Why Boston rents are so high.

[Arlington]

Originally Posted by TheRifleman

Why Boston rents are so high?

There is alot of factors:
Boston/Cambridge is a major College Hub
MIT---the top scientists, Engineers continue to come to the city
#1 in Startups
#2 City is very accessible and offers jobs-
#3 Everybody wants to live in the same area Somerville, Charlestown, Boston, Cambridge, Southie,
#4 Top of the Tier students from other countries
#5 Boston has HISTORY
#6 Sports Teams (Pats, Celtics, Bruins, Redsox)
#7 4 Seasons
#8 Essex (Truly New England)
#9 Cape Cod
#10 Leader in Biotech

Bottom Line Massachusetts is a beautiful State--

This explains the demand part of supply and demand. In a free market, supply would arise to serve/meet that demand.

Restraints on supply, particularly an unwillingness to build tall and "close in", and the fact that this unwillingness is historical are probably more than half of the reason.

[TheRifleman]

Build Tall and Close in (good Theory)-- Instead we went the other route---along with the Casino Variable is going to Crunch 93 N/S---

TRAFFIC Armageddon coming soon (2019)

[tysmith95]

The casino is not going to affect I93 in a meaningful way. Most of the traffic will be outside of rush hour.

[Oakley]

http://www.businessinsider.com/us-re...alysis-2016-11

[bigpicture7]

Originally Posted by Oakley

http://www.businessinsider.com/us-re...alysis-2016-11

Hopefully this should help quiet some of the anti-development folks who think that building high end residences has no effect on overall affordability.

Increasing supply in a housing starved market = good. Sure there are nuances, but It's a pretty basic concept. The developers are still profiting despite the leveling off of the market - it would have been scarier if rents kept rising forever.

[FitchburgLine]

This is good, but the challenge for the BRA is reforming the development process into a more sustainable, less bubble prone system that allows for sustained growth even without insane rents. That involves streamline review, more lenient zoning, no parking requirements, and available reliable transit. Boston is great, so we should allow far more people to afford it.

[meddlepal]

There was some good discussion about this article on Hacker News the other day. A lot of people called it out as a flawed study because it doesn't take into desirability and how that affects pricing across the board. If you have a ton of cheap housing in transit-unfriendly places that will drop housing prices considerably, for example, much of the Boston stock is in Brighton, Hyde Park, and the outskirts of Dorchester all places that may not be easily accessible at all and their prices which are lower will skew everything.

[bakgwailo]

Originally Posted by meddlepal

There was some good discussion about this article on Hacker News the other day. A lot of people called it out as a flawed study because it doesn't take into desirability and how that affects pricing across the board. If you have a ton of cheap housing in transit-unfriendly places that will drop housing prices considerably, for example, much of the Boston stock is in Brighton, Hyde Park, and the outskirts of Dorchester all places that may not be easily accessible at all and their prices which are lower will skew everything.

I have to really disagree here - Boston includes all of the neighborhoods, not just Downtown, and I think most can argue that the soul of Boston is in the neighborhoods. I live on the 'outskirts' of Dorchester and can get into Boston pretty easily via the Highspeed Line and Red Line. Maybe a total of 6 miles to downtown. Just look at Lower Mills - the converted chocolate factory there is easily 2k+ for a one bedroom. Hyde Park is a solid middle/working class neighborhood and that has multiple commuter rail stations (and lines) along with buses down Hyde Park Ave to Forest Hills. Brighton is a bit worse off on the transit side of things, but it isn't exactly cheap either. To advocate that the data from the neighborhoods shouldn't be counted is kind of... crazy. Only about of a quarter of the population of the city lives in Dot

Boston is a tiny city, as is SF land wise. I would argue most of SF proper is much more transit poor than here - and I wouldn't rule those areas out in a study like this. I mean, it is the most expensive place in the country at the moment.

[tysmith95]

So what this is saying is that adding new "luxury" units to overpriced cities helps to normalize the supply demand relationship and eventually lower prices. Who woulda thunk?

And I agree with Bak, places like the Back Bay and Downtown will always be unaffordable for most people. The majority of the population lives in places like Dorchester, Eastie, Allston, etc.

[KentXie]

Originally Posted by tysmith95

So what this is saying is that adding new "luxury" units to overpriced cities helps to normalize the supply demand relationship and eventually lower prices. Who woulda thunk?

And I agree with Bak, places like the Back Bay and Downtown will always be unaffordable for most people. The majority of the population lives in places like Dorchester, Eastie, Allston, etc.

And how much housing is being added in these neighborhoods? The majority of these large projects are being built in Back Bay and Downtown and like you said, they will always be unaffordable. The city needs to make more of an effort to densify places like Dorchester, East Boston, Allston, etc. with cheaper options, instead of only plopping down luxury towers in Downtown, West End and Back Bay. That's how you make a large dent in prices.

[bakgwailo]

Originally Posted by KentXie

And how much housing is being added in these neighborhoods? The majority of these large projects are being built in Back Bay and Downtown and like you said, they will always be unaffordable. The city needs to make more of an effort to densify places like Dorchester, East Boston, Allston, etc. with cheaper options, instead of only plopping down luxury towers in Downtown, West End and Back Bay. That's how you make a large dent in prices.

I can't speak for the other neighborhoods, but Dot is adding a ton of housing - in the thousands of units from huge projects like the Dot Block and South Bay project to smaller stuff like the two projects near Ashmont, to tiny stuff like the 6 condo infill they just built down the street from me where a single family used to be.

