Here’s a fake news story I wrote, yesterday.
We can dream about something like this happening, can’t we?

Mayor proposes 12,000 housing units built by 2009
Menino speaks of ‘bold vision’ for city

Mayor Thomas M. Menino yesterday called for the construction of 12,000 units of housing, to be approved and built over the next three years, to demonstrate Boston’s confidence in its future.

”Here, we’ll be looking for proposals that symbolize the full scope of this city’s greatness,” Menino told the city’s business community yesterday, in a speech at the Seaport Hotel on the South Boston Waterfront.

“We need more housing. That much is clear. Housing prices continue to rise, even as the number of sales has stagnated over the past several months. Something needs to be done. We need to encourage middle-class people to stay, and, actually, to move into Boston. The only way to do that is to increase the number of moderately-priced condos and single-family homes for sale.”

“There is nothing wrong with building luxury condos, per se, but we need to increase the housing stock, overall, so that everyone who wants to can afford to live in Boston. ‘A rising tide lifts all boats’, they say. And, it is true, in this case. The more housing we have, the greater options there will be for all potential homeowners.”

“We all benefit by having a more diverse resident population. And, of course, the city benefits through increased property tax and other tax revenues.”

The Mayor received 37 standing ovations during his well-received presentation. Several attendees cheered and patted each other on the back, heartily, and one even shouted out toward the end, “We’ll see you in the State House because of this, Tom!”

Strikingly, the Mayor made no mention of “affordable-housing” in his speech, although current city regulations mandate a set-aside of up to 15 percent of units. The Mayor’s office said, later, that any new construction will be exempt from those regulations, because of the way the program is to be structured.

Some other components of the Mayor’s proposal will undoubtedly be controversial, as well:

* Owners of new residential housing built in the Seaport District, on the South Boston waterfront, will be exempt from property taxes for the first 25 years, to encourage people to move into that neighborhood. The first developers expected to take advantage of this new program include Joe Fallon, who is planning to break ground on his Fan Pier project, in the near future, and Rupert Murdoch’s News Corp, which recently became the owner of a 24-acre parcel of land, close-by, through a land deal with parking lot mogul, Frank McCourt. That project is expected to include housing, as well.

Each developer will be required to pay two new fees to the city – a flat fee (amount to be determined at a later date, but somewhere in the $25,000 – $50,000 range) based on the number of units that are to be built, and a 2% sales fee, to be collected from the developer, as each of the completed units are sold.

In addition, Boston will require a 2% transfer-tax on all sales or transfers of property, in perpetuity, payable upon closing (this is similar to other projects in Boston, where sellers pay the Boston Redevelopment Authority a transfer-tax fee – for example, at Parris Landing, in Charlestown).

The flat fees received from the developers will be used to reduce the purchase price of each of the condos, in order to keep them more affordable. In reality, the city will not collect any funds, directly, from developers, but will reduce the cost of each condo by the amount agreed upon.

The fees collected as a result of the transfer-tax will go to cover the cost of administering the program, plus go toward the creation of a new low-cost, low-interest mortgage loan pool for use by anyone able to qualify for a mortgage loan but unable to obtain financing through traditional means. In addition, money will be put aside for use by residents in the Section 8 rental voucher program.

Owners will not face any restrictions on the resales of their units, although homeowners who buy new units, directly from the developer, will be required to pay a 4% transfer-tax fee, instead of the 2% transfer-tax fee, when they sell, to reduce the number of investors buying for quick profits.

It is expected that the simple economic principle of supply and demand will mean that having the additional 12,000 units on the real estate market will bring the overall cost of housing down, or at least reduce the rapid increase in prices that Boston has encountered over the past, several years.

* The city will drastically reduce the number of public housing units currently managed by the Boston Housing Authority, with many of the housing projects being turned over to current residents or converted into rental buildings or co-operatives, and privately managed. The Villa Victoria development in the South End will be a model for this program.

The city manages over 26,000 units of housing through its public housing program. There are 38,000 residents living in housing owned and managed by the city, and an estimated 60,000 people (or ten percent of the population), overall, live in housing at least partially subsidized, including those who receive rental assistance through the federal Section 8 voucher program.

In fact, Menino’s initiative proposes tearing down a large number of Boston’s 64 projects completely (including almost half of the city’s “family development” properties), meaning current residents will be displaced.

However, the city will increase the number of Section 8 rental vouchers available, exponentially, to offset the reduction in public housing units, and the city will increase the number of vouchers available, beyond that, to reduce the number of residents waiting to be approved or to qualify for the program. The Mayor’s office has set a five-year goal for this part of the proposal.

(The federal government has reduced the available number of Section 8 vouchers, precipitously, over the past several years, and cities across the United States have struggled to find ways to maintain the program.)

“We have a responsibility to take care of the residents who can’t afford to live in our city, without our help. However, the city should not be a landlord,” Menino said. “We do a shitty job of it. The public housing properties are in disrepair, and the areas have become unsafe for anyone living there. More importantly, housing projects have the unintended result of segregating the poor from the rest of the city’s population. By closing several of the projects, these residents will become more integrated into the city, and become a part of the community.”

The Mayor has appointed Douglas Foy as the leader of the new program, to be called the “Pipe Dreams Initiative”. Foy was most recently Secretary of Commonwealth Development, under Governor Mitt Romney. Prior to that, he was the head of the Conservation Law Foundation for 25 years.

