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Old 06-30-2012, 11:18 PM   #1
JohnAKeith
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Boston's housing problem

I'm promoting myself, a post I put on Universal Hub.

I did some research on the age of housing stock in some of the US's major cities including Boston, LA, NYC, SF, Chicago, Miami, and Atlanta, versus the US as a whole, during the period prior to 1939, as well as the decades since then.

Boston wins, easily, in the category of highest percentage of housing built prior to 1939.



Separately, the BizJournals website did its own tally, by county, and found that Suffolk County has had very little growth. (Suffolk County is Boston, Revere, Winthrop and Chelsea. Boston's housing stock makes up about 90% of the total.)

Suffolk County came in 17th out of 3,143 counties when it came to percentage of housing built prior to 1960 and 3,003th out of 3,143 counties when it came to percentage of housing built since 1990. That's the highest 0.5% for the first, and lowest 4.5% for the second.

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Old 07-01-2012, 07:11 AM   #2
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Re: Boston's housing problem

Obviously the age is a problem, and that indicates that more housing is not being built, but is there any way to look at the type of housing that's been built recently?

I know that based on supply and demand, if developers build lots of high end luxury condos, that should in theory keep demand lower for other places, but that doesn't seem to always apply to Boston.

Is it even possible in this kind of economic climate to build a development that would be affordable to middle/upper-middle folks but isn't government subsidized?

EDIT: Also, great job pulling together that data John.
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Old 07-01-2012, 12:31 PM   #3
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Re: Boston's housing problem

Luxury is getting built because of the location, land, cost vs. ease of development, and demand. Rent control and the BRA did a lovely job of effectively blocking residential development in the city of Boston for several decades and that represents a large sum of pent up demand for new units which has yet to be satisfied.

If zoning and the approval process was changed to permit many of the neighborhoods adjacent to transit to be built up, we wouldn't have a housing problem.

The entire South-West corridor should be five story apartment buildings and condos but isn't. The same can be said for all the one story commercial buildings lining Commonwealth Avenue along the B line.

The city desperately needs densification to meet housing demand and yet the planning priorities continue to be solidly suburban.
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Old 07-01-2012, 01:04 PM   #4
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Re: Boston's housing problem

How could rent control prevent housing construction? It applied only to existing apartments, not to anything newly built.
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Old 07-01-2012, 01:43 PM   #5
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Re: Boston's housing problem

Why would a developer build new apartment stock if there's the risk it may be regulated to the point of no longer being profitable? Virtually all housing built during the rent control era was either heavily subsidized or luxury as a result.
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Old 07-01-2012, 01:47 PM   #6
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Re: Boston's housing problem

But there wasn't any such risk, as rent control applied only to units that already existed when the law passed.
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Old 07-01-2012, 05:23 PM   #7
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Re: Boston's housing problem

You don't think that our 'betters' in elected office wouldn't change that on a whim?

There's also the major issues of how rent control grossly undervalued housing stock, dragging other property values down, and made the market for housing rather static. People didn't move around and there wasn't much financial incentive to build new rental housing. There wasn't much value to be found in the city's housing market. Office space was far move valuable and that was reflected greatly in what was built.

Really, Boston's housing problem can be traced back to the city's interference in development through zoning and other means from the 1930s onward. It used to be that the city broadly defined an area for development and allowed developers to move forward with what the market demanded. Once the city started heavily interfering in development, developers shifted their focus to the growing suburbs, and the city became stagnant.

Now that there's interest in the city once again, the issue remains that the city government does a lot to get in the way. The manner in which friends of the mayor speed through approvals vs. what other developers go through to do the simplest of work, speaks volumes to this.
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Old 07-01-2012, 06:49 PM   #8
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Re: Boston's housing problem

I'm not sure how much this Jk's table tells us. Of the 8 cities included only 3 are really peers (NY, Chi, SF). From 1960 to the present we appear to be on par with those three (28 to 32% of the housing stock in these four cities was built after 1960). While this is lower than the four other cities (LA, Miami, LV, and Atlanta) this board would seem to view the Boston peer group as the better models for urban development.