[fattony]

Originally Posted by KentXie

And how much housing is being added in these neighborhoods? The majority of these large projects are being built in Back Bay and Downtown and like you said, they will always be unaffordable. The city needs to make more of an effort to densify places like Dorchester, East Boston, Allston, etc. with cheaper options, instead of only plopping down luxury towers in Downtown, West End and Back Bay. That's how you make a large dent in prices.

Southie has added an eye-popping number of units, but they are distributed and not in very visible high-rises.

[tysmith95]

Somerville, Eastie, and Waltham have also been adding a large quantity of units.

As far as the Back Bay goes not many units are being added besides the CSC development.

[dwash59]

copying this from the 115 Winthrop thread here as part of the luxury housing boom/rent discussion.

Originally Posted by odurandina

i woke up and

oh dear. not sure where to post this. i'll just put it here for now.

probably deserves it's own thread. in any case, back to sleep...

http://www.bostonglobe.com/business/...VJM/story.html

I think the number of units approved without permits says a lot about current construction costs in Boston. Even with buildings under construction, I think we all have buildings we see that are moving at a glacial pace while some of the luxury buildings are proceeding extremely rapidly. An overall slowdown in units is worrying, but freeing up construction workers for some of these slow-moving projects would be nice and continue to add to our housing stock.

[bigpicture7]

Originally Posted by dwash59

copying this from the 115 Winthrop thread here as part of the luxury housing boom/rent discussion.



I think the number of units approved without permits says a lot about current construction costs in Boston. Even with buildings under construction, I think we all have buildings we see that are moving at a glacial pace while some of the luxury buildings are proceeding extremely rapidly. An overall slowdown in units is worrying, but freeing up construction workers for some of these slow-moving projects would be nice and continue to add to our housing stock.

I am surrounded by approved un-permitted mid-range housing projects in Brighton. It boggles my mind, but maybe you're onto something, dwash59.

If you can't build middle class housing on a vacant lot in Brighton, with a BPDA approval in hand, than what the heck can you do? I'm generally a pro-labor/progressive, but I concede that construction costs may be a major issue here...

[JumboBuc]

Originally Posted by bigpicture7

If you can't build middle class housing on a vacant lot in Brighton, with a BPDA approval in hand, than what the heck can you do? I'm generally a pro-labor/progressive, but I concede that construction costs may be a major issue here...

Another detail slowing down some of these projects is that construction lending standards have increased greatly in recent years, largely due to new rules passed in the wake of the financial crisis (e.g. Dodd-Frank). This makes it more difficult for banks to lend to developers putting up small- and medium-sized projects. Huge projects are more likely to get funding from non-bank sources. I was at a multi-housing conference in LA last month, and this (and Trump) was practically all anybody would talk about.

BPDA approval is worth little if you can't get financing...

[Arlington]

The Atlantic put this 2014 article into my feed this morning and I'm re-reading it re: this thread.

Why Middle-Class Americans Can't Afford to Live in Liberal Cities

In the image below, which plots affordability, the dots are 2012 votesRomney, Swing/Close, Obama.

I asked Kahn if he had a pet theory for why liberals, who tend to be vocal about income inequality, would be more averse to new housing development, which would help lower-income families. He suggested that it could be the result of good intentions gone bad.

"Developers pursue their own self-interest," Kahn said. "If a developer has an acre, and he thinks it should be a shopping mall, he won't think about neighborhood charm, or historic continuity. Liberals might say that the developer acting in his own self-interest ignores certain externalities, and they'll apply restrictions. But these restrictions [e.g. historic preservation, environmental preservation, and height ceilings] add up, across a city, even if they’re well-intentioned. The affordability issue will rear its head."

I'd offer this: the sustainable city is the constantly-densifying city. Obsessing over the character of neighborhoods hurts poor people everywhere. Development is good. The Belmont NIMBYs who opposed cutting down a 75-year old forest of tree-hugged silver maples (as if it were pristine forest primeval) to build housing that's walkable to Alewife were being *bad* environmentalists. Had not that transit-accessible development been built there, it'd have happened instead in some more-sprawly, more-pristine car-only exurb.

[FK4]

Arlington, this is very true...
Without plunging into politics (although this issue has a lot to do with govt and hence with politics), that graph says a lot about the recent election as well... reminds me also of the Common Ground, and the suburban liberals with their "good intentions" for the working class folk of the city who were forced to swallow busing and be considered backward troglodyte racists if they didn't like it. The expense of housing in liberal cities is one lens to examine exactly what the wealthy Democrats don't understand about the struggles of ordinary individuals... and as the coastal cities grow more and more expensive, there is less and less exposure to the opinions of non-like-minded individuals.

[TheRifleman]

Its all politics.

It's all Supply & Demand.
Liberals SUCK----The blame the rich for everything mean while they are enriching themselves to their rich buddies as along as they keep getting elected. They are just FAKE people

Just look at all the politicians now that are Millionaires in Washington. Its disgusting.

Nothing is FREE in this world (NOTHING)

[Lrfox]

Originally Posted by TheRifleman

Its all politics.

It's all Supply & Demand.
Liberals SUCK----The blame the rich for everything mean while they are enriching themselves to their rich buddies as along as they keep getting elected. They are just FAKE people

Just look at all the politicians now that are Millionaires in Washington. Its disgusting.

Nothing is FREE in this world (NOTHING)

Good thing your boy Trump is breaking from that mold with his cabinet appointments.