Housing

goody

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I say yes/it already is as Boston and the Bay Area are so much more expensive then other areas for the same reason, both cities are in roughly the same urban form and economic attributes. Although the order of magnitudes are and probably will always be different.

Specifically, they both cities have strong economies deeply connected to high growth industries in the global market, attracting a globally mobile (and highly educated) workforce that in return requires competitive compensation. Both cities are land constrained, containing dense urban cores and robust urban/suburban development circling them. The suburban growth however is reaching its outer functional limit for commuters with current transportation systems while its densification is socially undesirable and is being governed not by regional planning but by empowered communities (often NIMBYs) and their related shatter-belt of municipalities. Both are further land constrained by topography and bodies of water. Thus on the whole they are in the basic form cut from the same cloth.

Though order of magnitude does matter and there are some differences that are keeping Boston more affordable. The first is all of Boston's ex-urban communities that can accommodate growth with minimal impact, aided by what I would argue is a more comprehensive regional transit system. San Francisco's economy while in many ways similar to Boston is certainly a notch or two (or ten) above Boston's which is driving growth more quickly in the Bay Area. And frankly, the Bay Area's climate is more pleasant and I think there are more people willing to put down long term roots there, supporting that sustained demand.

Now the question what can these cities do to start addressing the issue and in my mind its two big buckets (1) create more as-of-right dense/mixed use housing opportunities via a regional approval process and transformation (and strategic) up-zoning* and (2) improve/ expand transportation to locations that can support TOD development.

*This is a total Pandora's box of displacement and design/creation of place etc, etc, and there would have to be controls to manage externalities of up-zoning.
 

stellarfun

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Read this NY Times article on San Francisco's mayor's very uphill battle to try and build more housing near transit lines.

 

KentXie

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Yes, please please ban broker fees. Brokers have been outdated and essentially redundant since the advent of Zillow, Apartments.com, Trulia, and Zumpers. The fact that the value of having someone show me one apartment that I requested a viewing for (and found doing my OWN research) and 4 that I didn't ask for and is a waste of my time being a whole month's rate is an absolute scam.

I feel for people who's job is mainly to be a broker but selling houses still exists and if they really need a job, the rental market can move toward how things work in Los Angeles, with onsite Building Managers who are responsible for renting out their building's vacancy among other things such as handling work requests. They get free housing to boot in the building they manage.
 

dshoost88

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Yes, please please ban broker fees. Brokers have been outdated and essentially redundant since the advent of Zillow, Apartments.com, Trulia, and Zumpers. The fact that the value of having someone show me one apartment that I requested a viewing for (and found doing my OWN research) and 4 that I didn't ask for and is a waste of my time being a whole month's rate is an absolute scam.

I feel for people who's job is mainly to be a broker but selling houses still exists and if they really need a job, the rental market can move toward how things work in Los Angeles, with onsite Building Managers who are responsible for renting out their building's vacancy among other things such as handling work requests. They get free housing to boot in the building they manage.
The challenge executing that in Greater Boston is that the majority of our housing stock is made up of triple deckers--not LA-scale multi-families. We are seeing more 100+ unit rental multifamilies under construction throughout the city, and essentially all of them already feature on-site building management that handles leasing as you say. But unless you find a landlord that has amalgamated dozens of 2-family and 3-family investment buildings on the same block as each other, it's not feasible to expect an on-site building manager at every investment multi-family across this city.

Boutique real estate firms like one I use to work for in the Back Bay are great because they vertically integrate everything the one-off investment property owner wants: dedicated property manager, dedicated leasing team (brokers) to rent out the unit when it turns over, financial/accounting staff that can handle all the units expenses, and--when the owner's ready to sell--dedicated brokerage sales staff that know the property well and can market it for an efficient sale.

I think given Boston's real estate inventory, a smarter approach to the brokerage fee argument would be to abolish them for multi-family buildings that have XX number of units and a dedicated leasing team on-site (or remotely). I'd want to find out from the Greater Boston Real Estate Board, however, if that's even legally permissible.
 

