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BPDA sues Dorchester building owners it says promised to rent an apartment as affordable, but didn't
By adamg on Fri, 02/16/2024 - 1:24pm
The BPDA today sued the owners of the building that's now home to the Savin Bar + Kitchen and 14 apartments on Savin Hill Avenue in Dorchester, saying that while they agreed in 2018 to rent one of the apartments as "affordable" for at least the next 30 years, they have consistently rented the unit for more than allowed.
In its suit, brought under its still legal name of Boston Redevelopment Authority in Suffolk Superior Court, the BPDA says the agreement requires that the two-bedroom apartment be rented to people making no more than 100% of the Boston area median income.
But, the BPDA alleges, not only have building owners Kenneth Osherow and Driscoll Doconto never participated in the BPDA's program to match eligible tenants with units - which includes an income check - they have been renting the unit for $2,700 a month since at least 2021, which the authority says "is far in excess of the Maximum Affordable Rent."
In 2024, the maximum rent for a family making 100% of the area median income would be $2,567 a month; that number would have been even less in 2021.
The BPDA says it has notified Osherow and Doconto on "numerous occasions" they were not in compliance with the agreement they signed in 2018.
In its complaint, the BPDA seeks an order to void whatever lease the two have issued for the unit, make them bring it into compliance with the agreement they signed to rent it as affordable and pay the BPDA an amount equal to all the rent they have collected from the unit since they signed their agreement in 2018. In a separate filing, the BPDA says that would be at least $100,000.
The court docket does not yet specify a date by which Osherow and Doconto must reply.
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| Attachment | Size |
|---|---|
 Complete complaint | 229.61 KB |
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Comments
I always worry about this.
I always worry about this. How does anyone keep track of all those developer promises?
The P in BPDA is silent
This is a somewhat amusing example of man bites dog. The greedy pigs at the BPDA are accountable to no one. They just want the cash which will disappear into their mysterious budget. They are shocked, shocked, that a developer who played the lobbyist game to get what they wanted would actually turn around and screw the enablers themselves.
They keep track of them just
They keep track of them just fine, they just don’t care. See: the John Hancock tower and the lack of an observatory at the top.
Wrong example
The Hancock observation deck is an example of the BRA not keeping track of the paperwork.
If the city ever finds the original documents where the developer agreed to keep the top floor open to the public, then it would have to open back up.
BRA and BPDA are the same
Not keeping track of contracts is not some tiny, whoopsie sort of negligence. It is Negligence with a capital N. How many other contracts have the BRA/BPDA folks lost?
BPDA is simply a rebranded BRA. A rebranding that cost 3/4 million dollars. One of the ways that the money BPDA does pull out of developments goes to. The pockets of people who offer nothing to society other than changing a corporate (albeit quasi-governmental corporate) name.
School kids?
Didn't some Boston school kids catch out a big developer in a lie / neglected promise a few years ago?
Huh?
Why do you think this suit is happening in the first place? They were tracking the developers’ non-compliance, caught them and are taking action. If they let it slide then your constant worrying would be on point
Does anyone think
this is the first developer to do this? Is this why with the record number of units built over the last 20 years prices haven’t come down?
This doesn't lower prices
Explain more. Do you mean that the affordable units should have led to other units being cheaper? How would this happen?
Having affordable units artificially increases the prices of other units because the affordable units are sold and rented for less than what it costs to build them so the developer has to make a profit somehow and increases those prices to make up the difference.
Almost but not quite
Rents in Boston are not determined by developers' costs. Rents are determined by what the market is willing to pay.
Unless people start fleeing from Boston like they did in the 1950s to the 1970s leaving a glut of housing, rent will have nothing to do with landlords' expenses.
Developers can't admit that truth
They have to rely upon the idea that housing costs is dependent on nothing more than supply and demand of housing stock. That is the only way they can maintain pressure to have an endless stream of projects in the pipeline.
You’re over complicating it
If a developer can build a unit for 100k and sell it for 90k. They’re not going to build. If they can build for 100k and sell it for 150k. They’ll build it. It’s that simple. Don’t over complicate it with some conspiracy theory.
And what about...
And what about developers that make all kinds of promises, then sell the building for a profit? Is the next owner subject to these agreements? In Boston there is a game going on and the City Council already knows about and has had hearings. It goes like this:
-- Developer buys land
-- Developer creates a plan, gets permissions, builds, and some with restrictions like affordable units.
-- Developer sets a price and sells it to deeper pockets.
-- New owner ups the rents and cashes in.
-- Original Developer and new owner cash in, and affordable housing is lost.
That's the simplified version. It's been going on for a few years now. So additional housing as it is added to the available stock is costing more, not less.
This one was caught. BPDA/BRA needs to audit every development in at least the last 5 years to see what is going on.
