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i don't think that's the
i don't think that's the report you meant to link to.
Darn, and I was just cruisin' this morning
Sorry about that, link fixed.
Supply Problem
Said it before, we don't have a high rent problem in Boston (or really Massachusetts), we have a supply problem. We're building too slow for the economy and population increases we have. It's why the recession hit our housing market much less than other states.
The problem is the rent is too high crowd is usually the same NIMBY gentrification crowd. They want low rents and no new neighbors or structures blocking their views. The only way that's going to happen is if we model Boston after Detroit and destroy our economic base. And then they'll just complain about their plummeting housing values and lack of jobs.
Hizzonor really needs to do something to fast track as much Rental and Housing as possible, especially density along the urban and commuting cores. The city / state is leaving a lot of economic prosperity on the table as workers migrate to states where they can better buy a house and raise a family. Getting as much middle to high end build, as we see here, will help to slow older housing pricing and give middle class and working families a chance to catch up.
How is that a "problem"?
the economy didn't tank as hard here for good reasons, real estate being one of them as you point out. If you invest in buying a condo now, and the supply goes way up, your property is going to lose value, and that's what happens in places like Detroit, not the other way around. If and when people leave like you say, then the supply will go up, and housing values will go down. that of course hasn't happened, and I don't think it will.
Its not a problem
for old farts who already own a house, but it's a major issue for someone like myself who was raised here and maybe forced to move because of housing/schools.
Major issue? Forced to move?
Go earn it. You don't deserve housing in Boston over the college grad from Anytown, USA who now wants to live here and can afford it. Your parents property has probably increased value X20 from when they bought it I 1970 or 1980, maybe they can give you a piece of their property.
Don't disagree
But the flip side is a increasing population is going to create much more economic demand and prosperity for current residents, and for those wanting to move here but can not because of housing issues.
If you want more jobs, more places to eat, more entertainment, a broader tax base, and more GDP; the state and local businesses need to work together to figure out a way to alleviate the housing shortage.
The way it works now is NIMBY's, absent Landlords, and the few connected developers actually building keep supply constrained to make a personal killing at the expense of everyone else.
There's solutions that would raise all boats that need to be looked at.
Nah
Detroit's economic problem was much more structural than simply a housing market issue. As GM went, so did Detroit. MA has been getting good grades as one of the most diversified economies in the union, and that represents years of private/public work on Beacon Hill.
We have the problem that demand is high, but the only ones that can afford it are investors, high net individuals, and retiring boomers with large nest eggs. It's a population that has the ability to move easily, and also one that will be dying off eventually. It's not a problem now, bt it could pose economic issues in the future if the next generation has set up shop outside the state. They'll be less likely to be able to move back as well, even with lower cost of living, more supply, and higher salary offerings; because middle to lower income people are much less mobile.
Anyways, the idea of servicing luxury now is it makes last decades luxury just a normal apartment or condo. You never want prices declining in a economy, but you do want old housing stock to reflect the fact that it's older.
As the people able to purchase luxury trade up, it opens up housing for others that hopefully isn't increasing in value 10% a year, allowing the middle and working class to catch up a bit. You then have housing that meets the needs of every sector.
But you need to keep up with the demand. Right now the tightly controlled developer market keeps a lid on new development with the help of the government and misplaced NIMBYism. High prices and guaranteed profits are easier for them to manage than a more competitive market, that generates more wealth for all (but will also have more losers)
Yes but still.....
People moving out (or dying off as you put it), isnt really going to correlate with housing supply. The market will keep up with demand.
if the same job pays you 90% in Albany or Baltimore that it does in Boston, why would you live here?
and you say "guaranteed profit" which I don't think is true. If that were true, then you would keep seeing more and more luxury housing, and you don't see that.
Just not gonna happen
At least not in Boston. They know the formula - build a luxury condo - $10k in new taxes and no kids in the schools. Almost pure incremental revenue - very low marginal costs.
Build moderate priced housing that generates $3k-$4k in taxes -for every one kid that moves in you need about 6 apartments to pay for just the schools for that kid. A family of four needs 12 moderate priced apartments to cover the school costs etc.
