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Suffolk 83

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In other words, ignore externalities and force everyone else to pay for them.

Your cars and smokestacks spew shit into the air that causes asthma and emphysema? Who cares! Free markets!

Your pipes throw toxic shit into the water supply? Who cares! Free markets!

Your ridiculous financial instruments bring down the entire economy? Who cares! Free markets!

There are lots of reasons why we have your decried "Zoning, design review, environmental review, low income set asides, union labor requirements, etc." It's so selfish, money-addicted turds don't run roughshod over everyone else, hoovering up every last dollar they can get their hands on like a cokehead on a bender. I realize that amoral libertarianism is all the rage these days, but pretending that externalities don't exist doesn't make them go away. It just shifts the costs onto people who aren't getting the profits.
Oh man... great post, love it!
 

bigpicture7

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In other words, ignore externalities and force everyone else to pay for them.

Your cars and smokestacks spew shit into the air that causes asthma and emphysema? Who cares! Free markets!

Your pipes throw toxic shit into the water supply? Who cares! Free markets!

Your ridiculous financial instruments bring down the entire economy? Who cares! Free markets!

There are lots of reasons why we have your decried "Zoning, design review, environmental review, low income set asides, union labor requirements, etc." It's so selfish, money-addicted turds don't run roughshod over everyone else, hoovering up every last dollar they can get their hands on like a cokehead on a bender. I realize that amoral libertarianism is all the rage these days, but pretending that externalities don't exist doesn't make them go away. It just shifts the costs onto people who aren't getting the profits.
^As Suffolk states, fantastic. +1000

Before TallisGood even responds, let's pre-emptively counter the blind ideological response that will be spewed:
"But, but, the markets will correct for bad behavior because ultimately those perpetrators will be punished by loss of business...efficient market hypothesis!...everything is self-correcting in the long run!..."

Except:
"In the long run, we are all dead"
- J. M. Keynes

Truth about a democratic capitalist society:
We the people, the voters, get to decide on societal values and standards. Capitalism can exist within the bounds of what we, as a society, determine our values to be. We do not need to wait for "the long run" and "death".
 
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bigpicture7

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And How about this for irony:

If the developers took more of an "alignment with societal values" stance, then they would encounter a shit-ton less resistance to every project, and all of these frictions that add cost and delays would shrink.

There is no reason why some of the grassroots progressives who are resisting development couldn't be turned into allies, which in turn, could lubricate the whole process.
 

fattony

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I think we really need to rethink our understanding of free markets in housing. The traditional thought is the more housing we build regardless of type will help ease price pressures due to basic supply and demand... Its proving itself right now right in front of us in our backyard to NOT be true. I think has some very spot on points regarding this:

https://digboston.com/six-questions-boston-should-grapple-with-before-greenlighting-thousands-more-luxury-units/

Specifically this:


More units are not lowering prices but actually raising prices.... There isnt enough regulation in Boston regarding luxury units and dictating if people actually live in the units. There's something clearly going on and its defying traditional supply and demand- probable money laundering as mentioned in the article. Luxury is begetting higher prices not satisfying the market and lowering them for others.
I'm not a blind ideologist, but I do believe that market forces are natural, powerful, and dominate most economic behavior (though not all). I also believe that externalities are important reasons for governments to step in and protect people/society.

When I read a piece like this, where the author causally dismisses every principle of economics, I'm not convinced of anything. Its just a string of hollow, unsubstantiated assertions from someone with an ideological, foregone conclusion. The corollary to his position is that if we built nothing then prices would be lower than today which is laughable on its face.

If prices continue to raise in the face of new construction, all it means is that we are still building too slow. There is no such thing as "luxury" homes. There are only new homes. All new homes are at least a little luxurious because they are new. New homes are especially luxurious when the demand from the wealthiest end of the market is unmet. You can make the case all day that we should look out for the little guy, but that isn't going to happen until we make it more profitable to build for the little guy than for the wealthy. Have any ideas how to do that short of government subsidies (direct or indirect)...? Right, neither does anyone else and that's why we have government subsidies.

The author doesn't get around to having a coherent thought until question 6 where he rightly points out that the government can steer outcomes in the desired direction by using taxation (additional costs) to discourage the undesirable and spend the proceeds to encourage (lower costs) for desirable outcomes. That is how governments can be very effective at manipulating markets - by intervening on the market's terms and not through fantasy/voodoo economics.
 

