Idea for fixing the housing shortage

Blackbird said:
Anyone want to summarize? The globe won’t let me pay for the individual article, and I’m not creating a subscription to read this one story.
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A few points from the article:

- New units cost 500 to 600k per unit to build, with high rises closer to Boston costing even more
- Even with zoning reform, costs to build remain high, there is a limit to rents that the market will bear to recapture costs, eventually people leave the area for cheaper housing (my own observation - this seems to be corroborated by significant out migration from the high cost northeast and west coast to the lower cost south)
- in recent years, construction costs have increased twice as fast as rents, straining the numbers which makes production of new housing financially work
- Massachusetts probably needs 25k new units per year, so far this year through the end of Oct. Mass has produced 10k, next year will be even lower
- land costs for multi family construction inside Rte 128 runs around 40k to 80k per unit
- larger projects use union labor; labor earns about $72 per hour (wage and benefits); about 1/3 higher than non union labor, Trade reps state they are more productive and reliable than non union workers
- hard costs, labor and building material amount to 75% to 80% of total cost of building
- developers take 2 to 3% to cover their expenses and staff
- complicated permitting process delays process and adds to costs due to financing carrying costs etc.
- green energy codes add 5% to 10% of cost, costs may be recouped over long term but create high up front costs
- affordable housing mandates add cost; Boston now requires 17% affordable plus an additional 3% set aside for section 8 rental vouchers, this was recently increased from 13%
- developers typically finance half of costs, equity partners invest the other half but expect returns. Pre covid investors wanted 4% return; now they are getting higher than those returns on safer investments like treasury bonds; investors now need 6 to 6.5% return to invest money in higher risk housing; this increases cost of production
- some ideas to lower costs that were mentioned in the article, lower or eliminate parking demands, streamline permitting/zoning, property tax breaks to spark investors to come back into the market. Modular construction can help lower costs in some instances; the article did not mention anything about adjusting green energy or affordable housing mandates to spark demand. I think some other cities have adjusted or are considering adjusting affordable housing mandates given that very little housing is being built for economic reasons;
- developers are worried, lots of projects/cranes currently ongoing, but when this current wave of housing wraps up, the next wave of housing production is going to cost quite a bit more than what's being constructed today.

More details in the full article: https://apps.bostonglobe.com/2023/1...tion-costs/?s_campaign=bdc:globewell:trending
 
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I’ve been thinking about the political incentives behind green building mandates a lot - and my layman’s assumption is that dense housing in urban centers is so much better for the environment no matter the code. Forget natural gas, these places could be running exclusively coal fired ovens and it’d be net positive impact for people to be living closer in an urban environment (hyperbole).

If the buildings are more expensive from these regulations, and more people just move to southern sprawl as a result, the system as a whole is not improving. We may get to say we have [x| green buildings in 2050 but the policies just shifted the problem elsewhere and canceled out the benefit. The political incentive here seems to be: receive high ranking/award/designation from [insert multinational organization] so that applicable politician has a green bona fide.

As someone involved in “green” advocacy i puts me in a difficult spot and I find economic realism/ system level conversations difficult to broach with others in the space.
 
Brandeisian said:
I’ve been thinking about the political incentives behind green building mandates a lot - and my layman’s assumption is that dense housing in urban centers is so much better for the environment no matter the code. Forget natural gas, these places could be running exclusively coal fired ovens and it’d be net positive impact for people to be living closer in an urban environment (hyperbole).

If the buildings are more expensive from these regulations, and more people just move to southern sprawl as a result, the system as a whole is not improving. We may get to say we have [x| green buildings in 2050 but the policies just shifted the problem elsewhere and canceled out the benefit. The political incentive here seems to be: receive high ranking/award/designation from [insert multinational organization] so that applicable politician has a green bona fide.

As someone involved in “green” advocacy i puts me in a difficult spot and I find economic realism/ system level conversations difficult to broach with others in the space.
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I think you raise important macro economic points. Personally, I have concerns for Boston these days. I feel Boston is at an great inflection - work from home changes have changed the economic playbook for Boston and we have very high housing costs. Boston should have more carrot and less stick these days particularly when it comes to housing production. Unfortunately, I don't think City Hall has yet to get that message and has been trending the opposite way. From my cursory review, I think we are outliers nationwide when it comes to the heavy stick approach. For example, I think NYC goes with the carrot approach giving density bonuses to developers if affordable housing is incorporated.
 
