Today’s Newton Tab featured an article by Jim Morrison about the increasing rate of “teardowns” – older, mostly smaller houses, being demolished and replaced by much larger and more expensive houses.
Alderman Vicki Danberg is quoted about how this accelerating rate of teardowns is changing the overall mix of our housing stock. As the smaller houses are replaced with much more expensive houses, Newton is slowly becomes a community with less and less room for any but the wealthiest of home owners.
I’m pleased that Alderman Danberg has raised the issue. As she said “the City and its residents need to provide some guidelines as to what is of value to the City and what is not”.
I think there are at least two important and separate issues worth discussing – the value of maintaining an economic mix of housing in the city, and maintaining the character of neighborhoods. Both of these goals run up against the value of letting homeowners do what they like with their own property and maximizing their property value as they see fit.
The only regulatory check on teardowns that the Tab article mentions is the Historic Preservation Commission. The commission reviews the demolition of any house older than 50 years. If the commission deems a particular house historically significant they can order a 12 month delay before it can be torn down. In many cases that just delays the demolition and drives the cost up, in others it may tip the balance and prevent a teardown.
Here’s my personal take on the issue. Historic preservation regulations are clearly not intended to deal with the general issues of affordability and maintaining neighborhood character, and trying to use those regulations to generally slow down the rate of teardowns is misguided.
The vehicle for dealing with the issues should be zoning regulations. Zoning regulations by definition are our collective rules for balancing property rights against community values. Zoning rules inherently put some restrictions on what property owners can do with their property in return for maintaining some desired qualities in our housing stick. The current zoning rules break down in to a few broad categories, none of which really deal with the issues mentioned above.
* Zoning Districts – a given piece of property is within a specific type of Zoning District that limits what can be built there. If your house is in a single family home district, you can’t tear it down and build a retail store – even if you would make more money that way. These zoning districts are a very broad way of maintaining some semblance of neighborhood character.
* Setbacks – There are various rules about how close your house can come to the edges of your property. These rules limit the size of a house you can build in return for maintaining a certain level of consistency in housing and also to prevent your house from impinging too much on the abutting houses.
* Floor/Area Ratios (FAR) – these rules limit the total square footage of a new house to the size of the house’s footprint. Once again, these rules trade owners ability to build as big a house as they want vs the community’s value of housing consistency and protecting abutter’s properties.
Much of the talk in recent months has been what (if anything) should be done about the growing number of teardowns. I think that’s the wrong question to ask. Other than unique historic properties, teardowns are not the real problem. In fact teardowns are often a very good thing. They’re a way of renewing our housing stock and replacing older buildings, often in bad shape, with new better housing.
I think that the missing component in our zoning regulation is the explicit recognition that all neighborhoods in our city are not the same. In a street of 2000 square foot houses, a new 4000 square foot house will stick out like a sore thumb, and change the character of the entire street. Likewise, that 4000 square foot house will be at a much much higher price point than the house it replaced.
In a different neighborhood that same 4000 foot house would fit right in with the houses around it and be in the same price range.
So how could zoning rules address those sort of issues? I think rather than only limiting house size by FAR and setbacks, I believe that the zoning rules should also limit replacement houses to some multiple of the torn down house’s size. How big should that multiple be – 20%?, 50%? I don’t know. That’s a matter for broad discussion by the community.
Though its an entirely new concept for our zoning, there’s nothing radical about this idea. Current zoning law doesn’t allow you to build a 4 story house or a gas station next to my house, even if it would maximize your property value, because that would negatively impact my property and change the character of the whole neighborhood. Likewise this proposed teardown/rebuild ratio would similarly limit the size of the new home so that it doesn’t negatively impact my property and change the character of the whole neighborhood.
Here’s a few questions for you all:
* Should we be concerned with maintaining an economic diversity of housing in the city or should we striving for the highest possible property values of all property in the city?
* Do you believe replacing a modest size house with a much, much bigger house is a good thing or bad thing for a neighborhood?
* Do you think tying a replacement house’s size to the torn down house’s size is a good idea or misguided?
Hi Jerry–this is a very important issue, but lost in your analysis is the reality of affordability.
In a market (Boston) where the demand for housing far exceeds the supply–the cost of even the small houses on lots of any size is going to skyrocket. So just preserving the neighborhood’s small homes won’t preserve affordability, just the smallness of the homes.
Frankly, someone in the market for a home will want more than a shoebox for his/her $600k+
Newton can’t build its way out of the problem, either, because the demand is for the Boston region.
