Housing (Supply Crisis & Public Policy)

What we really need is a massive investment in public transit. Expanding highways will just allow more people to sit in congested traffic. Plus, where are all these additional cars going to park?!

The idea of converting commuter rail to "regional rail" being put forth by TransitMatters is an excellent one. Imagine utilizing the rails we already have for frequent rapid service throughout the day and night. Commuter rail would be useful for more than just 9-5 M-F commuting. Transit Oriented development around stations could allow more people to live car-free or car-lite.
 
fattony said:
There will be no highway expansions in Massachusetts in our lifetimes.
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I think you are confusing Boston with the entirety of Massachusetts, which don't necessarily have the same sets of needs. I agree there is really no reason to widen/expand highways into the city itself, since where are they all supposed to go once they get there?

However, parts of the 128 corridor desperately need widening, which is an ongoing project but hasn't covered the area North of Woburn yet. As was pointed out, Route 3 North from Burlington to Nashua was also widened relatively recently as well. As long as Boston refuses to tackle the housing crisis, more and more people are forced to live outside of the city, and many (most?) jobs are also located outside of the city. It's not as feasible to ride a bicycle from say Woburn to Waltham as it would be from Cambridge to downtown Boston. It's not just Boston that has a traffic problem; the entire inner ring of 95/128 and the outer ring of 495 have major congestion issues as well. (especially 128) Public transit also isn't generally intended to connect different suburbs so much as to connect the suburbs back to Boston. This is why you should, in fact, expect to see ongoing highway improvement projects in Massachusetts for the foreseeable future.
 
They desperately need to redesign the 93 128 interchange in Woburn.
 
.. and once again a thread about housing is derailed into one about transportation ..
 
Rifle always brings the traffic complaints. Dude needs to move where he doesn't need a car it seems.
 
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sorry for this - there’s no online article (source is Boston City Paper). I could post this on a housing thread but I think it’s more apt here... yes, gentrification is bound to happen but there has to be some sort of safeguards against things like this.
 
the landlord owns the property. The tenants lease it they don’t have a right to stay at below market rents.
How about not cutting back every proposed development. Supply will moderate prices but we limit supply and this is the result.
 
TallIsGood said:
the landlord owns the property. The tenants lease it they don’t have a right to stay at below market rents.
How about not cutting back every proposed development. Supply will moderate prices but we limit supply and this is the result.
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Not sure whether this is the place to get in to this, but there are some pretty strong counter arguments to your suggestion that a landlord should make more money without having done anything to earn it. Regardless, I think the point of posting the article was to demonstrate displacement.
 
HenryAlan said:
Not sure whether this is the place to get in to this, but there are some pretty strong counter arguments to your suggestion that a landlord should make more money without having done anything to earn it. Regardless, I think the point of posting the article was to demonstrate displacement.
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But by the same argument, when a chemical plant opens up next to your home and suddenly no one wants to live there you have the right to charge above-market rents and make people pay for it..
I'm sure Sommerville is seeing all sorts of rent hikes from GLX and it's very much warranted. Having light rail access to downtown materially changes the fair value of the property.
 
Right, that's a transfer of wealth from the tax payers who built the transit line and the renters to the landlord without the landlord having lifted a finger. That's not capitalism, it's feudalism.
 
HenryAlan said:
Right, that's a transfer of wealth from the tax payers who built the transit line and the renters to the landlord without the landlord having lifted a finger. That's not capitalism, it's feudalism.
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Not really.

The landlord brought the capital and took the financial risk. You may characterize that as not lifting a finger, but if you had the millions of dollars to invest in something, you'd be looking for ROI too. That IS capitalism. You may not like it, but you don't get to rename it.
 
fattony said:
Not really.

The landlord brought the capital and took the financial risk. You may characterize that as not lifting a finger, but if you had the millions of dollars to invest in something, you'd be looking for ROI too. That IS capitalism. You may not like it, but you don't get to rename it.
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I think the argument is that the landlord hasn't done anything to increase the property value. Presumably they've been earning their ROI from the get-go, but the only reason the value on the property is going up is because of external factors the owner has little/nothing to do with. Raising rents to the point that it gouges/displaces residents sure is capitalism, but it's capitalism's shitty iteration: greed.
 
George_Apley said:
I think the argument is that the landlord hasn't done anything to increase the property value. Presumably they've been earning their ROI from the get-go, but the only reason the value on the property is going up is because of external factors the owner has little/nothing to do with. Raising rents to the point that it gouges/displaces residents sure is capitalism, but it's capitalism's shitty iteration: greed.
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Yeah this is exactly what Henry George saw as the root of poverty/issue with capitalism. Landlords essentially taking private profits from public investment--this eventually inspired the concept of a Community Land Trust.

This story also reflects that most evictions/displacement (in the city of Boston) occur from Corporate/Investor owned units. There have been some buyback policies where the city gives CDC's the right of first refusal and can turn the property into subsidized units-->this is often cheaper than building new affordable units as well. And to the argument that we just need to build more, YES, but the market effects of building new units are delayed. So even if we do build, the effects of displacement will still take place in the period in between the incurred demand and the new units going online. There needs to be both greater tenant protections and facilitated building process.
 
