Housing (Supply Crisis & Public Policy)

[DAVE]

We were assigned this article by Claire Harper for one of my courses, and I think it gets at some particulars of the intersection of policy and design that reflects the current developments in Boston (she specifically looks at the UK context). Click here the to read through it.
She essentially argues that neoliberal policies (think LIHTC for US context) combined with utilizing density (specifically density ratios) as a proxy for good development have led to bad design-->specifically designing out all the benefits that people associate with density such as increased connections/'neighboriliness', greater social capital, improved public health etc.

She mentions that this often takes the form of large apartment buildings that feel like a hotel. I've been inside the apartment complex directly abutting JFK/Umass, and that is quintessential apartment as hotel. I thought I would post this here because I've felt these issues with a lot of new Boston developments and wanted to see your thoughts/reactions.

 

[393b40]

I don't want to know my neighbors... so apartment as a hotel is ideal.

 

[Johnnyrocket891]

This has been happening for some time already. Even so, old-stock 3+ bedrooms are designed for family living not "rando- roommate" living.

The luxury condos being built in the city are more geared for family living versus the old stock 2-3 family unit housing around the city that have become more "rando-roommate living".

 

[George_Apley]

The luxury condos being built in the city are more geared for family living versus the old stock 2-3 family unit housing around the city that have become more "rando-roommate living".

Which seems... backwards...

 

[Johnnyrocket891]

Which seems... backwards...

the opposite is actually happening also for the Luxury units.

Couple of articles that have a better understanding on the transformation of Boston Real Estate market.
An article written by Globe -Tim Logan--Sept 10, 2018
"The study found that more than half of the 51 condos at the Mandarin Oriental on Boylston Street are owned by Trusts-- a mechanism sometimes used by investors but also sometimes used by owner-occupants for legal or liability reasons."

Meanwhile, barley one in five residents at Milennium Tower claim the residential exemption suggesting those units may be either second homes or rental properties."

Boston’s new luxury towers appear to house few local residents - The Boston Globe

www.bostonglobe.com

Also another WBUR post back --Sept 11
Boston's luxury towers: A shell game for the global elite? A new study makes the case

https://www.bizjournals.com/boston/news/2018/09/11/bostons-luxury-towers-a-shell-game-for-the-global.html

 

[stick n move]

And unfortunately when the units are being used as investments building more does literally nothing towards bringing prices down for anyone else, because there arent even enough possible units that could be built in the city to soak up that demand. On top of that its barely housing any actual people that are in the housing market and its actually driving housing prices up to allow people to park more and more money there.... Its actually making the situation worse because prices keep going up and more units keep being sold but nobody is really being housed. You cant build your way out of this situation because there is more money than people.

 

[Johnnyrocket891]

And unfortunately when the units are being used as investments building more does literally nothing towards bringing prices down for anyone else, because there arent even enough possible units that could be built in the city to soak up that demand. On top of that its barely housing any actual people that are in the housing market and its actually driving housing prices up to allow people to park more and more money there.... Its actually making the situation worse because prices keep going up and more units keep being sold but nobody is really being housed. You cant build your way out of this situation because there is more money than people.

Expansion and a much better version of our transit system would really go a long way to help bring down the affordable housing costs throughout the state.

 

[George_Apley]

Everything really does come back to the transportation network.

 

[goody]

And unfortunately when the units are being used as investments building more does literally nothing towards bringing prices down for anyone else, because there arent even enough possible units that could be built in the city to soak up that demand. On top of that its barely housing any actual people that are in the housing market and its actually driving housing prices up to allow people to park more and more money there.... Its actually making the situation worse because prices keep going up and more units keep being sold but nobody is really being housed. You cant build your way out of this situation because there is more money than people.

I agree that there is more money than people which is having perverse effects on affordability. I disagree that development and more housing stock, even if it is built for primarily for investors, doesn't help relieve pressure from local housing stock. I think is it is safe to assume that most of those investors were coming to invest in Boston regardless of new development and short of outlawing investment property, I dont know how you would stop them.

Given that, I would rather have investor properties on the 48th floor then in the finer grained neighborhood fabric. In London for example, investment properties are often in historic townhouse neighborhoods, much like Back Bay. I have friends from London who claim entire blocks of the city are dead but for a few brief weeks a year when all the investor families take vacation. The effect is not only large physical areas of the city now lack use and vibrancy but this also geographically pushes gentrification outward more dramatically. The international super wealthy push out the locally wealthy folks who then buy into the next neighborhood and push out the local upper middle class who then move to the next neighborhood... you get it. In the high rise model it is much less impactful. If only 5 locals live in MT that means 417 investors are out of Back Bay and Beacon Hill. From and urban perspective, the base of the tower is activated by retail and the site is tiny. In short, we have packed in a few blocks worth of Back Bay properties into a very small footprint without displacing any local residents directly.

 

[Rover]

the opposite is actually happening also for the Luxury units.

Couple of articles that have a better understanding on the transformation of Boston Real Estate market.
An article written by Globe -Tim Logan--Sept 10, 2018
"The study found that more than half of the 51 condos at the Mandarin Oriental on Boylston Street are owned by Trusts-- a mechanism sometimes used by investors but also sometimes used by owner-occupants for legal or liability reasons."

Meanwhile, barley one in five residents at Milennium Tower claim the residential exemption suggesting those units may be either second homes or rental properties."