An article or two to further illustrate the problem:
http://www.boston.com/realestate/news/blogs/renow/2014/05/the_illusion_of.html
and yesterday’s globe–Paul McMorrow column (the link: https://secure.pqarchiver.com/boston-sub/doc/1528422723.html?FMT=FT&FMTS=ABS:FT&type=current&date=May+27%2C+2014&author=McMorrow%2C+Paul&pub=Boston+Globe&edition=&startpage=&desc=Build%2C+Boston%2C+build)
Andrea – No, certainly what I’m suggesting doesn’t solve Newton’s affordability or economic diversity issues.
I think it’s patently clear though that if you tear down roughly 100 modest size houses a year and build replacement houses that are 2 or 3 times bigger, we’re making an existing problem worse.
Those modest size house represent the bottom end of the Newton housing market, which is already very expensive. If we methodically replace those houses with much bigger ones we’re quickly shrinking that (already very expensive) bottom end of the housing market.
Let the market decide. What may start out as one 4000 sq ft residence on a block may, over time, end up as the norm. Such is the case in my neighborhood over the 14 years I have lived in my current home. If that is what people want and what they can afford, they should be allowed to pursue these desires. By and large governments at all levels are populated by individuals ill equipped by training or temperament to engage in the type of social engineering folks on these blog are advocating, no matter how well intentioned. Where expertise does exists it either goes unrecognized by those making decisions or ignored. The simple, most effective, and most fair solution is for government to get out of the way for all but the most egregious offenses.
@Elmo – Would your “let the market decide” philosophy also extend to the existing zoning rules.? i.e. would you advocate dropping the zoning districts, setbacks, and FAR rules or would you keep some of them?
Jerry, I think your point about teardowns not being the problem is a good one… it’s what replaces it that matters. If it’s any small consolation, new buildings are required to meet the stretch energy code, where Newton was an early adopter.
Work was done by a task force a couple of years ago to attempt to solve the McMansion problem, but it’s not as easy as it seems. I wonder how much it has changed things? And now, the FAR regulations are pretty difficult to interpret without a professional consultation, and there are additional rules on open space. Your idea about percentage change is an interesting one, but I’d imagine it could make things incredibly complicated. There does seem to be explicit recognition of differences by neighborhood now; that’s what the different residential zone categories are all about. It sounds like your proposal is intended to make the changes more localized and gradual, but wouldn’t the end result be the same? Is it our zoning that’s wrong? Finding the right mathematical formula to apply to all housing stock is a really tough problem.
I do worry very much about the diversity of our housing stock, but as long as a neighborhood is zoned as, say, SR-2 or even SR-3 in south Newton combined with large lot sizes, it’s pretty hard to see economic forces at work that would preserve “entry level housing.” Is $500-800K even all that affordable to professionals? Chris Steele tweeted some really interesting statistic on that, but I can’t find it… perhaps he’ll post it here.
It’s also more than floor area. New houses are often built to very different vertical dimensions than old ones. In fact, the building code often requires it. Those of us in older homes can’t imagine 6’6″ clearance on stairways, or ceilings higher than 7 or 8 feet. Add the wrong roof line and a house can tower over the neighborhood. It’s also the finish that sometimes makes people cringe — like those stucco homes built among older style shingled homes with details that just don’t fit in. The historical commission sometimes gets to weigh in (only with the threat of a delay) but only the older home was deemed to have historical value.
@Jerry: Yes. Bad thing. Good idea.
Even if a small house in Newton is still expensive compared to a small house further away from Boston, it’s still less expensive than a big house in Newton. Smaller houses provide options for single people and hildless couples including empty-nesters, which is important because it’s not fiscally sustainable to have most house sending kids to schools most of the time. It’s like a health insurance plan with only sick people and no healthy people to spread the cost over. And if we want economic diversity among families, we need to preserve smaller houses for people who are willing to sacrifice space and a bathroom for every kid, in order to live in Newton. Previous generations, and most of the rest of the world, don’t need a 4,000 square foot house to be happy.
I think besides tightening FAR in absolute terms, limiting the percent increase from an addition or replacement house is an excellent idea. I would say no larger than a 15% increase. It would allow modest expansion by residents, and allow an old house to be replaced by an energy-efficient new house if retrofitting was not an option. But it would discourage teardowns by developers because the profit margin on a small expansion would probably not be worth their while. And it would preserve more modest size houses for people who actually want to live in them.
This blog got 30+ responses on why people chose to live in Newton. There was no outright admission that we did it to grow value instead of lose it either to inflation or outright devaluation of our real estate value. If you did a similar thread on why people LEFT Newton, with some honesty, people will admit their home was worth more then they ever imagined and they took advantage of it.
