A must-read page one story in the Globe today reports on a new Boston Foundation study that examines the reason why housing for average folks isn’t being built not just in Newton, but across the state.
The study found that surging land costs, along with the already-high price of labor and materials, make it nearly impossible for developers to build new housing most Boston-area residents can afford.
Left unchecked, the report’s authors said, the trend could turn the Boston area into a land mainly of luxury and low-income housing, with no home for the middle.
“Unless we can find ways of bringing down land costs, zoning costs, construction costs, it will be almost impossible for any developer to put up housing in Greater Boston that working families can afford,” Barry Bluestone said.
Haven’t read the article yet. But my experience has been that environmental restrictions–along with onerous local zoning ordinances, have rendered a lot of developable land, permanently un-developable. When government takes thousands of acres of undeveloped land off the table for housing development, you end up with a housing crisis.
It’s becoming NYC.
This article/study highlights exactly why we need to do a better job at negotiating deals such as Austin Street. If the decision is made to surplus public land at a significant discount for private profit, we ought to do a better job at developing housing for those whom we have identified need it most.
Decouple residency from school assignment. Then someone could live in more-affordable Brighton or Watertown or Waltham and still attend a high status school. Property values here would decrease but affordability would increase.
Of course this will never happen, because people want affordability AND high property values.
Completely agree with the gist of the article.
And its a criticism that I’ve highlighted here for supporters of affordable housing who claim they want a diverse community in Newton. As the Globe article highlighted, our current policies will leave Newton with housing options for the high and low end of the salary scale, and squeeze out the middle class. People who support tear-downs that take away from our $500K-$1M housing stock are only further exacerbating the problem.
I take issue with people like Hess-Mahan who support affordable housing, but not restrictions to keep our slightly less affordable housing from being torn down for mega-mansions. It doesn’t make sense.
A lot of this reflects the decline of the middle class generally and the increasingly wide and insurmountable income and living style gap between all classes. We talk incessantly about the difficulty young people have trying to move into Newton and the difficulty many elders and moderate income folks have staying here.
How many people reading this blog could afford to buy the house they currently live in? A house down the street from us just sold for well above the asking price of 900 K to a high powered professional couple who also own properties in other cities. When I was a kid, the owners of that same house were a wall plasterer and his wife who worked part time cleaning houses in the neighborhood. Not everything was peace and light in our neighborhood, but lawyers, accountants, plasterers, plumbers, engineers, police, fire and others each saw the others as neighbors and most often as friends and someone they would take time to talk with. A lot of people in Newton are working to maintain or reintroduce this sense of community with housing, social and small business programs. I see a lot of this striving in my area council and in other civic type endeavors. But I feel we are always trying to sail into a very strong and intractable headwind dealing with a society and a system that sees the bottom line as the beginning and end of everything. No matter how much money relocates to Newton, we will be a much much poorer place socially and spiritually if the middle class continues to abandon this City.
The problem in Newton: the sentimental and willfully perverse belief that somehow we can ignore or reverse market forces and preserve the promise of detached housing for middle-income families. We can have a Newton with middle-income families (maybe) or we can have a Newton with (increasingly large and expensive) single-family homes. But not both.
Do we want to preserve the mix of people? Or the mix of housing stock?
Ted Hess-Mahan, Superman. Bending the real estate market to his will.
Seriously, Paul, what do you expect Ted and the other -critters to do? As the Foundation report makes clear, land is incredibly valuable in the Boston area. So valuable, that it makes economic sense to buy a perfectly good house and tear it down for a fresh building lot. Not here or there, but all over Newton. You prepared to deny selling homeowners the market value of their homes (lots?) to provide cheaper housing for others?
What you are proposing is a thinly veiled subsidy that falls on a limited set of homeowners. If it is worth it to provide middle-income housing, then let’s spread the burden. You willing to pay a tax that would cover the difference between a home’s market value and what a middle-income family could afford?
Of course, one way to minimize the impact of the high land value is to spread it across multiple families. Like with a taller building that could house more than one family. There’s a word for that, I think.
@Sean: We need a multii-pronged approach to keep Newton affordable. Not prevent homeowners from selling their homes and receiving a profit – but also not to be forced to accept high density projects where the majority of the units built are market rate and not affordable. That sort of defeats the purpose, right? This means making the tough calls – hunker down on the tear downs of what is left – of the modestly priced smaller homes and control what is built in it’s place AND allow for modest increase in density where the infrastructure is in place or can be put into place to handle it. There cannot be one without the other.