Boston’s new luxury towers appear to house few local residents - The Boston Globe

www.bostonglobe.com

Also another WBUR post back --Sept 11
Boston's luxury towers: A shell game for the global elite? A new study makes the case

https://www.bizjournals.com/boston/news/2018/09/11/bostons-luxury-towers-a-shell-game-for-the-global.html

This report was debunked out here shortly after it was posted. Simply put the author cited that people weren't claiming the residential exemption while negating to mention that the place had only opened recently and anybody who recently purchased (most of the owners) weren't in there long enough to be able to claim the exemption. Either really shoddy work that forces people to question all the other conclusions or a deliberate shading of the truth that...forces people to question all the other conclusions!

Finally I'll say that for anybody claiming money laundering, archboston is not the place to pursue charges. Please contact the FBI or the US Attorney's office with your evidence as nobody is in favor of this practice.

 

[jpdivola]

the opposite is actually happening also for the Luxury units.

Couple of articles that have a better understanding on the transformation of Boston Real Estate market.
An article written by Globe -Tim Logan--Sept 10, 2018
"The study found that more than half of the 51 condos at the Mandarin Oriental on Boylston Street are owned by Trusts-- a mechanism sometimes used by investors but also sometimes used by owner-occupants for legal or liability reasons."

Meanwhile, barley one in five residents at Milennium Tower claim the residential exemption suggesting those units may be either second homes or rental properties."

Boston’s new luxury towers appear to house few local residents - The Boston Globe

www.bostonglobe.com

Also another WBUR post back --Sept 11
Boston's luxury towers: A shell game for the global elite? A new study makes the case

https://www.bizjournals.com/boston/news/2018/09/11/bostons-luxury-towers-a-shell-game-for-the-global.html

I have a series of meandering thoughts on this:
1) this study was carried out by an advocacy research organization. While that doesn't discredit it, we should be cautious about its conclusions. Particularly since they line up with the research orgs ideological priors.
2) A dozen lux condo buildings will never put a meaningful dent in housing prices (either way). But, that doesn't mean additional housing isn't needed.
3) If these are being bought solely for investment purposes these are likely to be rented out, so they are likely being occupied.
4) If they are being purchased as a 2nd home in the city, the owner would likely have bought in Boston anyways.
5) All that being said, a vacent lux home tax probably makes sense.

 

[KentXie]

Everything really does come back to the transportation network.

You would need to do more than build a transportation network. We all know that the moment you plop down a train station in a low income area, the surrounding land value goes up, gentrifying the surrounding area and driving existing residents further out.

No, it has to be expanding transportation network in conjunction with government policy to ensure there is sizable (as in more than the number of existing units to begin with) affordable housing for low and middle income families surrounding the station.

 

[jklo]

You would need to do more than build a transportation network. We all know that the moment you plop down a train station in a low income area, the surrounding land value goes up, gentrifying the surrounding area and driving existing residents further out.

That's why I am suggesting that they encourage especially low income people to consolidate. Boston's pretty much unaffordable to everyone at this point unless you are willing to do that or are super rich.

 

[Arlington]

Why does Boston metro seem to not do townhomes ? They are crazy popular in most other big east coast metros and an important option between apartment and single or duplex

 

[jklo]

Why does Boston metro seem to not do townhomes ? They are crazy popular in most other big east coast metros and an important option between apartment and single or duplex

Not dense enough to make the numbers work for the most part. If you can go taller, you can amortize the land costs a bit, although yes the building costs are more if you go that much taller since you can't use crappy wood.

The Riverside Station project is townhomes I think... but that's more because it would have been politically difficult to go any denser and they can likely get the 800k+/unit they would need.

 

[tangent]

You would need to do more than build a transportation network. We all know that the moment you plop down a train station in a low income area, the surrounding land value goes up, gentrifying the surrounding area and driving existing residents further out.

No, it has to be expanding transportation network in conjunction with government policy to ensure there is sizable (as in more than the number of existing units to begin with) affordable housing for low and middle income families surrounding the station.

For an affordable cost of living we need an affordable transportation system, not just more transportation at higher and higher costs.

 

[jklo]

For an affordable cost of living we need an affordable transportation system, not just more transportation at higher and higher costs.

The bus is pretty affordable, it's only 55 bucks a month.

 

[Rover]

People you're putting way too much stock in the myth of affordable housing in Boston's core. It has nothing to do with greedy developers or plutocrats running the government or corruption in city hall or whatever else. There's too little space thus making the existing land too valuable. Consider this:

Boston is trying to build 69,000 new housing units by 2030. Lets say you imposed a 20% affordable housing requirement on all projects, AND stipulated they had to be built on site, not just contributing to a fund. That's less than 14K affordable housing units being built over the next 10 years. Assuming a generous 2-3 people per unit you've created housing for at best 35,000 people over that time, or being able to absorb 3.5K per year.

Boston is gaining about 8K a year in population. That means prices will continue to spiral upwards despite a big change in policy (moving to 20% affordable units required to be on site). Conclusion: only better transit to cheaper places will help alleviate the problem. The rest is a drop in the bucket.

 

[George_Apley]

Also finding ways to get suburban communities to densify, at least in certain parts. No easy ask given the reasonable school district concerns and generally powerful "nimbyism" of the 'burbs. But as you say, Boston, Cambridge, Somerville, Chelsea, Revere, and Everett are never going to be able to absorb housing demand enough to affect rising prices. We need a combo of:

a) Better, faster transportation to/between the Gateway Cities. This will make them more viable living options for commuting into the city and viable employment centers for people in Greater Boston.

b) Denser first and second ring suburbs with better transit within/between them.

c) Dense development within the urban core. Medium-term measures to mitigate displacement and gentrification, as well disincentivizing land banking properties by the uber-wealthy.

 

[Arlington]

Accessory dwellings (eg rentable unit in attic or in/over a garage, not separately deeded) should be legalized at the state level "40B" style.