When I applied for affordable housing in Cambridge, they told me I did not make enough money and was rejected. I had been paying market rents that were 25% higher in Allston for several years, but that didn't matter. I was "too poor" to supposedly afford it. It was quite clear to me their affordable housing program is nonsense.
Do the Affordable Housing Laws Work?
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When I applied for affordable housing in Cambridge, they told me I did not make enough money and was rejected. I had been paying market rents that were 25% higher in Allston for several years, but that didn't matter. I was "too poor" to supposedly afford it. It was quite clear to me their affordable housing program is nonsense.
FitchburgLine
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Inclusionary zoning is a government solution to a government manufactured problem of restricted housing development, that doesn't even work. It's time to admit that supply and demand works in housing markets and relax zoning, or quit with the pretense of supporting diversity. This doesn't just go for Cambridge, the number of people I've seen complain about gentrification and then call for processes that make it even harder to develop (while complaining about "developer profits" or other red herrings) is staggering, and is in no way localized to any one place.
EDIT: This is coming from a single-payer supporting, tax and spend liberal
EDIT: This is coming from a single-payer supporting, tax and spend liberal
pixelsand8
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I always hear this as the great solution but I'd like to see one example of this actually working for a city as dense as Cambridge (never mind it only being 6 square miles), and with similar demand. At best more supply will stop prices from going up, but they are already way too high to support the kind of diversity the city prides itself on. If the "free market warriors" took their position to it's logical conclusion, we'd have to raze blocks upon blocks of triple deckers and turn Cambridge into a mini Hong Kong. Now I do agree that zoning needs to be relaxed but let's be realistic about what that will accomplish.
FitchburgLine
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Sounds great (although I'm doubtful Cambridge is just that wonderful that it can't accommodate growth without complete rebuilding). Remind me why preserving architecture is more important than letting people live where they want to? It's also quite odd that I'm a "free market warrior", perhaps you can tell me what's "free market" about advocating for billions of dollars of government funded transit?
pixelsand8
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Well for starters you would have to seize all that land via eminent domain. Not that I would be against condemnation in every circumstance but to do it en masse is certainly questionable at best. Politically it would be a non-starter for a million reasons, some of them very good, some maybe more maddening. Blame failed urban renewal efforts of past times, nobody wants to make that mistake again.
As for preserving architecture, "historic" and "neighborhood character" concerns aside, it's not exactly cost effective to tear down perfectly good (and perfectly dense) housing.
Nothing, but one can be a libertarian freakzoid on one issue and pinko commie on another. It's odd, but possible. What I don't understand is why leave housing up to market devices but not transit? Do you really think developers would build to solve affordable housing problems if we got rid of zoning? It's not exactly cheap to build and maintain a bunch of residential towers. None of this is to say I'm against adding supply. We obviously need a lot of it, but the overall issue is way too complicated to boil down to a simple supply/demand equation that the market can easily fix with some governmental tweaks. That's not reality.
Ultimately I'd like to see Cambridge build up where it can, but other cities have to contribute as well. We shouldn't have to shoulder the entire region's burden for affordable housing just cause we are well located. Of course it's hard to build effective density outward without major transit expansion, where we run into the same problems as with building affordable housing (lack of $$$). Another thing I'd like to see is more regional cooperation on this issue. The MBTA is regional, why is housing left up to individual municipalities to solve, with no cooperation between them?
FitchburgLine
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You have me entirely wrong. The absolute last thing I want is more government invention, only landowners selling their land to the highest bidder, which would often be a developer, and the neighbors no longer having unlimited ability to trample on the property rights of those developers. Or, if you want a more leftist phrasing, the NIMBYs no longer having unlimited power to restrict the ability of developers to solve community problems regarding supply of housing.
Luckily, we have the market to make those decisions for us, avoiding the need for central planning.
Because private transit in this day does not lead to expansion of transit , ergo it should be handled by the government. Private housing does lead to expansion of the housing market, certainly more than disastrous eminent domained housing projects, so it should be used. I want to use the best tool for the job, not the one that fits some preconceived ideology.
