando, etc. is the availability of buildable, easily accessable LAND! Certainly jobs is a factor but without available land (and in metro Boston, the available land has so many restrictions on it from each individual town which exacerbates the problem), housing availability will always fall short with an increasing population. And prices will remain high and rise accordingly.

 

[bakgwailo]

Just as an anecdote - condos (2 family/3 decker) conversions in Dot by me are going easily for 500k+ a floor - in fact the top floor of a two family just sold (in almost no time) for 699k a block away, and it was a pretty bad construction grade gut reno (fake hardwood, granite, etc). Last time I tried to go after a three decker, I got into a bidding war on a few years ago in Rozzie (on Belgrade, abutted the CR tracks) and bowed out to developer when we were getting into the 800k+ range, when each unit probably needed another 50k to make it livable, and probably 100k per floor to convert from rentals to condos. One next store was just going on the market as condos at 400-500k+ a floor. New construction condos are maybe 100k-150k over that (at least where I have kept looking/kept up at). You can still kind some deals close to Blue Hill Ave across Dot/Rox/Mattapan, but even those I have noticed are getting condo converted.

I guess what I am saying is that I try to keep my eyes open for reasonable deals on rentals, and at this point 3 deckers in most neighborhoods are solidly in the realm of developers (with cash offers) flipping them into condos, which is hard to compete with when one just wants to hold them and do rentals (or owner occupy).

 

[FenwayResident]

The biggest difference between Boston (I'll throw in NY/San Francisco) and most southern/western cities like Vegas, Atlanta, Dallas, Austin, Orlando, etc. is the availability of buildable, easily accessable LAND! Certainly jobs is a factor but without available land (and in metro Boston, the available land has so many restrictions on it from each individual town which exacerbates the problem), housing availability will always fall short with an increasing population. And prices will remain high and rise accordingly.

Land (or a lack of it) doesn't matter if no one wants to live there; it's a secondary effect compared to employment. If all the tech companies in the Bay Area suddenly moved to Chicago, the housing prices in SF would plummet.

Also, for reference, NYC has a greater land area than quite a few Tier 2 US cities (Austin, Denver, New Orleans to name a few) yet housing prices in NYC are 5-20x more per square foot.

 

[curcuas]

The biggest difference between Boston (I'll throw in NY/San Francisco) and most southern/western cities like Vegas, Atlanta, Dallas, Austin, Orlando, etc. is the availability of buildable, easily accessable LAND! Certainly jobs is a factor but without available land (and in metro Boston, the available land has so many restrictions on it from each individual town which exacerbates the problem), housing availability will always fall short with an increasing population. And prices will remain high and rise accordingly.

Land is a factor only because zoning prohibits easily and densely building on all the land that exists in older cities. In fact, most sunbelt cities zone out denser development - they just have enough land for low density development

 

[Jouhou]

Land is a factor only because zoning prohibits easily and densely building on all the land that exists in older cities. In fact, most sunbelt cities zone out denser development - they just have enough land for low density development

I think houston is proof we might have the right idea in the long haul. Even if it's an expensive pain in the ass.

 

[jpdivola]

For those too young to remember, the Great Recession was brought about in large part by creating false demand. A demand created to prop up housing prices and sustain a housing market built on upward movement in prices (and supposed affordability).

False demand = real estate bubble? I agree there can be bubbles in ownership assets. People purchase property at inflated prices under the assumption that values will keep rising.

But, I'm sceptical there can be a rental bubble in the same way. People dont expect a return on their rent. They view it as an expence, not an investment. In fact, one of the ways to spot a bubble is to look at trends in property prices vs rents.

So there may very well be some spill over if people convert apts to condos, the high rents/low vacency in Boston rentals seem to indicate prices are largely justified by steadily growing demand and tight, constrained supply.

 

[JeffDowntown]

There is another effect driving supply shortage particularly in the downtown Boston neighborhoods -- the AirBnB effect (caused by the hotel room shortage and resulting very high room rates.).

We are seeing whole buildings being purchased by investor groups, and being converted to full time AirBnB in Chinatown. There are at least 15 such units in my block alone. And they are all being removed full time from the rental or ownership housing market!

I think that the magnitude of this issue is flying under the radar.

 

[bakgwailo]

There is another effect driving supply shortage particularly in the downtown Boston neighborhoods -- the AirBnB effect (caused by the hotel room shortage and resulting very high room rates.).

We are seeing whole buildings being purchased by investor groups, and being converted to full time AirBnB in Chinatown. There are at least 15 such units in my block alone. And they are all being removed full time from the rental or ownership housing market!

I think that the magnitude of this issue is flying under the radar.

That is pretty insane. I have heard/read about this in Barcelona (at a pretty big scale), but hadn't realized the same thing might be happening here, too.

 

[atlantaden]

Land is a factor only because zoning prohibits easily and densely building on all the land that exists in older cities. In fact, most sunbelt cities zone out denser development - they just have enough land for low density development

Frankly, in the Sunbelt cities, zoning allows for dense development while the opposite happens in the Boston area. I lived in Orlando for 30 years and zero-lot line developments were quite common (and housing prices very reasonable compared to metro Boston), the same goes for many other Sunbelt cities with acres of empty land. Not many towns around metro Boston will allow for zero-lot line town-home developments, instead they require an acre or two to build a single family home.

 

[commuter guy]

There is also a qualitative factor in Boston's high housing cost that is hard to analyze with traditional economic supply/demand modeling - there are only so many Beacon Hill/ South End type neighborhoods in Boston. Certain urban neighborhoods whether its Greenwich Village in NY, Park Slope in Brooklyn or North Beach in San Francisco are so scarce and not going to be easily replicated. Assuming crime etc is not out of control and the quality of life is good the wealthy or those with excess disposable income will continue to gravitate to these unique and relatively scarce neighborhoods in significant numbers to the point demand will exceed supply. I'd speculate that these neighborhoods play in the role in the desirability of nearby housing even if it does not share the same characteristics. For example the bland high rises of Charles River park benefit from their location adjacent to the allure of Beacon Hill, etc. Boston could build dense town home communities on zero lot lines but I'm not sure it would lower the cost of housing in central historic Boston neighborhoods. The reason being is that these types of neighborhoods are so unique and scarce across the country.

 

[cadetcarl]

I've never heard anybody demand to live in the absolute best or most iconic neighborhoods though. Not everyone needs a Beacon Hill townhouse, and you're right that those markets will always be hotter than the common housing stock, but what of it? I think newer housing near transit with lower costs and more modern amenities could be a draw for many people who feel that they're probably overpaying for a good address.

 

[KentXie]

Isn't the better question, how can we reduce costs for developers so that they can build the same product cheaper and, therefore, have more viable project and increase supply?

By reducing review regulatory review time, reduce community benefits costs, reduce low income set asides, etc.

At what point can you reduce the cost for developers so that affordable/low-income housing becomes profitable? If you can answer that question, then you may have solved Boston's housing problem. I'll wait.