@Sean
Where is the data showing that homeowners are realizing additional money when they sell to developers?
I follow our real estate pretty closely, and haven’t seen any trend that supports it. In an efficient market, the developer only needs to outbid a prospective buyer for the actual home by $1. When you look at actual sales of tear-downs, they rarely sell for more than $600-800K, and the homes built typically exceed $1.5M. No question that there is a market for high-priced homes, but the initial homeowner isn’t realizing the benefit. If you have actual data that suggests otherwise, please share. Otherwise, its just speculation.
Meanwhile, the developer is making a pretty penny, and part of the profit is realized by creating negative externalities in the local neighborhood, when they build a house so out of character and scale with the rest of the neighborhood. You can just as easily argue that the houses NEXT to the tear-down house are being forced into subsidizing the value of the tear-down home, as prospective buyers for the adjacent houses would be dissuaded from buying them with a gargantuan monster next door. Don’t those neighbors have a right to protect the value of their properties too?
Paul and Amy,
I couldn’t agree more!
Amy, I agree it is a very tough call. And the details are the key as you know. When folks say they are going to restrict tear downs, does that mean the ranch homes in my neighborhood? Would a new buyer be permitted to put on an addition? All have large lots. Would you restrict the addition? If you restrict the addition AND the teardown, you effectively lower the value by at least a few hundred thousand, as each house needs hundreds of thousands of work to bring the homes up to modern standards, and each is small by modern standards. If you want to maintain the moderate priced housing stock, as you say, you need to really clamp down on the restrictions. Otherwise, the house doesn’t get torn down, it just gets a 2 story addition on the back or the side. And the moderate priced new home quits being moderate priced.
I’d also argue that what you are doing is unfair. Just major changes to the zoning code for the residents that have lived in Newton the longest is a governmental taking. How about the residents like myself who may want to do a moderate redo on their kitchen or second floor to increase floor space or deal with a growing family. My home is moderately priced by most standards in Newton. If I do that work (which won’t increase my land footprint more than a few feet) my home value would jump, likely past $1,000,000. Do I need to move to satisfy the new rules? My kids have never known another community, and I likely can’t afford another home of similar size in Newton with such additional space, but I can afford the moderate addition/repairs. How tightly are you going to lock in current residents? How about if my neighbors would rather keep me as a neighbor and are willing to sign a waiver? Do I still need to move?
You state that you are ok with moderate increases in density. I’ve never heard you or any other aldercritter who generally opposes development state what that means. Is that 5 units? 10 units? 20 units? Will you actually support such a project when the first neighbor complains? Can you point to any project of moderate density that you’ve approved. I don’t mean to challenge you personally over the other aldercritters, as I applaud your willingness to post and your upfront nature. I’m just asking you to flesh out your standards. Because I think it is very important to figure out where there is middle ground.
Nothing here is easy. Define “tear-down”, define the restrictions on additions and footprint, define the loss to current owners, define moderate density. THAT’S when we’ll all find out just how difficult these changes are going to be. Otherwise, what we’ve got is a bunch of folks using teardowns and McMansions to drive public opinion, but a real lack of honesty of what the proposed changes will mean to current Newton residents.
@fignewtonville: I answered all of those questions during the moratorium discussion. Remember? It was a temporary one-year or less restriction on tearing down a home. The idea is to have zoning regulations that address the monster sized homes. Oh right – we have some already in place and it looks like the replacement houses are just as big if not bigger. I’m wasn’t advocated that no house should ever be torn down. Let’s just get a handle on what will replace it. My goal was to move forward with Zoning Reform Phase 2 as soon as possible so we wouldn’t continue to lose so many smaller sized homes that were replaced with the McMansions. So would McMansions be prohibited? Not necessarily. The replacement homes would just have to go through a review process to ensure they were at least designed and built with some scale of the neighborhood in mind. The hearing for that was October of last year and we still have not begun Zoning Reform Phase 2. I would have loved to flesh out all of the details with my colleagues on the Board but we couldn’t even get it to an in-depth discussion. And the moratorium item wasn’t just about addressing the single family McMansions.
It was also to spur action on several other items already filed by my colleagues – including Ted Hess Mahan and Brian Yates’ items related to the definition of “two-families” – which – we’ve seen has been exploited over the years. Not only have the two-families – really not been constructed in the traditional style of shared common wall or floor – they are basically two large separate houses (more like attached dwellings) that are squeezed together on a small lot and are sold for over $1 million each. Thankfully, we recently passed the amendment dealing with two-families but there are still other issues that need to be addressed while we wait for the 2nd phase of Zoning Reform.