Those "government tweaks" are the fucking reason the problem exists! In the early 20th century, with no zoning and parking requirements, affordable housing was produced in quantity. My idea of minor tweaks is a fire code and basic "hevy industry"/"not heavy industry" zoning, not "less than 3.0FAR with 2 parking spaces per unit and a setback of 15ft....".
Awesome idea. We abolished rent control statewide, why not a ballot initiative requiring cities to streamline permitting for residential projects?
EDIT: Finally, what's your plan? My plan for affordable housing has worked in the past and works in several far eastern cities right now. Inclusionary zoning plus projects plus NIMBYs is not working, and I'd love to see the proposed "demand-side" alternative (not being sarcastic at all, I would sincerely love to see a proposal for affordable housing with significant supply expansion incompatible with existing zoning).
FitchburgLine
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I'd take this further, the idea that people credibly defend parking minimums and 150ft height caps in a city with a 20min subway ride to downtown Boston, while simultaneously (and, I'm certain, genuinely) complaining about a "loss of diversity" shows what messed up priorities we have.
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There is a popular delusion that housing is not subject to supply and demand. People actually believe in their guts that all increased density will do is make the cost problem worse.
http://www.bostonglobe.com/business...et-hour-job/xYKYw3Fcl1IB786rWh4KKP/story.html
"Want to rent in Boston? Get a $50-an-hour job"
"Want to rent in Boston? Get a $50-an-hour job"
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Kinda. And this is what gives lie to Cambridge's diversity claims. Really, you've got two groups:
1) High-wage brainiacs, for whom constrained supply and high prices mean its just them and their buddies participating in "market rate" housing.
2) Beneficiaries of direct state action who win a lottery for one of the quota of "affordable" units.
THe upside to actually unshackling supply (for example, by abolishing zoning altogether and replacing it with offset payments to abutters) is that you'd serve these markets and everyone in between.
Abolishing zoning in Cambridge could make sense because it i already so valuable that you're not going to get slaughterhouses or smetling or whatnot--they will forever remain priced out--but you will get people, and probably a mix of people-at-work (offices) and people-at-home. And you will get a benign mix of light industry (like Superpedestrian building bike prototypes) and services (that local demand keeps on-site)
Trying to create this utopia by force and "fairness" makes things worst for the people that you're trying to help the most.
How much do the local colleges play a role in this with their ever-expanding campuses and the mass of college students themselves?
Sadly this is true. Probably because people see high prices lead to larger buildings going up, but it's only a trickle compared to what's needed. Then they mix up cause and effect, blame the buildings for the prices.
There's also the cases where investment is made into the neighborhood, making it more attractive, bringing additional investment, etc. This can easily happen around large infrastructure megaprojects like transit stations. Then, the value created by that infrastructure winds up in the pockets of speculators lucky enough to get a piece of land. And some via property tax back to the government.
I generally agree that zoning is a failure -- it has not led to normal, affordable housing -- and that it requires sweeping reform.
But even without zoning there is still a need for affordable housing intervention because of one simple reason: the housing market does not optimize for neighborhood stability, nor does it care about displacement. During the normal process of incremental growth and redevelopment, you expect older buildings to be replaced by newer buildings. That's fine and natural. But it does mean replacing old -- possibly affordable -- housing with new housing that has not yet paid off its capital costs. Although things will be better in the long run, as human beings, we also need to care about people in the short run. As a social goal, there needs to be some way of semi-protecting the relationships that form a neighborhood, at least for long enough until they have time to resettle and reshape into the new form.
In short: change is good, but change that happens too rapidly can cause bad side effects. Since we, as a city, have social goals that don't get resolved by markets, we have need of policies that do satisfy those goals. I'm not going to specify what works, exactly, because we don't really know -- and it's probably dependent on time and place, anyway. There is no "silver bullet".
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Matthew, that was a great write up of the social responsibility of development.