Boston's significant lead in the pre-1939 category is probably owed to a number of factors Vast expanses of SI and Queens were still lightly or undeveloped as of WWII, whereas Boston was mostly built out. Perhaps Chicago (much larger than Boston's area) and SF (about the same as Boston) had land to develop as well, I'm not as sure. Also--one thing that's striking about my travels through the west and south sides of Chicago is how much housing stock has been torn down--there are neighborhoods similar to what you see in Camden or Detroit. Boston has its share of vacant lots, or even contiguous vacant lots in poorer parts of town, but very little wholesale clearance (not counting urban renewal which affected all four).
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Old 07-02-2012, 10:39 AM   #9
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Re: Boston's housing problem

Doesn't Boston's older housing stock actually help increase our density? I'm guessing a lot of our older housing stock is non-conforming under current code (in terms of setbacks, FAR, etc.).
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Old 07-02-2012, 11:17 AM   #10
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Re: Boston's housing problem

I agree. Almost anything built before sprawl-inducing zoning and minimum parking requirements is effectively irreplaceable.
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Old 07-09-2012, 08:58 AM   #11
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Re: Boston's housing problem

Quote:
Originally Posted by Lurker View Post
Rent control and the BRA did a lovely job of effectively blocking residential development in the city of Boston for several decades and that represents a large sum of pent up demand for new units which has yet to be satisfied.
Rent control is a stupid idea, but declining city population was the reason nothing was built.
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Old 07-11-2012, 11:58 PM   #12
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Re: Boston's housing problem

"The entire South-West corridor should be five story apartment buildings and condos but isn't. "

Most of the land adjacent to the SWCP was bulldozed in the 70's and much of the surviving housing stock was in a poor neighborhood or were housing projects. Much of the other buildings were industrial.
The corridor has been slowly developing starting with the former disaster of a project: the moldy Registry Building then Roxbury Community College, Northeastern, Schroeder Police Plaza, the Fernefer's Brewery complex housing Ulla Cafe, the brewery and furniture factory near Health St recently converted to Condos, the new Community Health Clinic with newly dented corner, and if the T runs a surplus, the Arborway Yards project at Forest Hills. The former oil company tanks and buildings across from the Arborway Yards was demoed in the past few years and developers have been eying it.
A sizable mixed-use building at Jackson Square has broken ground.
Lastly, the Casey Overpass eyesore is coming down.
The SWC is developing, it just takes a while; just think how long the Seaport area was a parking lot wasteland, and how much still is.
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Old 07-12-2012, 08:59 PM   #13
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Re: Boston's housing problem

New apartments in the historic "Oliver Ditson" building near the Southwest Corridor - lofts, the prices seem reasonable given location.

http://www.liveoliverlofts.com/
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Old 08-14-2012, 10:33 AM   #14
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Re: Boston's housing problem

Quote:
Tight supply means rents soaring in city
Average of $1,881 is up 7% in a year
By Dan Adams
Globe Correspondent / August 14, 2012

Rents for apartments in Boston* are soaring, and a dearth of construction of less expensive apartments is making it increasingly difficult for tenants to find affordable places to live.

The average monthly rent jumped more than 7 percent to $1,881 in the past year, according to Rental Beast, a brokerage that follows the rental market in Boston neighborhoods. A two-bedroom apartment in the Back Bay now rents for $2,857 a month; in Jamaica Plain, for $1,536.

Things are not much cheaper regionwide, as monthly rents in Greater Boston out to Interstate 495 average $1,796, according* to Reis Inc., a New York data firm that ranks the Boston area as the fifth-most-expensive rental market in the country, after New York City and San Francisco.

“It’s been a complete turnaround,” said Cynthia Campobasso, who manages rental properties around Boston and used to dread departure notices from tenants. “Now when we get notices, we get excited, because it means we’ll get higher rent than we have in years.”

Even finding an apartment is getting tougher. The vacancy rate, already low last year at 3.8 percent, has dropped to 3.1 percent, said Rental Beast. In high-end neighborhoods such as the Back Bay and South End, barely 1 percent of apartments are vacant, making it nearly impossible to find rentals there.

Analysts and real estate brokers said high rents are in some ways the price of success: Boston is doing relatively well economically, and technology and biotech companies have increasingly moved to or expanded in downtown districts, drawing employees who want to live near work.