”We will insist on bold vision and world-class architecture,” Menino said of the condominium complexes envisioned by City Hall planners. In colorful artists’ renderings of the skyline the city envisions, each of the city’s neighborhoods is transformed.

Specifically:

** The Seaport District and South Boston waterfront will see at least 3,500 units of housing, as the area is built out to include residential, commercial, and retail space, over the coming years.

** Five hundred units will be built, initially, as part of the redevelopment at the site of the old Boston State Hospital, located between the city’s Mattapan and Dorchester neighborhoods. The majority of these units may, in fact, be single-family homes. Part of the rehabilitation of this site has already been approved by the state; the entire project will now fall under city control.

** Menino’s office announced that the city, state, and federal governments have given final approval to the Columbus Center project, bordering the Back Bay and South End, and that initial approval has been given to John Rosenthal, who plans to include housing as part of his mixed-use project, to rise over the Mass Turnpike, near Fenway Park. These projects will bring 500-600 units of housing into the market.

** Twelve of the city’s “family development” housing projects will be torn down, including the Cathedral development in the South End, the Old Colony development in South Boston, parts of the West Broadway development in South Boston, and the Camden and Lenox developments in the South End, as well as the entire housing development in Charlestown. The land will then be offered for sale by the city to private developers. The city believes they can construct over 7,000 units of housing on the freed-up land. Developers will be required to consent to a redevelopment program similar to what is being proposed for the Seaport District.

The city believes it can raise $200 million – $300 million from the sale of all this real estate. “We really won’t know until we do a complete analysis, and even then, it’ll be an estimate until we put the land out for bid,” said Donna Shalala, the mayor’s spokeswoman.

All net proceeds from the sale of the housing project land will go to pay for repairs and renovations of the remaining public housing developments, to help relocate current residents, and the remainder set aside for any public housing initiatives proposed in the future.

** Several of the city’s “elderly / disabled development” housing projects will close, and the land sold off to private developers. All residents will be relocated to empty units in other projects or moved into privately-owned housing. No one being moved will have to pay more in rent than they currently pay.

Private research groups such as the Pioneer Institute have found that the BHA’s projects have a high vacancy rate – over 4% of the units are empty, at any one time (twice the national average), according to a report released by the think tank, several years ago. Also, there is a high “overhoused” population – this is where residents live in units with more bedrooms than people (11% vs. a national average of 5.6%). By simply moving residents around, the city can reduce the number of units needed, by as much as a 1,000, or more.

** Rental apartments are an integral part of the new initiative, although details were not announced during the Mayor’s speech. It is expected that 4,000 – 5,000 units can be built within the next three years, on land currently owned by the city. The city may lease the land to private developers, or sell it, outright. By leasing the land to developers at a nominal price, the city could reduce the cost of building and managing any new developments, thereby allowing the private landlords to offer apartments at lower rents than would otherwise be possible.

The city will collect 2% of rents collected by each developer, with the money raised going to assist in the construction of more rental units, in the future.

The Mayor’s office said, separately, that they have been in contact with Governor Mitt Romney to see if the state will cover any infrastructure costs. The Governor was very receptive, they said, and committed himself to making the Pipe Dreams Initiative a reality.

“My presidential aspirations rely on me coming across as compassionate and caring, instead of being the robot I am,” said Mr. Romney. “This program will be a slam-dunk!”

In his speech at the annual meeting of the Boston Municipal Research Bureau, Menino said the city’s immediate priorities are addressing increasing crime, meeting the challenges of rising costs, and staying competitive in a world economy where Boston is less insulated than ever from global challenges.

New housing construction would show confidence about overcoming those obstacles, Menino said, serving as ”a stunning statement of our belief in Boston’s bright future.”

”We expect proposals from around the world,” said Susan Elsbree, a spokeswoman for the Boston Redevelopment Authority. ”Dozens.”

Reaction from Boston residents was overwhelmingly positive.

“It’s about time!” said Diane Arbus, 42, Dorchester resident, and mother of three. “I was thinking I’d have to move out of Boston, a couple years from now, because of the high cost of housing, but I won’t have to, now. I know as well as a professor at Harvard that building more housing can reduce the cost as well as improve the quality of our housing stock, at the same time.”

“I’m ecstatic,” said Thomas Kincaid, 83, a retired steamship purser, who currently rents in the South End. “I’ve seen the city through its good times and bad times. I was born on the tough streets of South Boston, I lived in the North End back when Jane Jacobs called it the worst slum in America, and I have lived in the South End since before anyone thought to move here, back before Mel King held a protest at Tent City to demand better, cheaper housing for the city’s residents. This proposal is the first time I’ve heard of something that actually might work!”

“When can I move?” joked Larry Picasso, a 23-year-old artist currently living in the Fenway with three other students attending Boston’s School of the Museum of Arts. “I love new buildings – new architecture and new design. And, I’m living off a trust fund, as are most of the people I know. Our parents will be so happy they can fund our fantasies, just a little bit longer.”

Others were less enthusiastic.

“The idea is horrible. I am totally against it, totally,” said State Representative Marty Walz, as she bit into a lemon with its rind on. “More housing for our city, and none of it deemed ‘affordable’? How can that help anyone? I’m going to be against this and do everything I can to make sure nothing is every built in this city, any time, any place, any where.”