Can you or someone explain though why all these $3000 a month buildings should be celebrated, while little to no affordable housing developments are being built? How do these $3000/m apartments help to lower the costs in the affordable or non-luxury market? I can't see a way of how they do. There's all this constant talk about how we need all this development to lower housing costs, but how does it help the costs of the units that are considerably cheaper, but still skyrocketing? What good does a bunch of $3000/m rents have on rents that are $1700 that were $1400 a few years ago? What's going to stop that $1700 rent from increasing to $2000 if the new competition is up at $3000?
There's a sharp gap that is forming in rents and it seems as if the housing market is splitting into two - affordable vs luxury, much like the income gap that has emerged nationally. Yes, luxury costs will decrease with all the luxury competition being built, but what about the non-luxury market? What happens to that?
Note: I'm asking these questions genuinely and am interested in learning their answers. I might be entirely wrong and I can accept that with enough proof, but I've yet to see this aspect addressed and am curious.
Can you or someone explain though why all these $3000 a month buildings should be celebrated, while little to no affordable housing developments are being built? How do these $3000/m apartments help to lower the costs in the affordable or non-luxury market? I can't see a way of how they do. There's all this constant talk about how we need all this development to lower housing costs, but how does it help the costs of the units that are considerably cheaper, but still skyrocketing? What good does a bunch of $3000/m rents have on rents that are $1700 that were $1400 a few years ago? What's going to stop that $1700 rent from increasing to $2000 if the new competition is up at $3000?
There's a sharp gap that is forming in rents and it seems as if the housing market is splitting into two - affordable vs luxury, much like the income gap that has emerged nationally. Yes, luxury costs will decrease with all the luxury competition being built, but what about the non-luxury market? What happens to that?
Note: I'm asking these questions genuinely and am interested in learning their answers. I might be entirely wrong and I can accept that with enough proof, but I've yet to see this aspect addressed and am curious.
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The most affordable car is never actually a new car, but rather a quality used car. Buyers of "new" always overpay (and their overpaying is one way that we keep wages high for middle class construction & manufacturing jobs).
Post WWII was a unique moment when we had so little of both cars and housing that we built things that were affordable and new.
Today, closer to equilibrium, (and wage-labor productivity not leaping upward) the best way to supply affordable used anything--including housing-- is to ensure an unrelenting supply of new that can turn into "quality used" supply.
Post WWII was a unique moment when we had so little of both cars and housing that we built things that were affordable and new.
Today, closer to equilibrium, (and wage-labor productivity not leaping upward) the best way to supply affordable used anything--including housing-- is to ensure an unrelenting supply of new that can turn into "quality used" supply.
Today's newly constructed luxury units are tomorrow's mid-range affordable units. Okay -- that's only part of the story, and it may not be true in all locations, but it is how large parts of our currently occupied housing stock came to be.
Prices are driven by supply and demand. When prices rise high enough, new construction can take place. Luxury units are the easiest to finance, hence the most attractive to investors and therefore developers. It's not a conspiracy, it's just the reality of financing construction in a difficult-to-build city.
Do luxury units cause other buildings' rents to rise? Let's presume that these hypothetical new units are built on a vacant lot. Then: no, not directly, anyway. Given a certain level of demand, if the luxury units are not built, it is quite possible that instead of having new units, existing units are renovated. That would result in a net loss of supply and a capital investment that needs to be paid off. So, it is better to construct the luxury units on the vacant lot than to lose existing units to renovation.
However: investment in a neighborhood can lead to increased demand for that neighborhood. Without any increase in supply, that can lead to higher prices. This is the dilemma that public transit expansion advocates face.
The obvious answer is: increase supply! So: Is there a way to increase supply of mid-range affordable housing using new construction?
Again, remember that the prices are dictated by supply and demand. Therefore, in order to construct mid-range affordable housing, you need to do it when and where the prices are right. But in most of the city, the threshold for construction is at a price higher than most of us would consider affordable.
Then the question becomes: can we lower the threshold? And where can we apply this technique?