“The rental market is as strong as it’s been in 10 years,” said Ishay Grinberg, president of Rental Beast. “Is it more expensive? Yes. Is it a pain to find an apartment? Yes. Those are the negatives. But all in all, people still really want to be in these areas, and that cannot in any way, shape, or form be a negative.”

Another big factor driving rents up is the large number of young professionals who are still leery of the somewhat soft housing market and are choosing to rent rather than buy. Empty nesters are also relocating in great numbers from the suburbs to Boston, and college students continue to migrate to Boston, with many colleges and universities reporting higher enrollment, particularly among graduate students, who are less likely to live on campus.

Boston officials said they have permitted construction of 3,256 apartments so far this year in central neighborhoods such as the Back Bay, Fenway, and the Seaport District, where rent pressures are at their most extreme, and another 1,077 affordable units citywide for lower-income tenants. The city has numerous other initiatives that encourage developers to build or preserve subsidized housing, especially for populations like the elderly.

Moreover, over the past two years the Boston Redevelopment Authority has approved about 7,000 apartments and condominiums, though many are still in the development or construction phase. Spokeswoman Susan Elsbree said Boston is suffering from a classic situation of demand outstripping supply. “We have to create supply on every spectrum to decrease the cost overall,” she said.

But many of the new market-rate units have been high-end apartments in the city’s more expensive neighborhoods — downtown and the waterfront, for example — that end up reinforcing higher rents throughout the market.

“There’s not a lot of new inventory coming in, and what does tends to be more luxury-type buildings that address the needs of older empty nesters,” Grinberg said. “There are very few affordable units coming onto the market.”

Some renters are finding, to their frustration, that the only available apartments are the dregs of the market.

“These places were absolutely disgusting,” said Erinn Gloster, a 28-year-old paralegal who has been looking for an apartment since May. “Some places I didn’t want to step foot in the kitchen or bathroom.”

The market has become so tight that Mayor Thomas M. Menino has asked developers to propose novel approaches to providing “worker” housing — units that middle-income tenants can afford to rent, that is.

Among the most novel responses has been so-called micro-housing: tiny, sub-studio-size apartments that have room for little more than a galley kitchen, bathroom, sleeping area, and chair. The units, some as small as 350 square feet, are mostly being built in the emerging Seaport District and will rent from $1,200 to $1,600 a month.

The higher rents add fuel to a long-running debate over whether the region’s housing is just too expensive — for renters as well as the businesses that depend on them.

“If I have to spend 40 or even 50 percent of my household income on rent, that means I’m going to spend less on restaurants, less on clothing, less at malls, less on everything else,” said Barry Bluestone, director of the Dukakis Center for Urban and Regional Policy at Northeastern University.

Bluestone said cities and towns need to aggressively encourage the construction of affordable housing by, for example, eliminating minimum lot sizes and easing restrictions on multi-unit buildings.

For some renters, Boston has gotten to be too much.
David Mailloux, 37, until recently a patient advocate at a health clinic, had been renting in Boston for most of his adult life. But a vacation earlier this year in Madison, Wis., turned into a relocation, once he saw what $800 a month got him: a two-bedroom 15 minutes from downtown.

“I grew up here, but you have to move on,” he said. “No one in their 30s wants to move home because they can’t afford to rent.” He was unable to find a one-bedroom or studio apartment for under $1,000 near Boston. “If rents keep going up, you’re going have to be some superstar lawyer or businessman to afford a decent place in Boston.”
http://www.boston.com/realestate/new...higher/?page=2

Like I stated many times before: You can build as many luxurious condos, and while that will depress overall prices due to the fact that the average price of a luxurious condo will fall, it would not make any impact in bringing more apartments or any high end condos to affordable levels.
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Old 08-14-2012, 11:05 AM   #15
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Re: Boston's housing problem

If you're required to build 15% of the units as 'affordable', then you're going to make your market-rate units more luxurious and pricier to keep your profit margin up. Time to end Tom Menino's Tomfoolery.
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forget it ever happening, its too great an idea.
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Old 08-14-2012, 11:27 AM   #16
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Re: Boston's housing problem

There's so much land that's simply wasted, in good locations. Either empty parcels or single story buildings. And then the number of hoops that developers have to jump through just to get something done -- that's costly.