I had also filed a docket item for the City to consider creating a housing production plan – which is what many other communities in Massachusetts have to help shape where new growth can and should occur. It is a planning tool that not only commits the municipality to building a certain number of units per year – but also helps stems off the 40B development projects from popping up in sometimes odd locations and that’s only if the State accepts the municipalities’ plan and if the municipality is able to hold good on its plan and actually does develop housing units.
So when I talk about adopting a multi-pronged approach – I mean it. I really do not believe we can just continue to allow market forces to dictate what is being built. All we will
have is very high end and “affordable” housing with nothing in the middle.
Where have I voted for increased density? The Myrtle Baptist Church project (funding), I think almost every Can-Do proposal (special permits and funding), the multiple unit development on Auburn Street (special permit), Engler’s project on Lexington Street (funding), the new and improved Kessler Woods project….
And Fig: Nothing here is easy and I don’t profess to have the answers. I am just trying to make the case that we need action now and that action should not be singly focused on building without regard to protecting what we have now. I agree with you that there is a middle ground – but both sides of the development/density issue need to come to the table with level heads and the willingness to find that middle ground.
A teacher, a doctor, and a developer walk into an open house. (Stop me if you’ve heard this one before.) There’s no zoning restriction and the developer is willing to pay the market rate for the lot itself (plus the demolition costs to return it to its buildable lot status), because she’s got the capital to invest in building a big home.
Scenario B, there are zoning restrictions that prevent a teardown, but it’s still possible to build a sizeable addition. Let’s say that discourages the developer. (Recent projects in my neighborhood suggest otherwise.)
Scenario 3, the magical zoning fairy (or Super Ted!) crafts zoning that limits what can be done on the lot so severely that both the doctor and the developer pass.
Is there any question that the third transaction will have a significantly lower price? Under what conditions does limiting deep-pocketed potential buyers not drive prices down?
If we assume that a teardown/rebuild imposes a specific externality — namely, that other lots on the street will become less valuable — then streets without big-ass homes would be more desirable, perversely driving the teacher out of the market. Also, there would be a saturation point for teardowns. But, I’m not buying the premise. Point me to a single street in Newton that seems to be suffering that affliction. The opposite happens: teardowns begets teardowns.
Any legislation that intends to hold a price down provides a subsidy to the buyer at the expense of the seller. (If you buy the externality argument, its a subsidy to the buyer and the neighbors.) If we think that subsidizing middle-income housing makes sense, then lets make it a direct subsidy through a tax.
Of course, our zoning is a big price-fixing, cartel-creating market distortion. All incumbents get a huge benefit from the artificially low density we have in Newton. Now, were stuck with the natural consequence of that distortion and we get pearl-clutching about how we’re losing the vital middle-class.
Amy, if we really want middle-income families, we would, unfortunately, need massive amounts of density. That’s the sad conclusion of the Boston Foundation report. The price of land is so high that it doesn’t make economic sense to build middle-income housing. There is nothing the Gang of 24 can do to force a developer to lose money. The only way to drive down land price per unit is to increase the number of units.
Boston, to its credit, proposes building thousands of new units. Newton is riven by the prospect of a few dozen in one of the few places we can do it without tearing down existing stock.
While I was still trying to untangle my cape, Sean delivered a brilliant response. Extra points for the deft use of “pearl clutching” in a sentence.
@Sean
Hypotheticals are not data. For the record. But let’s continue the discussion.
“The opposite happens: teardowns begets teardowns.”
Ah, this is the key point.
One the first tear-down is built, the neighbor next door has fewer prospective buyers interested in their home. Only the developer. The home is less attractive next to the monster, so the developer gets a better price bidding against fewer buyers.
As to your scenario B, I’m OK with zoning restrictions that aren’t too draconian– modest additions (20%) with sufficient space around the edges of the lot would be a significant improvement over today’s zoning regulations. No need for a Super-Ted. Just a Ted that supports zoning regulations like that.
“A teacher, a doctor, and a developer walk into an open house. ”
I think this is where folks are getting immune to the numbers. The doctor can’t afford much more than the $800K home. Not when you factor in the regular $100-200K in renovations. Allow them a modest addition as well, a la your scenario B, and they’re over $1 million. That’s more than they should be spending on a home, using traditional rules-of-thumb and average income for the doctor or lawyer. Its the finance types and CEOs that afford the $2 million plus home. I don’t have anything against them. But we’re not really even talking middle class anymore in this discussion. This about whether homes are affordable for the top 5% of income. Really the top 2%. A tangent to the discussion, but its worth keep people focused on the reality.