Rover

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I think we really need to rethink our understanding of free markets in housing. The traditional thought is the more housing we build regardless of type will help ease price pressures due to basic supply and demand... Its proving itself right now right in front of us in our backyard to NOT be true. I think has some very spot on points regarding this:

https://digboston.com/six-questions-boston-should-grapple-with-before-greenlighting-thousands-more-luxury-units/

Specifically this:


More units are not lowering prices but actually raising prices.... There isnt enough regulation in Boston regarding luxury units and dictating if people actually live in the units. There's something clearly going on and its defying traditional supply and demand- probable money laundering as mentioned in the article. Luxury is begetting higher prices not satisfying the market and lowering them for others.
This is brainless NIMBY bullshit from the same idiot who wrote a similarly faulty press release that the Globe published last week with nary a fact check to be found. :rolleyes:

On the one hand the idiot says nobody's living in these units, BUT on the other hand they're pushing people out to the neighborhoods??? Um...that doesn't make sense. If real people aren't actually the ones who want to purchase these units, since they apparently only exist to launder money instead of filling an actual housing demand, who's getting pushed out? Ghosts? Whoever was camping out in empty lot that One Dalton went up on?

Furthermore, the author seems to struggle mightily with the idea that all of these units generate badly needed tax revenue for the city, regardless if they're populated with Murph & Sully from Southie, empty nesters from Wellesley, Russian oligarch money, or intergalactic beings. All those units are generating tax revenue.

Finally, Boston had an election recently. The citizens of the city, not the developers and not the NIMBY activists, wiped their collective asses with Chuck Collins argument and overwhelmingly elected the pro-development mayor over the anti-development challenger. Seems people have already made their decision and they can't all be on the payroll of some builder or construction company.
 

TheRifleman

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In other words, ignore externalities and force everyone else to pay for them.

Your cars and smokestacks spew shit into the air that causes asthma and emphysema? Who cares! Free markets!

Your pipes throw toxic shit into the water supply? Who cares! Free markets!

Your ridiculous financial instruments bring down the entire economy? Who cares! Free markets!

There are lots of reasons why we have your decried "Zoning, design review, environmental review, low income set asides, union labor requirements, etc." It's so selfish, money-addicted turds don't run roughshod over everyone else, hoovering up every last dollar they can get their hands on like a cokehead on a bender. I realize that amoral libertarianism is all the rage these days, but pretending that externalities don't exist doesn't make them go away. It just shifts the costs onto people who aren't getting the profits.
The problem to the current system is it only favors one group--the corporate group.

There are two sets of rules.
1 set of rules for the group that has money
2nd set of rules for the rest of us

The market has never be able to self-correct since 2008 on its own. Especially to adjust the stupidity of all the bad decisions that have been made and created by the ones in power. (This is the main problem)
Its not even housing costs that are out of control.
College tuition
Organic Foods
Housing
Overall cost of living is insane for a family.

Govt & state pensions?
Do you know 1 private corporation that actually offers a pension anymore?

The money printing scheme by our trusted private Federal Reserve Bank is a giant Ponzi scheme on the backs of the American working class by watching their purchasing power eroding to peanuts. Its not like the working class can get a 100Million dollar loan at 2%. The only groups that can get that printed money is the corporations at low interest.

Just look at all the corporate tax deals in the Seaport which only is driving up costs for the working class in around Boston.

Laws and Rules need to apply to both groups. Mayor Menino was a perfect example for the Downtown Tower.
Its not okay to give tax breaks to Vornado but its okay to give tax breaks to Millinieum Group.

Your political leaders for the last 30 years are responsible for not protecting our laws from these corporations. They are machines not people.

Affordable housing is long-gone in around Boston----You need to move at this point. Do you still think LOW INTEREST rates helped the overall Middleclass families in Boston for decade? I would say the rich are the new middleclass in Boston.
 