Nice conspiracy theory, but ...
These things are memorialized as filings for the specific properties at the Registry of Deeds, so they carry along to new owners for the terms of the agreements (in this case, 30 years with a 20-year possible extension after that).
Whether the city is monitoring the agreements for compliance is another question, but at least in this one case, they were.
If you look at the BPDA complaint attached to the story, you'll notices it references a specific book and page at the Suffolk County Registry of Deeds, which anybody can look up (and which I did, which is how I learned that the unit was a specific two-bedroom apartment on the second floor, since the complaint doesn't say how large the unit was).
...and since these agreements are recorded,
...anyone thinking of buying a deed-restricted affordable condo or a whole building with deed-restricted affordable units, is put on notice and I would think lenders would be reluctant to take the risk of financing a non-compliant property. I suspect the level of non-compliance, while unacceptable, is actually pretty low, just sayin'.
Insurers also
Property insurance companies also look askance at non-compliant properties. They highly correlate with behaviors that cost insurers money.
Although do disagree with the idea that there is a low rate of non-compliance. I suspect that there is much more non-compliance than has been documented. That the BPDA/BRA was investigating this company may have less to do with oversight and is more likely the results of someone with the ear of someone at BPDA/BRA knowing something was wrong and getting an investigation started. That is the typical MO of the BPDA/BRA. It wouldn't surprise me if it was a HS journalism class that identified this and brought it to their attention, given what was revealed about the violation of the Garden's CBA.
Yes
All future owners are required to comply with these agreements. They are legal documents.
Feeling some empathy for this
Feeling some empathy for this guy. I am currently dealing with two rent restricted units (IDP) on the developer side. It is the most kafkaesque thing I've ever dealt with; much more demanding that buying or selling a property.
I got quotes from housing lottery consultants (because there is such a thing) to manage the lottery process for these two IDP units and they come at $20 to $30k + a few $thousand per year to maintain the wait list. Once the consultants ran me through the list of everything that they have to do to comply -way too long to enumarate here, our list of regulations is 60 pages long- I found the estimate reasonable.
Not much easier on the tenant side. Unless you have a lot of time to spare and well above average admnistrative skills, don't bother applying.
The BPDA is suing this developer for renting his one rectricted unit a whopping 5% above the agreement ($2567 vs $2700)? Great!
https://www.bostonglobe.com/2023/04/21/opinion/boston-apartments-high-re...
Yeah, I feel so bad for that developer who is...
...renting an apartment for one thousand dollars more a month than I pay for mortgage and taxes on a single family home.
*spit*
None of these
regulations or requirements are secret. Don't promise to do something if you can't manage to do something. Breach of contract is breach of contract, there isn't a percentage limit.
The laws/regulations are
The laws/regulations are written and executed in a way to ensure that the Blackrocks of the world will become the only entities that have the resources to own rentals. Be careful what you wish for. I really wish legislators, full of good intentions, would understand these things have a host of unintended consequences when put into practice in the real world.
Might be other stuff
It's been my experience that these types of programs run smoothly. I think there must be circumstances here that aren't shared with us. Why would the owners not comply?
The agreement to have the lower rent seems to have been signed after the project was finished. This is a delay, I think, to what's usually done. Usually it's part of the permitting part, no?
It appears the units had all been rented out at market rate and then the BRA had to get the discounted unit arranged after it was occupied. Weird.
You know, it used to be that in order to get zoning appeals approval you had to build these discounted units and it looks as though they actually didn't need to go before the appeals board. Then there was some sort of BRA decision that the developer did need appeals approval so the BRA had to claw it back.
I am curious to know about
I am curious to know about what makes you think that these types of program run smoothly. In my first hand experience it is the complete opposite. And I don't seem to be the only one; much more seasoned professionals have the same issues.
Quote from a recent article in real estate publication Bisnow:
"The city has been working to address delays in its affordable housing process for years, and developers told Bisnow last month that it still often takes more than a year after completing a project to fill the income-restricted Inclusionary Development Policy units in their buildings. This not only leaves people who need affordable housing waiting while units sit empty, but developers said these empty units make it more difficult for them to sell or refinance their buildings."
For those interested in this topic, the whole article is worth reading
https://www.bisnow.com/boston/news/affordable-housing/were-caught-up-she...
I don't know
You're probably right.
Want to lower rents?
Kill the economy! Once that happens, nobody will want to stay here after college/grad school or move here from elsewhere in the country or the rest of the world. Once that settles in, the dream of 70s/80s Boston will return along with all other nostalgic truths around “community” and voila, dirty old Boston is back and the vacancy rate will skyrocket. People need to come correct and recognize that their memories of when Boston was so much better are no more valid than the median MAGA fanatic pining for 1950s America. It wasn’t that great