Boston Real Estate Blog

John Ford Realty
137 Charles Street, Boston
[email protected]
151 Tremont Street

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Best state in the country gets even better

The New York Times gives Massachusetts its day in the spotlight:

Gay Couples Find Marriage Is a Mixed Bag – By Pam Belluck, The New York Times

Point of article: Apparently, a lot of gay people are hairdressers and also enjoy gardening? And, men are pigs.

The Massachusetts Model – Editorial, The New York Times

Point of article: Massachusetts has universal healthcare, although over 300,000 residents haven’t signed up, yet. Also, healthcare costs a lot.

Repeal the income tax!

Carla Howell, erstwhile gubernatorial candidate and proud Libertarian, is leading the charge to abolish Massachusetts’ income tax.

She was recently interviewed for an article in Banker & Tradesman.

Q: Gov. Deval Patrick has said your idea to abolish the state income tax is “stupid,” and he told Banker & Tradesman, “I get the point that it’s not the government’s money, that it’s your money. But that’s not the whole story because it’s also your broken roads, your overcrowded schools, your broken neighborhood and your broken neighbors. And it’s time we all started taking responsibility for that.” How do you respond to that?

A: The neighborhoods are broken because of big government and big government welfare programs. Go to places like Roxbury, Revere and Brockton and meet people there and ask about what their family members do. They will come up with so many welfare programs that it will make your head spin. They are all on these different welfare programs that no one has ever heard of, there are scores of them. Go to the Blue Pages of the phone book and see the lists of government agencies. There are so many of them. No one is paying attention to what they do expect for the people who work in them and the people who get checks from them who have an incentive to keep the money flowing. Are we reducing poverty? No. We are sustaining poverty. These devastated neighborhoods have been ruined by government programs where you have generations of families who never learned to read and are dependent on government.

Approximately 55% of Mass state tax revenues come in as a result of residential (and corporate) income taxes, and about 33% of total moneys collected (includes federal reimbursements, etc.).

The goal of Ms Howell and her group isn’t to replace the income tax with other sources of revenue, it’s to drastically reduce state spending, overall.

While the goal seems laudatory, the method seems a bit harsh, and the results potentially disastrous, although I would be willing to give it a whirl.

Still, if you think passing the referendum would lead to any change at the state level, you may be hopelessly naive. Remember the tax rate rollback we all voted into “law” a couple years ago, the one that requires the state to reduce the individual tax rate from 5.3% to 5%?

Yeah, I’m still waiting for that 0.3%.

Source: Nonprofit Co-founder Takes Aim at Massachusetts’ Income Tax – By Thomas Grillo, Banker & Tradesman (subscription required)

Yay, Kate’s back!


The feature film “Bride Wars” is now filming in and around Boston.

This is the second film to be made in Massachusetts by Academy-Award nominated actress Kate Hudson since the new tax credits / revenue giveaway program was passed by The Commonwealth, a couple years ago.

The Massachusetts tax credit program allows producers to submit receipts for salaries paid to any employee, including film stars. The Commonwealth then pays out 25% in state revenues, in return.

By my back-of-the-envelope calculations, Ms Hudson has done quite well – she’s definitely “Made it in Massachusetts”. A rough guess would be that she earned $2 million per film, or $4 million, total? On top of that, Massachusetts taxpayers have given her $1,000,000 in the past two years.

Welcome back, Kate!

Wellington Mgt grows, so does MA economy

Two from the Boston Business Journal.

First, the under-development Russia Wharf has signed up a big tenant.

Wellington Management Co. LLP has inked a deal to occupy 450,000 square feet of space at Russia Wharf, capping one of Boston’s largest lease deals in recent months.

Boston Properties Inc. (NYSE: BXP), which is building a 552,000-square-foot office tower at the site, quietly highlighted the lease deal in its fiscal 2008 first-quarter earnings announced on Wednesday.

Boston Properties said Wellington signed a 15-year lease agreement on April 22. The lease is scheduled to begin in spring 2011.

Meanwhile, the Massachusetts economy is en fuego!

In the face of widespread economic fears, the Massachusetts economy expanded by 3.2 percent annualized rate in the first quarter, according to the University of Massachusetts Donahue Institute.

“Total nonagricultural employment has continued to grow, bucking the national trend of declining employment in the last three months.”

The institute, using leading indicators, estimates that the Massachusetts economy will grow by 2.5 percent in the next six months.