@Sean:
Scenario A: The Teacher and the Doctor don’t have a shot at the house because the developer finds out about the house for sale sometimes before it even hits the market and doesn’t care about any inspection of the house because they simply want to tear it down. So even if the Teacher and the doctor are able to pay the market rate, the house has already been sold (and not necessarily at a higher price because they couldn’t even get to a bidding war!)
Scenario B: There are zoning restrictions that encourage additions that fit within the scale and character of the neighborhood. Doesn’t necessarily restrict the high market price for the final house but hopefully helps preserve the streetscape.
Scenario C: Super Ted creates zoning that is so restrictive that both the teacher and doctor pass? I’m sorry – cannot see that happen. First – Ted create restrictive zoning? Second, what would be so restrictive to zoning that would make the teacher or doctor pass? That they couldn’t do anything to their property at all or that they couldn’t do more than “modest additions” (before you jump all over me Fig – I agree – “modest” would have to be defined) – without having to go through a review process?
“There is nothing the Gang of 24 can do to force a developer to lose money. The only way to drive down land price per unit is to increase the number of units.” Increasing the number of units without deed restrictions to keep these units affordable doesn’t necessarily get you there either.
https://www.bostonglobe.com/business/2015/09/06/middle-income-population-falling-boston/L9rXxhaJ2Kx4ilCSNYH8uJ/story.html
Boston is seeing rents skyrocket and it is driving the existing middle-class out. Yes – they are looking at an aggressive building plan to build thousands of housing units. The article above ends with the following:
“The city is trying to alleviate what it has called the “unprecedented difficulties” middle-income families are facing in finding housing, including pushing for the building of more than 26,000 units of housing for lower- to middle-income families and new dormitories to get more students out of working-class neighborhoods.
Yet a fundamental problem remains, Dillon acknowledged: “We don’t have a solution for landlords coming in and saying, ‘I’m going to triple the rent.’ ”
Amy, thank you for the post. Very informative on your views. Sean made the economic arguments. What I think you are trying to solve for is aesthetics, NOT middle class housing. Because your solutions will not be effective regarding the latter. You can solve for snout houses, 2 families, and even your aesthetic definition of a McMansion, but unless you are coming down with restrictions that basically keep the smaller homes in place with no additions, no changes to floor space, you won’t make a dent.
Look at my neighborhood. Looking around, I’ve got a few ranch homes (all in need of repair). I’ve got several smaller 2 or 3 story homes on very small lots. Then I’ve got a lot of 2 story homes are larger lots. And about the same number of very large homes. Some McMansions, some classic gigantic huge homes on larger lots. Some streets with all smaller homes, some streets with larger homes. I’d say 75% of my neighbors over the past 10 years have put on an addition on the small or moderate homes. Many of those classic colonials now have small 2 story additions on the side or the back. We’ve had a few teardowns with McMansions. The McMansion homes sell for insane prices. But the smaller homes with additions sell for well north of $1,000,000. These were homes that sold for $600,000 a decade ago. The additions weren’t insane. Most of them took over a larger side yard or back yard. Even the ranch homes have smaller additions on a few, to bump out a kitchen or the like. So the open market has basically flanked you already in a neighborhood which had little turnover. Folks stayed in their homes, couldn’t afford to move, made modest improvements, and the few that moved saw their prices skyrocket based on those improvements. Moderate priced housing no longer exists in my neighborhood except for the homes owned by the very elderly.
Your first paragraph at first read sounds reasonable. A moratorium until we work out zoning reform for six months. A year?. Why not? I’m fine with a cooling off period, even if it is completely ineffectual as shown by our historic building moratorium. I wish that worked better, but it doesn’t. But let’s assume the universe grants you the moratorium:
You state that the replacement home or addition to pass a design review or committee to make sure it meets with the neighborhood aesthetic. Is this a professional design review? Neighbors? Either way, give me hard and fast rules please. I fear a committee based on someone else’s view of what looks “right” without very specific guidelines. So is this your view of what meets the design of the neighborhood? Or mine? Because while I hate McMansions, I also hate ranches and split levels. Do I get to fulfill my wish to have Newton have more classic colonials? How about side additions that often don’t match the original style. Some folks like that, some don’t.
I’m fine with the side by side prohibition regarding the two families. I never said no regulations can be in place. I’m also fine with some obvious ones, like banning snout houses. I’m fine with both because there are options that still allow the market to operate. There are lots of different ways to design a two family, lots of different ways to deal with parking that isn’t a snout house.