In a general sense I think that regional rail plus rail sprawl could make a serious dent in the housing shortage. If you can make 495 45 minutes from Boston then it’s about as far by transit as Watertown, that would open up a lot of land for dense development. Plus much of it would be greenfield which should be cheaper.
 

Boston’s Chief of Planning Arthur Jemison on the future of affordable housing​

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“In the city of Boston, there is one agency that might have more power than anything else over what you see around you: the buildings, parking lots, apartments and parks that shape your neighborhood.

That agency is the Boston Planning and Development Agency, also known as the BPDA. And for roughly 70 years, it’s operated separately from the rest of city government. But Mayor Michelle Wu wants to change that, bringing it all under one roof, under one person.

“What it will change primarily is it will allow there to be the oversight of democratically elected officials through the Boston City Council, something that hasn’t been part of the way the agency’s operated for almost those entire 70 years,” said Arthur Jemison, the city’s chief of planning. “And there’s a level of trust that comes from knowing we have the oversight of the elected officials of the city, that isn’t the same basis of the heritage and history of the agency as we are currently constituted.”

The BPDA is at a crossroads with this ordinance being considered by the City Council. The city itself is at a crossroads too, with some major development in recent years, alongside skyrocketing housing prices and changing demographics in Boston.

“One of the big challenges we have is not just a challenge for Boston, but it’s a challenge even outside of the city, which is creating a predictable system of development that allows the things that we need desperately — workforce housing and affordable housing — to be as of right, as we say in the development industry,” Jemison said.

“As of right” means that development can fall under existing zoning or bylaws, without requiring special permits or waivers to move forward.”

“Right now, that sort of network and system of rules and sort of the path of a successful development project are very complicated,” Jemison said. “And they’re much more complicated here than they are in many other parts of the country.”

Jemison cited an initiative called Squares and Streets, in which the city is trying to create zoning that allows for more housing in areas of the city that have more accessible public transit.

Building more housing around transit centers in Boston is something that most transit advocates and affordable housing advocates would celebrate, but it’s also something that sometimes spawns stiff opposition from people who don’t want to see their neighborhoods changing.

“I think that there’s got to be a way, and I think we’re trying to show the path to do it,” Jemison said.

In his experience, he said, residents are most concerned about unwieldly processes over which they have no control or opportunity for input…”

https://www.baystatebanner.com/2024...-jemison-on-the-future-of-affordable-housing/
 

AG Campbell Announces Esme Caramello As Director Of New Housing Affordability Unit​


“BOSTON — Attorney General Andrea Joy Campbell announced today that Esme Caramello will lead the Office’s Housing Affordability Unit starting this July. Newly established under AG Campbell, the Unit will advance the statewide interest in expanding the availability of housing, and particularly affordable and multi-family housing, throughout the Commonwealth.

Caramello’s appointment comes in the face of a statewide housing crisis, where residents continue to grapple with a high cost of living and a shortage of safe and affordable housing options. The Housing Affordability Unit will further AG Campbell’s strategic priority to expand access to safe and affordable housing by engaging in legal advocacy to support affordable and multi-family housing development, provide resources and guidance to municipalities and developers, and provide additional land use and zoning expertise to areas in which the AG’s Office already engaged….”

https://www.mass.gov/news/ag-campbe...as-director-of-new-housing-affordability-unit
 
stick n move said:

Newly established under AG Campbell, the Unit will advance the statewide interest in expanding the availability of housing, and particularly affordable and multi-family housing, throughout the Commonwealth.​

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Ah, yes, the “how do we legally threaten these towns with dissolution if they don’t agree to build more houses” unit.
 
More housing? Easy:
- remove/limit zoning
- remove/limit architectural review, planning board, neighborhood reviews
- prohibit inclusionary zoning / set asides (which is a tax on production)
- prohibit community benefits
- remove parking minimums
- remove requirements for traffic, shadow, etc studies
 
What I don't understand is why there aren't more "adequate" apartments and apartment/condos being built.