So when we talk about policy changes like zoning reform, it comes into play here. Zoning raises the cost threshold. For example: to pick numbers, suppose that the going rate for a 1200 sf unit is $400,000 and suppose that there is a vacant lot. Further suppose that it will cost between $1.2m and $1.5m to finance, purchase, design and construct a building on a given lot. The zoning laws only allow 2400 sf of floor space and no more than 2 units. Much of the remainder of the lot must be given over to parking, setbacks, etc. Developer looks at the market in area and realizes that he won't be able to sell 1200 sf for the $600,000+ it would cost. Therefore, project is a no go. Lot stays vacant until the market rises some more.
Alternatively, developer thinks about applying for zoning variances. Given some wrangling, with legal costs, perhaps a 4 unit building of 900 sf each could be worked out, but now it is up to $1.6m in costs after fighting city hall and angry neighbors. Problem: now it's 900 sf for $400,000 instead of 1200 sf. Still a no go: must wait for market to rise, albeit not as much.
Or, in another world, perhaps there's better luck: said developer is able to convince zoning board and neighbors to allow a 6 unit building of 6000 sf (4 x 900 and 2 x 1200), and the costs only rise to $2.0m because minimum parking quotas are waived. Ergo, each 900 sf unit can be sold for $300,000 and each 1200 sf unit can be sold for $400,000. Just enough to clear costs. Well, maybe still a no go since who does all this work for zero profit? But getting close to workable.
Now consider the world where the zoning allowed the 6 unit building with no parking quotas, as-of-right: developer proposes building for $1.6m - 1.7m, saves a bunch on legal wrangling. The units still sell for their market value, $300,000 for 900 sf and $400,000 for 1200 sf. But now there's sufficient profit motive to get it done. Units get built, people get housing, developer gets money, bank gets money and finances more projects, more developers get involved, more units get built, supply balances out with demand, and prices stay sane.
Anyway, I highly simplified things, but I hope I got some of the idea across.
Really, this kind of thing needs to happen over the course of decades. Perhaps the most pernicious effect of zoning is that it has completely destroyed the normal process of neighborhood growth and development for many decades. For affordability, what we really need is a time machine, to go back and get construction started on all the homes that we didn't build in the past 60 years. Because for regions that already have high housing prices in the market, there's really no good market-based solution: it's the failure to produce housing when it was cheaper back then that leads to the affordability crisis today.
And that's why we turn to subsidies to try and overcome that failure. But it's a subsidy that's only necessary due to years of bad policy (e.g. overly restrictive zoning). For the long term, we should fix the policy problem (e.g. zoning reform), but for the short term, we have to find some way of getting by. And that's where affordable housing policy comes in.
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But there are brand new Toyota Camrys and then there are brand new BMW Z4s. If we extend the analogy to housing, not enough Camrys are being produced and too many BMWs are being produced. I disagree with the broad notion that today's luxury stock will become tomorrow's mid-range stock. That might have been the case in the past, but these new units with granite countertops, 24-hr concierge desks, fitness and yoga studios, etc are here to stay for a very long time. I, and many other people in the market (especially those with professional jobs, but crushed by student loans) don't really want these amenities, but rather just a comfortable and affordable place to live in the city. It is extremely frustrating to see all this luxury stock going up, even in traditionally low income areas like Chelsea.
I use my place in Chelsea (One Webster) as an example of a good mid-range building. It doesn't have a concierge, has just a small fitness room, a modest lounge and nice modern apartment finishes but no laundry in-unit (there are laundry rooms on each floor where its free to compensate for this). No extra bells and whistles. If you compare it to what One North offers (spa services, huge fitness center, theater, chefs kitchen, dining room, business center, etc), it pales in comparison. We need more One Websters that offer modest comfortable living for affordable prices. That's my desire. It sadly doesn't sound like there is a easy solution for this to happen though and the luxury construction will continue to march on. Capitalism at its finest.
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http://www.boston.com/real-estate/l...act-tenants/fJq13m4FbcQrlHdR0nqfMJ/story.html
Has the luxury end of the market hit it's saturation point?