Regarding your housing production plan, I’m guessing that is far more about stalling 40B projects that actually having a housing production plan that works. Because nothing in your post tells me how we actually get to a housing production plan that meets the 40B tests you reference. To your credit you acknowledge that the state won’t accept the 40B housing production plan if it doesn’t actually work, but that would require us to add significant density, something you’ve been opposed to.
Looking at your moderate density projects, I don’t know all of them, but I’d call that the most moderate of moderate density. I love the Can-do projects and some of the others you mentioned. But those types of projects aren’t going to get you to a housing production plan, and many of them relied on large city or state/federal subsidies to get built. But to summarize your zoning and density desires, you basically will consider projects under 10 units. Anything larger over your time on the Board?
To summarize, I think you are trying very hard to solve for asethetics and not for middle class housing. It is fine to quote the Boston Foundation report regarding high end and affordable housing and not middle class housing, but your solutions do nothing to solve for it. You will just wind up with highest end housing, high end housing, and affordable housing. And a very strong “teardown” police/zoning policy to make the folks who hate McMansions happy.
But Sean hits the nail on the head. If you aren’t talking about significant building, you aren’t doing anything to address the middle class housing you are trying to solve. You can’t have it all. Middle Class housing, low density, aesthetic sensibilities. Something has to bend.
Sometime, Super Ted gets a bad rap. Ald. Sangiolo glosses over the fact that I got the more restrictive definition of two-family dwelling passed (Ald. Yates docketed a different albeit related item). Now we are moving forward with regulations for front facing garages that will prevent the proliferation of “snout houses” which nobody seems to like (except builders of snout houses). Yay us.
I also chaired a task force that helped plug the gaping hole in the “50% demolition rule” which allowed additions by right that vastly exceeded FAR. ZAP at the time rejected an FAR “bonus” for staying within setbacks, which the BOA then quickly passed when homeowners and aldermen (including Ald. Sangiolo) cried foul because many projects that had already been planned were derailed or required a special permit. We have been struggling ever since with zoning reform, in part because those who say we should be moving forward on it are obstructing the process at every step.
But my solution to the affordable housing crisis discussed in the Boston Foundation’s report is to allow greater density in and around village centers located close to public transit–where it makes the most sense. If we give developers (non-profit or otherwise) the ability to create housing the middle class can afford, and strengthen the inclusionary zoning ordiance (as the planning department and I agree must be done), then we will reverse the trend toward less affordable housing. Moratoriums, at best, maintain the status quo, which is that there are twice as many families in need of affordable housing living in Newton today than there are rental of homeownerhsip units they can afford, and Newton is not producing additional housing to accommodate that existing need. So at least half of the low to moderate income families and middle class families that live here now are “cost burdened” in that they pay more than the 30% of their household income for housing. Snow globing the city is not going to solve the problem, but meeting the demand can.
As for landlords tripling the rent, I doubt most people want rent control to return, certainly not the landlords. But there is a way to prevent it: build more affordable units that have permanent affordability restrictions attached either because of Chapter 40B, a special permit or the inclusionary zoning ordinance.
There is so much good, constructive conversation going on here. Thanks to everyone.
My point, to the extent I have one: any housing discussion has to start with an analysis of the fundamentals of supply and demand.
Why do we have such expensive building lots? Because there is aan artificial cap on housing units in the city.
Why is it so expensive to build housing? Because the lots are so expensive.
Why can landlords jack up rent? Because demand far exceeds supply.
It all comes down to a single cause: by government regulation, we constrain supply. There are lots of good reasons for zoning. Zoning provides lots of benefit. So don’t throw away zoning.
But, if we have a chance at solving the middle-income housing problem, it has to be by seriously easing the parts of zoning that so severely limit supply.
If density — serious, transit-oriented density — is not part of the solution, at best were tinkering around at the edges.
The Glob article cites two examples of developers competing to buy land at $7 and $29 million/acre, which translates to $10 or $43 million for the 1.5 acre Austin St. lot that the city has opted to transfer to a private developer for $1 million.
Jack P: Sure perhaps the city could have sold the lot for $10-43 million if we wanted to (a) lose all the public parking and (b) make it 100 percent luxury housing.
That’s not what I want. Is it what you want?
And before you answer, please take the time to read this.
@ Sean,.. Who says land in Newton is so expensive? Austin Street is being rented from the city at $10,000 a year! Talk about governmental regulation of a market!