So, someone in that split ranch that magically became a million dollar investment should not be punished by our disdain of certain 1%ers that want three times the amount of space on the same footprint — within reason. Within reason means the FAR rules we already have, the one’s that are part of our contract as investors. Change that contract and you’ve upset the investment, costing families money in one fell vote.
We’re going overboard with this talk because we’re hiding within our ideals that include the American Way and prosperity
@Adam – Thanks for the shout out. The stat comes from the City’s ongoing work to update the Consolidated Plan, which puts forth how we will spend federal CDBG, HOME, and other funds.
The presentation included on the City’s website notes that median home price in Newton is now $739,000. Under HUD guidelines (which suggest a maximum % of household income for housing), a family would have to be making an annual income of about $200,000 to afford this median house. (See slide 43)
Glad to see a police officer and a dental assistant can get a $740,000 home. Good for them
@Jerry, once again you have offered a well written and informative article. Thank you. Your attempt to make clear the historical and current status is helpful. Given that, I, for one, do not agree with your position of not fearing further urbanization of Newton that you have stated in other threads. We must have different visions of urbanization. I do not understand how someone with your concern, leadership and actions to enhance Newton’s village concept would want a more urban Newton.
Lost, or left out of this discussion, is the fact that Newton has 13 villages with different characteristics. I would hope that people are not looking to homogenize the distinctions of our villages. Diversity can work at the city level and still maintain various village characteristics.
Also, I do not agree with the concept of limiting the size of new construction to a percentage of the teardown. My neighborhood was initially composed of capes and ranches. Over the last dozen years many of the houses have been replaced with 4,000 – 6,000 sq. ft. houses. If I was limited to a 50% increase of my 2,000 sq. ft. house to a size of 3,000 sq. ft., it would still be significantly smaller (with less tax value) than the newer houses. Your proposal would only work if implemented before the “McMansion” wave started. Any changes to existing regulations need to take into account present day reality.
I am not a big fan of “McMansions”. Yet I would take five of them built on the St. Philip Neri site in lieu of a high-density 40B development that is presently being supported by the city (at least according to one website).
Jerry,
I don’t think I’ve ever before heard the argument that replacing a small home with a much larger home negatively impacts the surrounding homes. The conventional wisdom is that it positively impacts the value of the smaller homes in the neighborhood.
Putting that aside for a moment, I’m torn between the premise that the property owner should be entitled to maximize the land to its best use versus the rights of other property owners to ensure the harmonious character of the neighborhood. Aesthetically I strongy dislike the look of enormous homes which are out of scale to their lots. To me that look like trophies on a sliver of grass On the other hand, I am empathetic towards individuals whose only real investment and savings consists of the equity in their homes, and their need to maximize that at the time of sale.
Anecdotally, when we were shopping for a home in Newton, we found a lovely old home on West Newton Hill. Unfortunately, the owner of the property had neglected some issues and my crack inspector discovered significant structural damage causing us to back out of the deal. The owner, an elderly widowed empty-nester didn’t have the resources (then about $100,000 just for structural work) to repair the home to make it saleable and ultimately sold the property to a developer who, not surprisingly, built an enormous addition and sold the property as two condos. For that particular seller, she was in a catch-22 situation since she had to disclose the defects disclosed by the inspection leaving her with the choice of drastically reducing the asking price or turning to someone who could invest substantial resources into the property. On the one hand, I dislike what was done to the property, but I’m also glad that the owner was able to maximize her investment in Newton. Catch-22.
Me again with the link:
newton.wickedlocal.com/article/20140528/NEWS/140526420
@Hoss – I’m not sure where your talk of “punishing homeowners”. “disdain of certain 1%ers”, “real estate devaluation” is coming from.
I live in a house that can’t be significantly expanded because of the lots size and the fact that it’s in a Historic District. The value of this house continues to rise at a steep rate even though no expansion is possible. Yes, if it could be expanded it would probably rise even more because it would be a teardown candidate. Regardless of zoning, or limits on expansion there’s no real estate devaluation anywhere in sight.
As for “disdain of 1%’ers” – I think you’ve got that backwards. No one’s, voiced anything of the sort. Newton under any circumstances will be home to a large number of 1%’ers, that’s a given. The question is whether being only 1%’ers should be our ideal or not.
By that logic, zoning rules can never be changed. The existing FAR rules – i.e. “the contract” were changed as recently as 2011.
I think where we do agree though is that any changes to those zoning rules must be done very carefully and deliberately because ALL zoning rules by definition are crimps on a purely free market and can potentially effect people’s biggest financial asset.
@Emily Costello – Thanks, I just added the link to the original post.