JumboBuc

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The challenge executing that in Greater Boston is that the majority of our housing stock is made up of triple deckers--not LA-scale multi-families. We are seeing more 100+ unit rental multifamilies under construction throughout the city, and essentially all of them already feature on-site building management that handles leasing as you say. But unless you find a landlord that has amalgamated dozens of 2-family and 3-family investment buildings on the same block as each other, it's not feasible to expect an on-site building manager at every investment multi-family across this city.

Boutique real estate firms like one I use to work for in the Back Bay are great because they vertically integrate everything the one-off investment property owner wants: dedicated property manager, dedicated leasing team (brokers) to rent out the unit when it turns over, financial/accounting staff that can handle all the units expenses, and--when the owner's ready to sell--dedicated brokerage sales staff that know the property well and can market it for an efficient sale.

I think given Boston's real estate inventory, a smarter approach to the brokerage fee argument would be to abolish them for multi-family buildings that have XX number of units and a dedicated leasing team on-site (or remotely). I'd want to find out from the Greater Boston Real Estate Board, however, if that's even legally permissible.
The NY regulation doesn't "ban" broker fees, per se. It just makes it so that tenants won't be put in a situation where they have to pay a broker that they never chose to hire in the first place.

If a tenant wants to hire a broker to help them find an apartment, that's still fine. That broker can still charge the tenant for the broker’s services. And if a landlord wants to pay a broker/management company to help fill a unit (like the situation dshoot is describing) that's still fine too. That broker can still be paid by the landlord.

The situation the NY regulation seeks to prevent is where, essentially, a landlord lists an apartment with a broker but then the tenant has to pay the broker fee. There, the broker is providing the landlord with a service but the tenant is the one who has to pay for it.

Would such a change lead to higher rents, as the fee will be “priced in” to the rate the landlord charges? Yes, it probably would. But this change would still be good for tenants for a couple of reasons:

i) Demand for rental units is not perfectly inelastic. In a competitive market, an increase in the cost of production for any good will only be 100% passed on to consumers if demand is perfectly inelastic. In other words, renters would be expected to still pay some of the broker fee in the form of higher rents, but they won’t pay all of it; landlords will pay some. The policy change would shift the cost burden from [100% tenant, 0% landlord] to [x% tenant, y% landlord] in which x<100% and y>0%.

ii) Landlord demand for the services of brokers is also not perfectly inelastic. Thus, an increase in the cost to landlords of broker services will cause fewer landlords to hire brokers. This will lead to lower total broker fee costs, which again implies that rents will not increase as much as broker fees to tenants will decrease. It also implies that brokers as a whole will realize less revenue, and that some will lose their jobs. This is unfortunate for those individual brokers, but “jobs” alone is not a sufficient reason to keep endorsing a costly and inefficient practice, especially in an economy with near all-time low unemployment.

iii) Even if 100% of broker fees still got paid (which they won’t) and 100% of that cost still got passed on to tenants (which it won’t), at least that cost would now be amortized over the average duration of occupancy. Now a prospective tenant would be able to pay a broker fee out over, say, 30 average months of unit occupancy instead of upfront in one go. That too is a win for tenants, especially those that don’t have a whole stack of cash lying around.
 

Johnnyrocket891

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The fact that most houses that are livable near Boston are running between 600K-1Million. I have a serious problem with the Democrats policies if this is what they call the working class party.
Then factor in all the illegal immigrants living in section 8 housing in million dollar neighborhoods is priceless. What about our own homelessness going on in this country.

This system is truly screwed up.
 

kmp1284

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The fact that most houses that are livable near Boston are running between 600K-1Million. I have a serious problem with the Democrats policies if this is what they call the working class party.
Then factor in all the illegal immigrants living in section 8 housing in million dollar neighborhoods is priceless. What about our own homelessness going on in this country.

This system is truly screwed up.
Rifleman?
 

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