We need it, we're not going to get it. The city thinks downtown is an ATM - unfortunately, I think that ATM may be running out of cash as all these apartments come online and glut the market.
blah
Still over three grand for a crappy apartment - close to three quarters of takehome pay for someone making $75k a year (solid mid-career salary for majority of Boston residents not in high-paying fields.). Whoopty effin doo.
This is why the city needs to
This is why the city needs to BUILD BUILD BUILD and allow zoning for density.
BUILD BUILD BUILD
Right - build mid-rise, all market rate housing along major streets close to T stops in Dot and Roxbury using non-union labor so there's no union thug premium and there aren't any unreasonably cheap units making the rest prohibitively expensive, get rid of busing so there's only a few problem schools instead of every school being a problem school, and you just might have some middle class folks settling in the city instead of it being the usual mix of uber-rich, trust fund babies, students and welfare crowd. Unlike Bacon Hill/Back Bay NIMBYs, dot/roxbury homeowners would love to have modern buildings with ground-floor retail along their main roads instead of the current run-down triple-deckers.
Majority of middle class
Majority of middle class Boston residents, you mean. Most Bostonians would love to bring home $75k per year.
Right
Problem is, many of those who "would love" to bring home $75K a year actually bring that in via government transfers - section 8 voucher or apartment in one of the newer "projects" that are actually nice townhouses is easily worth $2500 a month, TANF/EBT/WIC is over a grand, other perks like free childcare and free healthcare are easily another grand. That's at least $4500 a month right there - gotta be making over $80K to take that home.
Anons avoiding actual statistics
Imagine that!
The average household income in Boston is around $55,000 - closer to $70K for MA.
(source: http://quickfacts.census.gov/qfd/states/25/2507000.html)
So, $75K isn't exactly a 1%-er. More like a 30%-er
I'd also love to see any validated sources for all that "ZOMG why we aren't starving there chilldrun!!!11!!!!" crap, too.
75K a year?
That's a solid mid-career salary for somebody not in a high-paying field? I'm a 30 year old trivia host who made $38,000 from employment last year. What's your age and occupation?
Seriously, 75K? Sorry, I don't think you get to cry poor.
Not crying poor
I think the poster was simply using that as a benchmark to point out how absurd those rents are.
$75K sounds about right for a mid-career professional, actually. And if those sorts of people can't afford that sort of rent, then who the hell can?
They can afford it
Mix in a roommate or two. I sometimes have five.
lower rents for the rich
You failed to mention the rent increase in Allston-Brighton. The rent decreases were in the expensive neighborhoods.
Where it is profitable to
Where it is profitable to build (luxury units) more units have been added ad rents have gone down. Where the regulatory friction and community extortion has made it too difficult to build any non-subsidized housing profitably the rents have gone up.
A/B
Has a huge double NIMBY problem.
You have a bunch of residents that made out good on depressed housing prices because they're in a student ghetto, complaining about the students in the student ghetto forced to live off campus.
Then they turn around and shun almost all University led efforts to build new, dense student housing on/right off campus.
Throw in it being one of the only places close to downtown young professionals can afford, and you got a huge supply problem.
Good for owners looking to cash out, and good for landlords. But the city is missing the bigger picture (and tax haul) if they think this is optimal.
I think this is why Mayor
I think this is why Mayor Walsh announced this week they will be looking to re-zone basically the entire city. They're going to go for high density in areas that can sustain it as-of-right and take the ZBA out of the process where possible I'd expect, which will cut down on delays and acrimony (in theory). And you'll probably see a little higher density in the more residential areas but not enough to spark political backlash. It's long overdue.
Good luck
Most of my neighbors here in Forest Hills (JP) are beside themselves about proposed housing here, adjacent to a T and commuter rail stop. 5 stories? NO! Not consistent with the character of the surrounding triple deckers. Not affordable to everyone? NO!
As a longtime owner who couldn't afford to buy or rent here now, I'm totally sympathetic to the concerns about price point. But I'm tired of explaining supply/demand to neighbors who think that preventing any new housing--where now there is nothing, except abandoned oil tanks or used car lots--is going to solve the problem. They sure as hell don't want the city to rezone to encourage density.
Shhhh!
Don't tell anyone in Cambridge that this works. We'd rather have parking lots and single story unoccupied retail in Central Square, TYVM.