Blueprintbill: Do you acknowledge that the requirement to bury parking for the tenants, keep the 127 space parking lots, put in the public garden area, and have 17 units of affordable housing is worth something?
The city put out an RFP. It got a lot of interest. No one bid more than $5,000,000 for the lot. Multiple bids that did not coordinate came in at 1 million, One came in at $5,000,000, which was for a larger project with a larger footprint. So let’s say the price tag was between $1,000,000 and $5,000,000. I’ve always considering it a bit dishonest of the opponents of the project to quote the $5,000,000, since there is no way they would have supported an even larger project to get to that $5,000,000 figure. Could the city have gotten more? Probably. Could it have gotten more and gotten all the concessions? Less probably. Could it have gotten all of that and delayed the project for multiple years, while costs for new construction rose greatly? Even less probably.
Not saying the developer isn’t making a hefty profit. Sure that they are. Doesn’t mean I don’t think we couldn’t have gotten a bit more, or more affordable units, or buried utilities. I think we could have. (and this is Mike S. cue to start talking about an addiitonal 6 units of affordable, etc.)
What I am saying is that every time you quote that the rent for the Austin Street lot is only $10K a year, you are either purposefully or out of ignorance being incorrect. Any financial analysis would take into account all benefits and burdens on the property. Anyone who has development experience like Mike S. can back me up on that. Often in a purchase and sale such benefits are directly quantified, or it can be done in an appraisal.
But I’m pretty sure you are smart enough to know all this Blue, and you are just quoting the 10K a year line to get a rise out of me. C’mon, tell me I’m right. ;-)
One can build a lot of city-owned moderate-income units for $10 million (or more). Don’t love non-cash benefits.
As for the “value” of parking …
Sean:
That would a separate discussion. But yes, if they city want to maximize affordability at the expense of parking, it could have sold the lot to the highest bidder. A revolving loan fund with 20 million in it would do wonders for affordable housing projects, especially smaller ones. But even I’m not in favor of reducing parking in Newtonville by the full 127 spaces.
As for the value of parking, even if you don’t value the spaces as a place to put cars, forcing the developer to build below grade parking is a huge imposition.
I just want to point out that while the aldermen can’t solve this problem through one project, obviously, incremental progress to build moderate sized housing in communities like ours around the state will, over time, help relieve pressure on prices.
But isn’t that the rub, Bryan? Folks living here already presumably have little appetite for relieving the pressure on home prices. More supply just might do that, and we wouldn’t want that, would we?
@Bryan: Do you mind providing some evidence to support that claim? In MA, since the creation of Chapter 40B in 1969, the opposite has been found to be the case.
@Ted: The moratorium proposal was only a temporary respite while we get some interim zoning solutions passed. Not an end all be all solution. Never said that.
I agree with Ted’s suggestions about deed restricting newly created affordable housing – the only problem is that 40B’s come with a whole lot of market rate housing – which is out of reach for the middle class. However, I am all in favor buying down the cost of some of these market rate units (using CPA funds) to price them at a much more affordable price point.
@Fignewtonville: Kessler Woods amended proposal was for an 80-unit multi-family housing development.
I love having a forum to discuss ideas but there has to be an openness and willingness to listen and understand each other’s perspectives and it’s got to involve more than just some small snippets in blog posts. Best meeting I’ve attended was in June with the Housing Strategy consultant That was a session where many of the Aldermen who have all sorts of stances on development, housing and the permitting process were able to talk and share and be civil and non-judgmental (well – maybe Super Ted was making snarky comments about me under his breath). Those are the types of conversations and forums that will hopefully move us all in a common direction for the good of the City.
Oh now Amy, you know I don’t make snarky comments under my breath. I always shout out, loud and proud.
@Blueprintbill – It is $5000/year or $416/month, as the lease extends to 198 years with no cost specified for the 2nd 99 year term.
@Greg: The bidding suggests the asset worth north of $5 million, even with the special permit and process encumbrances – so let’s use $10 million. The developers require a special permit waiver of 80 spaces to cover the requirements for their new retailers, so their net contribution from the 124 spaces back to public parking for existing businesses and the senior center is 44 spaces, down from the existing 164 spaces.
If we assume ideally that all of the affordable housing is fully subsided for low income residents, the total rental revenue for the units will be $25 million in today’s dollar over the initial course of the 99-year lease. So the city gets a net 44 public spaces and the use of 17 units of housing for a net cost of $34 million dollars.