What about when a developer knocks down an “average” house in a neighborhood, and creates a THREE HOME town home?? That is what is happening near me. The seller just sells, and then the developer can make three small homes instead of one. A win for the developer, and a loss for the neighborhood who had a house with TWO cars and now SIX cars live there.
If smaller homes are knocked down, we will become the next Weston. We will not have new families who are not wealthy in the town. We will become less diversified. I am an owner of a house with 1,200 square feet of house. Yes, four of us live there, and we are happy. We are happy that we have neighbors that have houses that range from 1,400 to 2,000 square feet, and the MONSTER of the house down the street looks out of place. But if we keep knocking down smaller homes to build LARGE homes, people like me will never move here. Didn’t look in Weston, because we could never afford it.
Part of the charm of Newton is the diversity, which we will lose.
Moderation in all things. I do support zoning rules. I also support the idea of folks having a right to modify their homes. Zoning should be there to moderate but not control. If my neighbor wants to build a McMansion, then fine, to a point. But setbacks should apply.
For those of you who want complete freedom, I say you haven’t lived in Texas or Florida, where zoning is far more relaxed, and you can build a processing plant a few feet from residential homes. For those of you who think city government should take a firm hand and restrict to 15% or similar numbers, I think you are neglecting the neighbors on my block who all added additions that allowed them to stay on my lovely street with additional kids. I love those homes and those neighbors, and what they did was tasteful and added to my own home value (which is pretty great too…)
It’s my understanding that the fifty-year age standard for designating a building as historical and triggering a construction hold has itself been in place for about thirty years. Is that correct? If so, it now encompasses a lot of quick-and-dirty post-World War II housing that was never meant to last, and that looks very much the same from coast to coast. If the criterion were reset to a specific year, say, 1935, if that was the original conception, then that would allow a stronger, more meaningful focus on preserving the nineteenth- and early-twentieth-century structures that truly are part of Newton’s distinctive architectural heritage while considerably enlarging the pool of houses eligible for immediate reconstruction or replacement. Does that strike anyone as a reasonable compromise?
@Amanda Heller – I believe the 50 year age does not trigger a construction hold. It triggers a review by the Historic Commission to determine whether the house is historically significant enough to put a one year demolition delay in place.
Jerry Reilly–Thanks for the clarification. Nevertheless, I still think it would make sense to replace a standard that has no fixed meaning with one that draws a clearer line between what (if anything) the city wishes to preserve and what it wants to leave open to change or development.
@Amanda – I think there’s two different possible philosophies. One is “let’s review any older buildings (>50 years) before knocking them down in case they may be of some historic value”. The other is “there’s a specific period in the city’s history that we’re trying to preserve”.
It sounds like the Commission has the the first philosophy and you’re suggesting the 2nd.
I think for the citywide Historic Commission either one makes sense. Where it gets a bit stranger for me is the local Historic Districts. For example, Upper Falls created a Historic District to try to preserve it’s unusual 19th century mill village housing. Yet the UF Historic Commission also has jurisdiction over any house older than (50? years). Their jurisdiction is much more invasive since they approve/disapprove any significant outside changes to houses.
So in the 19th century mill village you can potentially have the commission issuing decisions to maintain the historical fidelity of a 1960 house. It seems a bit wacky to me.
Thank you for the informative and insightful post. Preserving the community and character of Newton is certainly a desired goal. Newton has a diverse income base, although a rising one, and that is good for everyone. Keeping it that way is a challenge because the city must satisfy the homeowners rights to increase their investment made in a home and other homeowners desires to keep their smaller home neighborhoods. Letting the market decide won’t work because unfetterred capitalism creates an economic beast. I watched a neighborhood, in another town, with 50’s, brick or shingled ranches fight the replacement of a tear down by a 3 story, 3 garage McMansion and lose. Other homeowners had added space with extensions that did not alter the feel of the neighborhood, so the 15% zoning restriction may not be the answer. Hopefully some compromise can be found to partially satisfy both groups. Change happens and is, in fact, the only thing we can really count on.
Today I had the opportunity to ask a person who is in the real estate speculation/development business in Newton why there is a predominance of stucco houses being built. I asked her why she doesn’t build brick houses or wood houses? Why are almost all the new houses that are being built stucco? Her answer to me was because they are cheaper to build and cheaper to maintain than wood sided houses that have to be painted every 5 years. I found this interesting. It has become extremely lucrative for people to purchase an older/small house in Newton for under $700K and to then construct a 4000 sq ft stucco house on it in 6 months at a construction cost of around $400K and then sell it for $1.7 million. The profit is around $600K per house! If you do two of these projects per year it is pretty profitable. A lot of the people orchestrating these new developments aren’t even licensed builders! They subcontract it all out.