I agree with Bluestone on this:

Quote:
Bluestone said cities and towns need to aggressively encourage the construction of affordable housing by, for example, eliminating minimum lot sizes and easing restrictions on multi-unit buildings.
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Old 08-14-2012, 11:45 AM   #17
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Re: Boston's housing problem

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Originally Posted by BostonUrbEx View Post
If you're required to build 15% of the units as 'affordable', then you're going to make your market-rate units more luxurious and pricier to keep your profit margin up. Time to end Tom Menino's Tomfoolery.
You other option, to build 100% market rate units that are above affordable results in no new affordable units. This leads to no supply relief for affordable units while demand increases for affordable housing, pushing the price of existing affordable housing higher. The article points out exactly this problem. Affordable housing is rising because supply for affordable housing isn't increasing. It's a vicious cycle because as demand continues to rise, the price of affordable housing continue to increase, pushing it above what is affordable and the supply of affordable housing thus decreases.
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Old 08-14-2012, 12:11 PM   #18
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Re: Boston's housing problem

"Affordable housing" isn't a separate thing from housing. It's just housing at a more reasonable price. The fairest way to achieve that is to build more supply, period.

Do you also support Rent Control, KentXie?
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Old 08-14-2012, 12:31 PM   #19
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Re: Boston's housing problem

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"Affordable housing" isn't a separate thing from housing. It's just housing at a more reasonable price. The fairest way to achieve that is to build more supply, period.

Do you also support Rent Control, KentXie?
I think Kent is using "affordable" in quotes to refer to the units that developers build and designate affordable, which the city requires on larger projects. Those units are typically required to charge for rent no more than 30% of the monthly income of someone making 80% (or sometimes 100%) of the area median income.

And he's right. Including a 10% or 15% affordable quota on large projects is a good thing. Someone making 80% or 100% of the area median income isn't Section 8. They're middle class.
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Old 08-14-2012, 12:36 PM   #20
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Re: Boston's housing problem

Quote:
Originally Posted by Matthew View Post
"Affordable housing" isn't a separate thing from housing. It's just housing at a more reasonable price. The fairest way to achieve that is to build more supply, period.

Do you also support Rent Control, KentXie?
I support rent control in some cases and I see its benefits. There was a story about London during the Olympics where landowners, for the few weeks that the Olympics were in town, raised the price from $800/week to $2250/week. This was done so that landowners can evict long-term residents and rent out the apartments to short-term residents (visitors). As you know, London does not have rent control and the permanent residents had no leverage whatsoever. In most cases, they had to look elsewhere to live.

But this isn't a rent control and while affordable housing isn't a separating thing from housing per se, just increasing supply wouldn't necessitate reasonable price.

As I stated many times, landowners will not, and I repeat, WILL NOT lower the price under a certain threshold. Most of the time it that threshold would be just at a loss. Meaning a condo that was built at a cost of $600,000 would never be sold at anything less than probably $400,000. Instead, the owner would sit on it as investment until someone buys it or sells it to another investor who would do the same.

Meanwhile, let's say affordable is $100,000. If there's no relief and demand continues to increase for let's say, $90,000 apartments, the price of those apartments will get pushed up. Before you know it those apartments will break the $100,000 threshold into let's say $110,000. As more apartments gets pushed to that range, the supply of affordable apartments drop until it hits equilibrium (which is, in real life, when people decide to screw living in the city and moves out to other places).

Of course condos are flooding the market but nobody is willing to sell it for 1/6th of its cost. So what happens? Average housing cost drop down because the average condo price falls, until it hits a threshold, in this case, at a small loss.

You may think, in this case why would anyone continue to build luxury housing? The answer is: Speculation. Your thinking, is exactly what developers are thinking.

They think: "Oh as you can see, prices of housing continue to rise. This must mean that there's certainly demand for housing. The type of housing with the highest profit will be luxurious condos, especially ones built near train stations and have an indoor pool and gym, etc. Why wouldn't anyone want them?"

What they don't realize is that apartment prices are rising due to demand. Condo prices remain high because of speculation, that there should be a standard at which prices should be set just because the condo has an indoor pool and gym and is convenient. This is true but demand isn't following it. This is why you hear about how many luxurious high rises going up in Boston have high vacancy rates.

In conclusion, you can build as many luxurious condos, but it wouldn't make a dent in affordable housing prices.
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