Alternatively the city could allocate the underused portion of the land in the far corner of the lot to build 17 low income units at a net cost of say ~$4 million (if you figure about half globe quoted construction cost is land) and retain convenient parking to the existing businesses and senior center.
Back of the envelope, this would be a savings to the city/government (or loss to the developers) of $30 million versus the current proposal.
@Tom: I didn’t say anything about 40B or any particular program.
Supply and demand, and basic economics, suggests that demand drives prices, and increased supply relieves pressure on prices caused by increased demand.
@Ted: Yes – but I think you were being nice to me that week. : )
@Bryan: Glad you still believe that Newton is a community after your comments re: Austin Street. I certainly understand basic economics, but your comment actually does imply that housing developed under Chapter 40B will help relieve pressure on prices. Do you agree that despite the intent of Chapter 40B, prices have actually significantly increased in communities where it’s implemented? Similarly, do you agree that the community of Newton has developed significantly more housing under Chapter 40B than most municipalities in the Commonwealth?
The value of the conversation improves when parrots are involved! :-D
@Tom, I heard Bryan saying that increased housing stock CAN have a favorable impact on market prices.
You imply that studies have been done that demonstrate that factoring out all other considerations, 40B has CAUSED an increase in home prices in communities?
Still no thread on the atrocities that occurred in Paris yesterday?!? It looks like everyone on this blog would rather be at each other’s throats about a development that may very well hurdle Mayor Warren as Newton’s champion for affordable housing.
Janet – This is a local blog about local issues. Without question, everyone’s hearts and minds are first and foremost with the people in Paris.
Janet, if the posts on this blog are so beneath you, and you believe that they have no value, why do you keep inserting your sarcasm but never have anything constructive to say?
It’s often been said that “land is a good investment–because they’re not making any more.” I think nearly everyone on this thread has overlooked the key underlying causes of our regional housing shortage. It’s a problem that in large part has been created by government, so it’s alarming to see even more regulation being suggested as a solution. And looking at a regional crisis through the myopic lens of Newton, provides little [if any] insight.
Take another look at the headline of the Globe article. “Land cost” is a principle driver behind the housing shortage. Government regulation has caused a dramatic increase in land cost. And government’s solution, 40B, has in part exacerbated the problem by encouraging developers to build large apartment buildings, rather than the single family homes that used to be part of the “American Dream.”
The real estate company in which I am a partner, used to develop subdivisions. As late as the early 1990’s, we were still selling a majority of our newly constructed homes for less than $229K, and at one time we had six subdivisions under construction simultaneously. While we still have approximately a thousand acres of undeveloped property in inventory, we have not built a residential subdivision in nearly two decades, because government regulations have made it financially unfeasible.
To understand our housing “crisis,” you have to look at the big picture. Less developable land drives up the value of developed land, and encourages developers to tear down existing structures and build vertically instead of horizontally. Government is at odds with itself on this issue. On one hand wanting to slow residential growth, and on the other seeking to encourage a specific type of growth in order to create more “affordable” housing.
I don’t know what the solution is. But I do know that more government regulation is not the answer.
Mike, land cost is driven in part by zoning, that’s an important element that is often overlooked.
Land cost is also driven by demand. The 10’s of thousands of commuters to/ from Boston, from distant suburbs who find themselves stuck on the parking lot otherwise known as the Massachusetts Turnpike look at the time they might save living in Newton and upon checking their bank account some decide that the million or so $ ‘s it might cost, is worth it.
@Bryan– In large part, zoning is what I was referring to by “government regulation.” Towns with plenty of undeveloped land have passed onerous restrictions that make single family residential development more expensive and in many cases unfeasible.
Greg,
Weren’t there several options on the table that would have brought the city more money for the land + all affordable units? At least one had 100% right? $5M for the lot.
Anyway, it looks like Newton will soon be a Waltham or Watertown. Few trees, no gardens, crowded schools, no air, and the money will move away. You really can’t have your utopian society because money likes other money.
Advocate for better public transportation if you really want to have an impact. That way, not everyone will have to live in Newton.
Be sure to take before and after pictures. Maybe Setti can use them for his next campaigns.
Darcy
I don’t see how building 68 middle income apartment homes (including 17 affordable apartment homes) in a village center at the site of an ugly parking lot turns us into Waltham or Watertown.
(I also wonder how much you know about Waltham or Watertown, but that’s a different discussion.)
Greg,
Are you saying that the non-affiordable units on Austin St will be for middle income? Middle income based on what? Laughable. Personally, I am Ok with the high rents and luxury apartments. But I already live in Newton!