George_Apley said:
I think the argument is that the landlord hasn't done anything to increase the property value. Presumably they've been earning their ROI from the get-go, but the only reason the value on the property is going up is because of external factors the owner has little/nothing to do with. Raising rents to the point that it gouges/displaces residents sure is capitalism, but it's capitalism's shitty iteration: greed.
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When investing great sums in illiquid real estate the landlord is betting that the property will be worth more later whether due to increased demand for housing, growth of urban area or more transit. What did a stockholder do to increase the value of Amazon stock?
Everyone is greedy, including the renter who wants housing for less than market value. That is exactly what a capitalist society is.
Without the landlord investing capital there would be no house for the renter to live in.
 
TallIsGood said:
When investing great sums in illiquid real estate the landlord is betting that the property will be worth more later whether due to increased demand for housing, growth of urban area or more transit. What did a stockholder do to increase the value of Amazon stock?
Everyone is greedy, including the renter who wants housing for less than market value. That is exactly what a capitalist society is.
Without the landlord investing capital there would be no house for the renter to live in.
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A stockholder doesn’t get to increase their profits by renting their stock out at increasingly high margins. Obviously people invest in housing as an asset that they expect will earn them money, but landlords are earning money beyond that asset increase by raising rents without necessarily doing anything to justify it.

We all know what capitalism is. But we don’t have to go all in on Gordon Gekko, bullshit. I’m saying that it’s not unreasonable to mitigate that greed with public policy.
 
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George_Apley said:
A stockholder doesn’t get to increase their profits by renting their stock out at increasingly high margins. Obviously people invest in housing as an asset that they expect will earn them money, but landlords are earning money beyond that asset increase by raising rents without necessarily doing anything to justify it.

We all know what capitalism is. But we don’t have to go all in on Gordon Gekko, bullshit. I’m saying that it’s not unreasonable to mitigate that greed with public policy.
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If you don’t like the rent don’t pay it. If they can’t rent the unit then they will lower the tent. If the rents are high enough it will encourage construction of more housing.
In Boston new housing is either taxed with linkage fees, burdened with low income set asides, burdened by years of regulatory delay and then the amount is reduced by politicians who support current residents over those who need housing.
Remember that rent control is one of the reasons we have issues now. It artificially limited housing production.
 
TallIsGood said:
If you don’t like the rent don’t pay it. If they can’t rent the unit then they will lower the tent. If the rents are high enough it will encourage construction of more housing.
In Boston new housing is either taxed with linkage fees, burdened with low income set asides, burdened by years of regulatory delay and then the amount is reduced by politicians who support current residents over those who need housing.
Remember that rent control is one of the reasons we have issues now. It artificially limited housing production.
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This is what's so frustrating about the housing conversation; abstracting the problem in economic terms. Obviously we have a restricted housing supply and it needs to expand quickly. I'm not a leftist-NIMBY who wants rent control back so the neighborhood can be hermetically sealed. The housing supply can't expand quickly enough to lower-rents in the medium term. Even if we got rid of zoning tomorrow. Developers won't build enough to lower rents or home values, they'll just stop building if they think their profit margins will decrease. The most we can hope for is stabilization, which won't happen building at the current clip (and no real signs of that clip accelerating). Supply will not catch up with demand unless we build tens of thousands more units. In the meantime there are real human consequences of displacement. It's easy to say "If you don't like the rent, don't pay it," but that just sweeps a real human problem under the carpet of economic theory. Government is largely responsible for the housing crunch in Boston, and therefore partially responsible for the housing value increase, and therefore for the rent hikes and displacement. In my view, it's the government's responsibility to mitigate the ill-effects of displacement/gentrification. Part of that is definitely liberalizing the zoning codes to allow for more construction. But in the meantime there has to be public policy assistance for people affected by displacement now, not 20 years from now.
 
George_Apley said:
I think the argument is that the landlord hasn't done anything to increase the property value. Presumably they've been earning their ROI from the get-go, but the only reason the value on the property is going up is because of external factors the owner has little/nothing to do with. Raising rents to the point that it gouges/displaces residents sure is capitalism, but it's capitalism's shitty iteration: greed.
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Being a landlord is extremely risky especially if you mostly rent to poor tenants (or "poor" like College Students) who you would be unlikely to get anything from them in a lawsuit if they damage the place or something happens. Insurance only goes so far.

It can be rather profitable, but most the profit comes from the appreciation, and to an extent drawing down the mortgage. Actually getting cashflow positive is hard/takes several years of owning.
 
Trust me, I know. My family are small-time landlords of a 3-decker in Cambridge. I also know that the building has modern amenities and they charge significantly less than market rate. The landlord of my current apartment building on Prospect Hill also charges less than market rate, and he's a much bigger property owner in the metro-Boston area. Obviously different landlords have different circumstances, but the idea that they must raise their rents or they're suckers is pretty gross, capitalist ideology. According to my landlord, a lot of the annual rent/property value increase is driven by real estate brokers. Anecdotal hearsay, but let's call the rat race for what it is.
 
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