I found a great blog the other day. While it isn’t solely
focused on real estate, he does have a section devoted to it. Last month the author was
writing about the Fenway, but in a wider sense, about construction in the city and supply and
demand, overall. I have cut and pasted part of his post, along with a reader’s response, and
my response to that response, below.
Housing Woes
“Steve Bailey details the troubles of the
Fenway Community Development Corporation in maintaining its own goals of affordable housing. It
seems that the Susan S. Bailis center on the edge of the South End is trying to convert affordable
units to market-rate, because the overestimation of market demand has led to a fiscal shortfall in
the project. This, Bailey argues, should give pause to the FCD’s recent obstruction of
Northeastern’s attempt to create more student housing in the
area.
…
This obstructionism is part and parcel with
a mentality that sees luxury high-rise construction as bad because average people can’t afford to
live there. The way I look at it, the more places well-to-do people have to live, the less likely
they’re going to be competing with places I might actually be looking at one day. This is not to
say that the market solves everything; it doesn’t. Nor does it mean that affordable housing
requirements in new construction are a bad thing. It simply points out that creation of new housing
is the thing above all else that’s going to ease the difficulty in the long run of average people
to afford their living space.”
Adam G’s
response:
In theory, you’re right. The problem is this is no longer a
rational market, where increased supply inevitably leads to reduced prices. Demand is down (as
indicated by stats showing houses are staying on the market longer) and yet prices continue to go
up.
When two-bedroom condos in rehabbed townhouse apartments in Roslindale
are going for $400,000, when WBZ runs ads for seminars on how to make money in real estate,
there’s something else going on beyond a shortage of units (and is there really one? Back in 1950,
Boston somehow managed to fit 800,000 people in the same basic space now occupied by barely
600,000). Can you say speculation?…
My
response:
I know this comment is coming a month after your original post,
but I just wanted to take issue with what adamg said. Actually, I don’t really know what he
said…something about 800,000 people in 1950 vs. 600,000 now. I’m not sure you can make that
comparison.
I don’t know how many housing units there were in 1950, nor do I know
how many there are now, so his comment that in 2005 we are fitting 600,000 people in the “same
basic space” as in 1950 might not be true. The city has changed drastically, since
then.
For one reason, in 1950, two neighborhoods existed that are no longer there –
the “New York Streets” neighborhood (where the Boston Herald is, now) and, of course, the
West End (where Charles River Park is, now). That might mean lower number of housing units exist
today (a fair guess, seeing how dense the West End was and how sparsely populated is Charles River
Park).
For another, the majority(?) of housing in the South End, and probably the
Back Bay, too, were rentals and single-resident-occupancy (SRO) units, meaning there was a greater
density of people (and, in fact there are regulations now which lower the people per floor…what
is that called, FAR?). There is less housing available to people in those two
neighborhoods.
There hasn’t been much residential construction (to-own), in fact,
since the 1950s. I can’t think of many projects, at all, except those that started within the past
five years (Ritz, Grandview, Belvedere, Atelier…wait, is that it?). Housing units have gone from
single families, as originally constructed in the 1800s, to apartment buildings and/or SROs, to
condominiums (in the 1980’s) and now in some cases back to single
families.
Actually, the number of housing units in the city over time may be a very
important statistic in all of this. It warrants more research.
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Updated: December 2017