I wonder what you think you know about about Waltham and Watertown. I chose Newton because of the higher income levels and thus ‘better’ schools over those towns. I honestly don’t want my kids to attend the schools in lower income towns. Neither do you because you live in Newton!
I think its a shame that insiders in Newton want to turn it into a high density utopia to ‘solve’ some housing crisis that really doesn’t exist. Young people want to live in Boston or Cambridge. The middle class with kids want houses, not units. Rents at ASP will be too high anyway. The units will go to higher income people who don’t want to buy because they aren’t staying. Luxury units are fine with me but much higher density? No way. I just returned from extremely dense cities. Anyone left who has money sends their kids to private schools. That will happen here too.
Its amusing that there is such passion on this blog for saving tiny numbers of people by bringing them to NEWTON. In 10 years there will be no more Newton. Then, will everyone be saved or will more people need saving? ;). Where to?
How about make everyone’s life better by improving public transportation?
Make every city and town grand.
Darcy
So Darcy, yes that’s what I’m saying.
And are you suggesting that we should believe you, instead of the Boston Foundation, as far as whether or not a “housing crisis really exists”?
The apartments are described as “market rate.” Market rate does not mean “middle income.”
Interesting tidbits from the last draft order:
The Board finds that the Reuse Board Order #150-09(6) resolves “That funds at least equal to the monetary bid received for the lease of the property be used to enhance the redevelopment of the site and improve Newtonville center more generally,”
monitor the use of interim parking on the Site, on Austin Street or at the Star Market if interim parking is provided at this location.
The Interim Parking Plan will accommodate no less than 50 short-term parking spaces on Site throughout the construction of the Project and 20 short-term parking spaces at Star Market if those spaces become available or 20 short- term parking spaces along Austin Street if the Star Market spaces do not become available.
The Board finds that the Project utility lines will be undergrounded from the street to the building, that ASP will make a contribution towards the undergrounding of utility lines along the Site’sAustin Street frontage.
The Petitioner shall operate a free shuttle bus service to satellite parking at the Aquinas School where 100 parking stalls will be allocated for medium and long term parkers, including construction workers. The Shuttle service is intended to serve in order of priority: 1) the Project’s construction workers; 2) visitors to the Senior Center; 3) employees in Newtonville; 4) residents of the Jackson road area; and 5) commuters.
If the actual measured traffic volumes associated with the Project exceed the trip estimates presented in the Petitioner’s Transportation Impact Study by more than 10% of the projected trip generation … discuss expansion or modification of the TDM
in order to increase use of public transportation, or other alternatives to automobile travel.
@ Greg
Would that Austin Street development could be an improvement over Waltham or Watertown. There at least those tenants don’t have the noise, pollution, and extraordinary view of the turnpike !
@ Darcy,
Bravo ! If you haven’t signed onto the NVA yet , give it some thought. Your views are well in line and would be welcomed.
‘The Austin Srettf Board Order accepts the under grounding of utilities from the street to the building.’ Hooray ! A whole 6′-0″ of underground service.
An then there will be expected a ASP’s “contribution”, toward the under grounding of the rest up and down the street?!!!
Why not a mandate that they do it all ? !!! Is there a fear that the ASP’s will back out of the deal ??? Talk about a piss ant negotiation process ! Oh,.. I forgot. The Board Order was written by the Mayors Lawyer not the BOA themselves.
It is the DRAFT Board Order for the BOA.
But I have questions from the last public hearing.
Why does it say the up front lease payment is EITHER to enhance the redevelopment of the site OR to improve Newtonville Center? Wasn’t it just supposed to go to Newtonville?
In the hearing ASP had finished negotiations and agreed to pay $35,000 to lease the 20 spaces in the Star Market lot. Now we are back to being uncertain they are available? Makes no sense.
The 100 spaces in the Aquinas lot are given first priority to the construction workers. In the hearing the length of time the shuttle would be available was undetermined. They have alloted it a monetary value, although they wanted the option to transfer some of that to another part of the mitigation. What if that allotment runs out.
What happened to the rentals for income up to 50% AMI that were wanted by the Fair Housing Committee?
Marti:
I agree 100% on the funds going to Newtonville. I think if that doesn’t happen the folks in Newtonville will have been blatently lied to by the mayor and the Board.
No one in Newtonville thinks this is a “perfect” project. This was part of the deal from the beginning. Those funds are to be used to improve the overall village. Taking it away, either now or in the future, would fundamentally alter the business deal.
These needs to get fixed (or explained if there is another explanation) prior to going final.