Stop building luxury and start building three bedroom units in medium density buildings that have the basics, but no frills. Why is that such a hard thing to do?

I mean, I'm sitting here in Kuala Lumpur in a building with with about 700 units of housing that is part of a complex that has over 2100 units (3, 45 story buildings). I'm not asking for anything nearly this big, but certainly Boston and the suburbs can put up a few 300 unit buildings that would be good for families who don't want a yard.
 
Subsidizing and popularizing the construction of ADUs might provide some part of the solution.
 
MrDee12345 said:
What I don't understand is why there aren't more "adequate" apartments and apartment/condos being built.

Stop building luxury and start building three bedroom units in medium density buildings that have the basics, but no frills. Why is that such a hard thing to do?
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It just costs that much to build even at public housing grade (ie: the 5+1s).
 
TallIsGood said:
More housing? Easy:
- remove/limit zoning
- remove/limit architectural review, planning board, neighborhood reviews
- prohibit inclusionary zoning / set asides (which is a tax on production)
- prohibit community benefits
- remove parking minimums
- remove requirements for traffic, shadow, etc studies
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I feel like so many people I know or see online have a deep fear of market solutions to anything. So I think inclusionary zoning/community benefit/reviews reform and have a tiny consistency between old home owners and young renters. Anecdotally, I feel at least there's been an increasing amount of people who understand relaxed zoning and parking are good for affordability. I have no data so curious to see what other people's intuition is on this
 
MrDee12345 said:
What I don't understand is why there aren't more "adequate" apartments and apartment/condos being built.

Stop building luxury and start building three bedroom units in medium density buildings that have the basics, but no frills. Why is that such a hard thing to do?

I mean, I'm sitting here in Kuala Lumpur in a building with with about 700 units of housing that is part of a complex that has over 2100 units (3, 45 story buildings). I'm not asking for anything nearly this big, but certainly Boston and the suburbs can put up a few 300 unit buildings that would be good for families who don't want a yard.
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There’s a perception that Americans don’t want to raise families in urban multi family buildings, and that if you can afford it you’ll move to a nice suburb with a yard. Demonstrating that there is such demand is really hard, especially if there’s such low supply that a market can’t be established. If I fail to find anything where I could house a family of 4 in the city, give up, and move to the suburbs, that failure isn’t registered anywhere.

In reality this group is probably pretty small, but it’s gotta be larger than effectively zero and it would be great to have some more options in the city. Not sure how these people can better express this sentiment.
 
Justbuildit said:
There’s a perception that Americans don’t want to raise families in urban multi family buildings, and that if you can afford it you’ll move to a nice suburb with a yard. Demonstrating that there is such demand is really hard, especially if there’s such low supply that a market can’t be established. If I fail to find anything where I could house a family of 4 in the city, give up, and move to the suburbs, that failure isn’t registered anywhere.

In reality this group is probably pretty small, but it’s gotta be larger than effectively zero and it would be great to have some more options in the city. Not sure how these people can better express this sentiment.
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I imagine it probably has as much or more to do with school quality as it does to do with raw space demand. Most people with the resources to get a suburban home and inclination to have kids would probably rather their kids go to Newton or Acton than Boston or Somerville I feel. Improving education would probably go a long way in increasing this kind of family oriented denamd
 
Yes absolutely that’s a big driver, and BPS outside of the few choice schools is a big weight on people with means who can go elsewhere. At the same time (and it’s an anecdote) I’ve noticed some of the wealthier people in my life both a) move to the suburbs and b) send their kids to some elite regional private school, not even taking advantage of the supposed amenity of their wealthy suburb.

Multi family urban housing in Boston is going to be expensive no matter what, and I imagine many people would be more than capable of just sending their kids to a private school and avoiding the BPS question altogether (or gun for Boston Latin).
 
sean99090900 said:
I imagine it probably has as much or more to do with school quality as it does to do with raw space demand.
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You'd be surprised, especially with Dog Mania.

Framingham is a good example. People with kids used to avoid the town just because of the schools... yet you see SFH selling for 600-800k and up. While some of that is clearly desperation for an SFH (and only an SFH)... some of it has to be apathy torwards schools since they don't have any kids but have a dog.
 
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