Newton Gal,
You’ve got that absolutely right. That’s the game.
These fake stucco houses don’t need paint but if you look carefully after 5 years the large panels of insulation over which the”stucco” is applied start to separate at the joints revealing themselves.
Blueprint Bill-Is there a reason that these new stucco houses are all beige in color or some other light shade of color? I never see blue or yellow or any other colors of these types of homes except for beige it seems? I was also told by another real estate developer in Newton about the “Three Fours” rule of building that the builders used to live by up until recently. They would want to buy a house/land for $400K, Spend $400K building the new house, and then they wanted to yield a $400K profit. It seems that the bar has been raised lately where they are willing to pay $675K for a ranch, still spend the $400K building the new house, and then they want to reap approximately $600K. Capital gains laws require that they reinvest that profit ASAP into another project within 6 months or else they pay large capital gains taxes so that is why these builders/speculators are rabid to buy up these smaller houses and often have bidding wars for them. It is not uncommon nowadays for there to be multiple offers on one of these potential tear down houses by builders who will pay in cash and offer to pay $5K plus over the highest bid. I don’t know where else a person can make $600K profit in just 6 months and the only tool they need is the credit line and a minor amount of business savvy to see the project through. It is an extremely lucrative business in Newton and the barriers to entry are fairly low when you consider the profits to be made.
Folks, given all the talk about investments, depreciation, exploitation, development, re sale value etc,.. for just a minute try and take a long view,.. 10 -20 years out. What will we be left with if the tear down phenomenon is curtailed ?
Just maybe we might be the inheritors of a more valuable, greener less dense and traffic ridden community, diverse in population, that people will aspire to want to live in and be willing to pay a premium to do so. I’m not convinced that there is a cost for a less dense village centric environment.
Newton Gal (and others),
One way we could prevent teardowns and fake stucco would be to have the city pay the developer $600K to go away and leave the house as it is. Maybe she’d take $300K (no downside risk).
Would that be a good use of city funds? Of course not. Then why is a market-distorting (but “free”) restriction a good idea to accomplish the same end?
Let’s not do indirectly what we are not willing to do directly.
Sean- I would be willing to use CPA money to buy back some of these tear down houses and then sell them to people who want to live in them as is. The people who bought the houses would have to sign a contract that said when they sold the house in the future it would have to be sold back to the community for a price that did not exceed increases allowed for by using the consumer price index as the determining factor. I think this would be a wonderful use of CPA money.
@Sean – That sounds like a pretty absolutist argument against any type of zoning at all. Virtually all zoning rules affect property values.
In Newton, as you can see in these recent threads, there are people all over the map with their opinions on development. Despite that, I think you’ll find that they’re nearly unanimous about the desirability of some kind of zoning.
Even the most pro-growth advocates aren’t advocating for the right of your neighbor to build a food processing plant next door, if they can make a bit more on their home sale.
Good luck with that 😉
Jerry,
There is definitely a place for/need for zoning. I’m a big proponent of form-based zoning. Let’s see if I can articulate a doctrine distinguishing bad from good zoning and you let me know if it holds up.
I’m against any residential zoning the purpose or effect of which is to exclude certain groups from living there. Impose density maximums and you exclude lower-income (and other) residents. Impose lot-use restrictions, you exclude higher-income residents. Impose both and you distort the market to a fare-the-well, creating all sorts of consequences.
Setbacks, design guidelines, and other more modest zoning rules might constrain homeowners and developers, but they are unlikely to materially change the category of residents who may choose to live there. (I am definitely not concerned about the possible consequence of discouraging someone from living in an area on aesthetic grounds.)
How does that work for ya?
Note I only address residential v. residential zoning. Your food processing plant argument is outside the scope of the conversations we’ve been having and will have to wait for another day.
@Sean – It sounds like you may be changing your argument on me. Up above (and elsewhere) your objection was that the zoning rules amounted to an unfunded mandate – i.e. the problem with the zoning rule was that it cost the homeowner money and limited how much they could get for the sale of their house.
That’s as much true for a guy who’d like to sell is house to Hormel for a nice new Spam plant on a residential street.
Jerry,
I’m not (changing the argument on you). You’ll have to trust me on this. When I refered to what you are aptly calling an unfunded mandate, I was just considering the anti-teardown argument in the context of replacing the torndown with a McMansion, not a Hormel plant.
In that case the uses are the same: residential replaced by residential.
You are right that the unfunded-mandate argument could be extended to where the uses are not the same: residential replaced by pork-processing. I’m just not making that argument.