Another article:
http://www.bostonglobe.com/opinion/...ents-boston/YTuEHRvWOtpDfPw1Sw419K/story.html
"ANY DEVELOPER who hopes to build apartments priced for middle income families in Boston needs a keen eye for real estate, sharp negotiating skills, political savvy, good market conditions, and loads of luck. Everything must fall into place perfectly. That’s the lesson gleaned from The Commons at Forest Hills Station — a 283-unit apartment complex now under construction in Jamaica Plain.
The Walsh administration has called for the creation of 17,500 new units of middle income housing in Boston, and 53,000 units overall. Developers here tend to concentrate on either the luxury market or cobble together subsidies to build low-income housing as a way to counter Boston’s high land and labor costs. Middle class families with incomes in the $50,000-to-$125,000 range usually get overlooked in the process.
A local development team, Forest Hills Arborway LLC, offers a partial solution. It is building a $90 million apartment complex on a former industrial site along an underutilized stretch off Washington Street in Jamaica Plain. Two-bedroom apartments will rent for $2,650 per month. That price falls just within reach of middle class families earning $100,000. But it is too much of a stretch for those just a few rungs below.
There is no wiggle room in this town. The ability to maintain the $2,650 price point required a near perfect rollout, according to co-developers Richard High and John Brennan. The land cost was modest given its former use as a fuel depot and uncertainty over the planned demolition of an elevated section of a nearby roadway. The permitting process required just six months, a wink of the eye in Boston. The unionized building trades — and the carpenters’ union in particular — showed a lot of flexibility during negotiations. And rather than toss up the usual obstacles, progressive neighbors in Jamaica Plain accepted The Commons as a good example of a dense, transit-oriented development just steps from a subway station and bike path leading downtown.
Still, the overall picture is sobering. If the perfect development scenario yields apartments that rent for $2,650 per month, where do people at the lower end of the middle class spectrum fit in? High, who is the president of John M. Corcoran & Co. in Braintree, described a huge demand for apartments renting in the $1,500 range. But he doesn’t see how such modest rents could possibly support an adequate return on investment.
The next housing test comes on city-owned and underutilized industrial property along the Fairmount commuter rail line that runs through Dorchester, Mattapan, and Hyde Park. Experienced developers like Joseph Corcoran, president of Corcoran Jennison Associates, are eyeing and even bidding on such properties. Corcoran doesn’t see any way to build significant numbers of market rate, two-bedroom apartments that would rent for $1,500 monthly along the corridor, even if he could secure the city-owned parcels for free. He does, however, envision market rate, two-bedroom apartments renting in the $2,200-$2,400 range. Getting closer.
Even lower rents aren’t out of the question. The building unions are well aware of the volume of work — and goodwill — to be gained by entering into reasonably priced deals to build apartment houses in Boston’s outlying neighborhoods. And the Walsh administration hasn’t even played some of its cards. City officials, for example, are open to providing temporary relief from property taxes in special middle income development areas. That could shave a few hundreds dollars off a tenant’s rent. And there are signs that the city might make minor adjustments in a policy requiring developers to set aside 15 percent of their units for low-income tenants. Right now, those costs get passed on to market rate tenants.
The two-bedroom, $1,500 apartment in Boston remains elusive.
There is, at least, a route to lower rents. First, tenants living in overpriced triple decker apartments would realize they can move to new buildings for the same price. Absentee landlords would respond by lowering rents in those vacated triple deckers. The Walsh administration, meanwhile, would convince universities to build 10,000 or more dorm beds over the next five or 10 years. Free-spending college students would no longer drive up prices, leaving middle income families and workers in a better position to find suitable housing.
The two-bedroom, $1,500 apartment in Boston remains elusive. It is unlikely to come online in the form of new construction. But it might emerge as a byproduct of new construction. And for the first time in a long time, even discussing such a possibility doesn't sound like a cruel joke."
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You and your peers simply aren't a profitable enough demographic for prime land downtown. If you want to live in the city, then get a better job. That's all there is to it.