Source: Wellington signs Russia Wharf lease – Boston Business Journal

Source: State GDP grows, says institute – Boston Business Journal

I once knew a Longfellow

Apparently, it’s going to cost $250 million in state dollars* to reconstruct the Longfellow Bridge, which goes from Cambridge to Boston. The bridge carries cars as well as the Red Line. And, there are sidewalks on either side. This is the “salt and pepper” bridge.

Whether or not the bridge is safe and renovation can wait a couple years is an open question. The Commonwealth says it is safe. The engineering firm it hired to assess the safety, says no, or, “probably not”, according to the Globe.

An independent inspection of the Longfellow Bridge found the span to be in worse condition than the state had previously determined, but officials dispute the findings and refused to release the report to the public for several months.
more stories like this

The state spent $915,000 on the nearly four-month inspection last year by Jacobs Engineering Group. But state engineers refused to sign off on the report after it was submitted in January, saying that it overstated the dangers of deteriorating bridge components and failed to take into account the repairs already underway.

That’s disturbing. The idea that the state may be playing games with the results of the study.

Also upsetting is that the cost of replacing the bridge is $250 million in state dollars*.

I have a question, and I’m being serious. Is it necessary to replace this bridge? Really. Could we close it to auto traffic, and just leave it open to pedestrians and the subway? Would this reduce the cost of repairs? What exactly is the reason it will cost so much? The steel? The labor? What?

$250 million seems like a ridiculous amount of money for a bridge that’s probably a quarter-mile in length, total.

Wouldn’t it be great if it was “pedestrians-only”? It would be a great way to open up that area to more visitors and residents, alike.

I dunno. I’m not a traffic engineer or urban planner.

* $250 million in “state dollars” means, probably twice that, or $500 million, given that any estimate of cost is undoubtedly understated. Add in cost over-runs, repairing the “repairs”, etc., and the final cost will no doubt be twice the estimate, or more.

Source: ‘Serious’ Longfellow flaws cited in study; State disputes, delays report – By Stephanie Ebbert, The Boston Globe

Commonwealth tax credit program raises questions

As I’ve pointed out before, the Commonwealth’s movie tax credits program (ie., giveaways) is the biggest ripoff in state spending that we have seen in a long time.

Bruce Mohl, he of Commonwealth magazine, seems to agree.

In an op-ed piece that ran in the Globe he says:

The 25 percent film tax credit is a perfect example. A movie spending $20 million here would receive credits worth $5 million that could be sold to someone who owes taxes in Massachusetts or sold back to the state at 90 cents on the dollar. Either way, the production company walks away with cash that helps defray the cost of the movie.

“It’s free money,” said John Hadity, a former Miramax executive who now runs a New York consulting business that helps studios maximize the tax credits states are showering on them. “Credits have become the math for making films.”

The Revenue Department says 88 productions were either completed or under development in 2006, 2007, and the first two months of this year. The projects are expected to generate direct spending in Massachusetts of $545 million and tax credits worth $138 million. More than a quarter of the credits were generated by payments to big-name stars and directors.

** But, he doesn’t even make it clear. It’s not a “credit” if it’s cash out of the state’s treasury. It’s a “gift”. A credit would be if you paid $20 million in payroll and sales taxes and got $5 million of it, back. What happens instead is, a film company spends $20 million overall (they send in receipts) and gets a check back for between $4.5-$5 million.

Oh, and you should be extremely skeptical of the “direct spending of $545 million …” claim.

We see this sort of financial hi-jinks, all the time.

For example, the Boston Marathon.

The organizers claim this year’s event brought in $112 million in direct and indirect spending.

What do they include in this total?

According to the Greater Boston Convention and Visitors Bureau:

* $72.7 million by the runners and their guests;
* $10 million by spectators;
* $7 million by the Boston Athletic Association, which hosts the marathon;
* $10 million for fund-raising events by runners;
* $750,000 for the U.S. Olympic Women’s Marathon trials April 20;
* $6.3 million toward spring visitor events;
* $5.2 million for four Red Sox games at Fenway Park.

Because hotels would have been empty this weekend, and because the Red Sox wouldn’t have 81 home games this year without the Marathon, right? (And, to include the $10 million in fund-raising by runners, and BAA entrance fees.)

Anyway, a post for another time.

All I’m saying is, this is a waste of state money.

I’m all for generating tax revenue, but to hand out cash to stars just seems unwise.

Did you think they were making movies in Boston because they like our weather???

Wealthy towns face slower market, some better than others

A week or so ago, I read a comment in some blog about how $1,000,000+ sales had dropped off in some of the tonier (hate that word) towns across the Commonwealth. Or, more accurately, the comment was that there was a glut of $1,000,000+ single-family homes on the market, when you compared them to number of sales.