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Suffolk 83

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On the one hand the idiot says nobody's living in these units, BUT on the other hand they're pushing people out to the neighborhoods??? Um...that doesn't make sense. If real people aren't actually the ones who want to purchase these units, since they apparently only exist to launder money instead of filling an actual housing demand, who's getting pushed out? Ghosts? Whoever was camping out in empty lot that One Dalton went up on?
Its pushing people out by driving prices up. duh this isnt that hard to grasp. Anonymous LLCs buy up units in new building x for tons of $$ because of money laundering or foreign investment then old building y across the street can charge the same exorbitant price, thus pushing people out, especially the middle class
 

JumboBuc

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Its pushing people out by driving prices up. duh this isnt that hard to grasp. Anonymous LLCs buy up units in new building x for tons of $$ because of money laundering or foreign investment then old building y across the street can charge the same exorbitant price, thus pushing people out, especially the middle class
That's not how pricing works at all... If I opened up a Ferrari dealership on Brighton Ave would that act cause the prices of the Toyotas sold next door to go up?

Could a rust belt town where houses cost $50 grand increase the value of those homes by putting up a new 60-story luxury condo tower?

A seller can only charge what a buyer is willing to pay. A seller cannot charge what some other buyer somewhere else once paid.
 

Suffolk 83

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That's not how pricing works at all... If I opened up a Ferrari dealership on Brighton Ave would that act cause the prices of the Toyotas sold next door to go up?
Your making a different argument (twisting it) than I am.

If ferrari starts charging an extra 25% on its products, it justifies lamborghini to charge 20%, if they charge 20% more, mercedes AMG can charge more....

A rising tide lifts all boats
 

JumboBuc

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Your making a different argument (twisting it) than I am.

If ferrari starts charging an extra 25% on its products, it justifies lamborghini to charge 20%, if they charge 20% more, mercedes AMG can charge more....

A rising tide lifts all boats
Then why doesn't Ferrari just start charging an extra 25% today? What's the downside to them, under this theory?
 

fattony

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Its pushing people out by driving prices up. duh this isnt that hard to grasp. Anonymous LLCs buy up units in new building x for tons of $$ because of money laundering or foreign investment then old building y across the street can charge the same exorbitant price, thus pushing people out, especially the middle class
Your argument is muddled because you are mixing causes and effects from two different groups.

New condos selling for high prices cannot drive out existing homeowners from their homes. They might choose to sell for a windfall profit, but that is voluntary and the people affected do it because it benefits them financially. If anything, new homes added to the tax rolls cause the tax burden to be redistributed away from existing home owners.

Present-day renters are the only people who can be "driven out." If they are currently renters and want to buy a home, then they are the people driving up the home prices (i.e. they are part of the high demand). If they want to stay renters - how exactly do new condos drive up their rent? If there is any effect, it is a distant secondary to the primary effect: Rents are driven up by all the people with high salaries who are willing to pay a little more than the last guy. The only thing driving up housing cost in Boston is our job market.

Anecdotally, my buddy just moved to the burbs but kept his home in Somerville for rental income. He just signed the lease last night for $2700 on his 1-bedroom place. There have been no significant number of new homes built in the area. Why should the rent be so high? In short - simply because someone is willing to pay it. I'm sure it is someone who makes like $150k or a couple who make $200k between them.
 

Suffolk 83

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because the market for luxury cars is the market for luxury cars and hasnt really changed. The Boston housing market has morphed to investment properties because of lax rules which has driven the costs up for everyone. Youre trying to make an arument apples to oranges here that's not fair
 

JumboBuc

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Your argument is muddled because you are mixing causes and effects from two different groups.

New condos selling for high prices cannot drive out existing homeowners from their homes. They might choose to sell for a windfall profit, but that is voluntary and the people affected do it because it benefits them financially. If anything, new homes added to the tax rolls cause the tax burden to be redistributed away from existing home owners.

Present-day renters are the only people who can be "driven out." If they are currently renters and want to buy a home, then they are the people driving up the home prices (i.e. they are part of the high demand). If they want to stay renters - how exactly do new condos drive up their rent? If there is any effect, it is a distant secondary to the primary effect: Rents are driven up by all the people with high salaries who are willing to pay a little more than the last guy. The only thing driving up housing cost in Boston is our job market.

Anecdotally, my buddy just moved to the burbs but kept his home in Somerville for rental income. He just signed the lease last night for $2700 on his 1-bedroom place. There have been no significant number of new homes built in the area. Why should the rent be so high? In short - simply because someone is willing to pay it. I'm sure it is someone who makes like $150k or a couple who make $200k between them.
Yes, this 100%.

The driving force behind our high housing prices is our red hot job market. If we are to put restrictions in place to limit housing growth, then the corollary to that would be to also put restrictions in place to limit job growth (i.e., if you want to hire someone, you have to file an application with the City and go before a community review board to determine if that persons hiring is really a good thing for the community, and make your case as to why they should be allowed to be hired). Obviously this will never happen because it is a terrible idea. In practice, the City and Commonwealth go out of their ways to increase job growth and incentivize companies to locate here.

As long as job growth continues unabated and housing growth doesn't, prices go up. The presence of a handful of luxury buildings has no bearing on this.

If employment is going to grow then housing needs to increase. It's simple as that.
 

fattony

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Could a rust belt town where houses cost $50 grand increase the value of those homes by putting up a new 60-story luxury condo tower?

A seller can only charge what a buyer is willing to pay. A seller cannot charge what some other buyer somewhere else once paid.
This, this, a thousand times, this.
 

Suffolk 83

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Yea existing home owners are largely not getting hurt by this, tell me something we didnt already know. Renters and new home buyers are getting killed. People that could barely afford property taxes before (ie the poor) are being forced to sell and move out because their houses get reassessed and they cant afford the higher property taxes
 

JumboBuc

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The Boston housing market has morphed to investment properties because of lax rules which has driven the costs up for everyone. Youre trying to make an arument apples to oranges here that's not fair
Honest question: what percentage of the Boston housing market do you believe "has morphed to investment properties because of lax rules which has driven the costs up for everyone"? And remember that most "investment properties" are otherwise known as "rentals" (e.g., the traditional Boston triple decker where the owner lives on one floor and rents out the other two is 67% an "investment property").

Is there any evidence anywhere that the Boston housing market has moved from one that primarily houses Bostonians (whether they own or rent) to one where units sit empty (and pay HOAs and property taxes) to store cash? For what percentage of units do you believe this is the case?
 

fattony

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Yea existing home owners are largely not getting hurt by this, tell me something we didnt already know. Renters and new home buyers are getting killed. People that could barely afford property taxes before (ie the poor) are being forced to sell and move out because their houses get reassessed and they cant afford the higher property taxes
This is simply not how property taxes work.

Your taxes only go up if the city increases the levy (total taxes collected) and/or your home value went up faster than the other homes in your city/town. There are a handful of people effected by a geographic differential in price appreciation, but it is a relatively small effect AND for every person whose taxes when up because of the differential there is someone whose taxes went down.

If people are being driven out of Boston because they can't pay their tax bill, it is because their elected officials have raised taxes. It has nothing to do with the aggregate increase in home prices.

https://en.wikipedia.org/wiki/Proposition_2½
 

Suffolk 83

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I'm (we're) talking about new units. The new buildings going up and whether its actually good for the city or not. We're building thousands and thousands of new units (all luxury) at this point and according to basic and universally accepted supply and demand theory, prices should be easing should they not? You really think its just that we're adding that many well paying jobs and all the building lately is still outpacing demand?

You don't think there's any issue with just allowing all new buildings to be luxury? You dont see any problems with this?
 

Suffolk 83

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This is simply not how property taxes work.

Your taxes only go up if the city increases the levy (total taxes collected) and/or your home value went up faster than the other homes in your city/town. There are a handful of people effected by a geographic differential in price appreciation, but it is a relatively small effect AND for every person whose taxes when up because of the differential there is someone whose taxes went down.

If people are being driven out of Boston because they can't pay their tax bill, it is because their elected officials have raised taxes. It has nothing to do with the aggregate increase in home prices.

https://en.wikipedia.org/wiki/Proposition_2½
Your property values get reassessed periodically do they not? That makes your taxes go up when they deem your house is worth more. Your house is worth more based off the market, the market changes thus why they keep reassessing
 

fattony

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You don't think there's any issue with just allowing all new buildings to be luxury? You dont see any problems with this?
What makes a building luxury? What is a non-luxury building? That is a meaningless distinction, just marketing terms. Every new development from the Back Bay to Everett claims to be "luxury," but I've got news for you - they aren't in the same league just because they put a word on a sign.

New homes are nicer than old homes. That is pretty hard to avoid. Are you supposed to build a new home and make it dumpy on day-1? Think, man. Think about what you are saying before typing nonsense.
 

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