So, I did some research.

Here is a break-down of data from MLSPIN covering 01/01 – 03/31 for the years 2005, 2006, 2007, 2008. And, current inventory, all listings greater than $1,000,000. And, months of inventory available, based on the number of sales during the past 30 days.

Typically, the average time on market for homes in all price ranges is between 5-8 months. Million dollar-plus homes have historically sold more slowly than other price ranges.

As you can see, though, some towns seem to have a glut.

There’s probably more to this story than meets the eye. Why, for example, would there be 26 million dollar-plus homes on the market today, in Andover, when during the past four years, only six or seven homes sold, all year? Is the supply due to new construction? Is it owners in duress? Is it owners testing out the market?

Town2005200620072008current inventorysold last 30 daysmonths of inventory

Andover676326126 months

Boxford42521929.5 months

Brookline131618124394.7 months

Dover872245222.5 months

Cambridge1014982036.66 months

Carlisle446213113 months

Concord8119640220 months

Lexington11915126479 months

Lincoln6484919 months

Manchester142426126 months

Wellesley2533332782108.2 months

Weston285171472324 months


Source: Based on information provided to and compiled by the Multiple Listing Service Property Information Network, Inc. covering the first-quarter, 2005, 2006, 2007, and 2008.

Mass unemployment rate bucks national trend (Go, us!)

Massachusetts’ unemployment rate remained the same, in February, compared to one year ago and compared to January, 2008.

The unemployment rate for Massachusetts was 4.5 percent for February 2008, a slight dip from the 4.7 percent rate of February 2007. In February 2006 the state’s unemployment rate was at 4.8 percent.

The department reported about 151,700 people were unemployed in February compared to 159,400 who were unemployed in February 2007. The workforce in February 2008 was 3.408 million, down from 3.412 million in February 2007, and down from January 2008, which reported 3.422 million workers in the state.

“That leaves me to believe that people are leaving the labor workforce because they’re discouraged with limited prospects for jobs,” said [Walter] Marshall, of the Bureau of Labor Statistics.

I don’t know enough about the labor market to disagree, but it seems to me, the change in the labor force is small, has only been for one month, and that these are preliminary numbers, so you shouldn’t draw conclusions as to why less people are looking for jobs.

Source: Mass. unemployment rate flat in February – By Naomi R Kooker, Boston Business Journal, quoting Bureau of Labor Statistics data

The best news of the day: Mass Pike slingshot opens to Fast Lane / E-Z Pass traffic

This is good news. Should save some time. Get in your cars and drive!

The U-turn ramp located at the Allston-Brighton toll plaza opened to drivers with Fast Lane and E-Z Pass transponders on Sunday.

Two-axle passenger vehicles with FAST LANE will be charged $2 to use the ramp. E-Z Pass customers will pay $2.50. Taxis and two-axle trucks are charged $2.50, and three-axle buses $4 — the same price they would pay if they went through Exit 20 tolls twice while turning around.

The way it is now, if you are coming from Logan Airport and want to get to Back Bay or the South End, you have to get off in South Boston (actually, the Seaport District) and make your way around the city, or take the exit to Rt 93 South and cross five lanes of traffic to get off at Mass Ave, in the South End.

With the new turnaround, you can drive to the Allston-Brighton tolls and then reverse direction, back into the city, exiting at Prudential. (I guess you could have always have exited there and taken Storrow Drive back in, but I never thought of that before.)

Source: Ramp Opens To Fast Lane, E-Z Pass Users – WBZ-TV

How are you dealing with this recession???

great depression* The National Association of Business Economists’ latest survey has 45% of its members predicting a recession this year—over double the percentage of three months ago.

* Warren Buffett: “I would say, by any commonsense definition, we are in a recession.”

* Economist Edward Yardeni, economist: “I think we are falling into a consumer-led recession.”

If this is a recession, I’ll take it:

Massachusetts workers averaged $1,008 in pay each week, ranking fourth-highest among all states nationally in the second quarter of 2007, according to figures released Tuesday by the Bureau of Labor.

The BLS found employment grew in Massachusetts by 1.2 percent in the quarter, the same as the U.S. … [w]age growth in the Bay State was 4.8 percent …

Among the 328 largest counties in the U.S., average weekly wages in Suffolk County were $1,284, ranking it ninth highest in the country. [emphasis, mine].

If you want to discuss this further, I’ll be at Rocca.

Source: Mass. workers average more than $1,000 per week in pay – Boston Business Journal

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