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amos106 OP t1_j6nm0rt wrote

Reply to comment by Infamous-Client-2528 in High Density Housing Development Near South Shore Plaza Receives Pushback by amos106

The developer wants to charge that because that's what the market value for rentals is. The market's value of rentals is set that way because there are more people looking for housing than there are actual units to rent.

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3720-To-One t1_j6o2go5 wrote

I don’t know why this is so hard for people to grasp.

I swear people think that these developers/landlords just pull numbers out of their asses.

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oby100 t1_j6o8f0e wrote

That is what people think lol. There is SOME cause for concern about price fixing on rents, but again, the only way to combat high rent prices is to increase supply

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jWalkerFTW t1_j6oe7ud wrote

So when, in this long line of supplying the wealthy flooding into Boston with housing, will we get around to supplying housing to the low-income who live here? What do we do to help them in the meantime? And how do we prevent the increase in housing simply attracting more wealthy people in a never-ending stream?

EDIT: ITT idiots who think I’m suggesting we don’t build new housing at all

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Squish_the_android t1_j6of0gp wrote

Increasing the housing supply of any kind brings down prices for everyone.

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jWalkerFTW t1_j6ok55o wrote

Sure, if you ignore the effects of affluent housing turning the surrounding area more affluent, attracting even more affluence and pushing out low-income folks

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3720-To-One t1_j6ojfl3 wrote

So when there is a limited supply of housing, who do you think is able to pay more for that rough around the edges Allston apartment?

Some working class person, or a software engineer?

When those “luxury” units get built, affluent people flock to those, vacating less affluent spaces.

And those affluent people who come here from out of town, were coming here regardless.

So your choices are to build more housing, or watch prices continue to soar.

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ik1nky t1_j6ok48x wrote

Well we have inclusionary policies, so all new market rate housing over 9 units brings affordable housing along with it. We also have good evidence that both market rate and affordable housing construction decreases displacement.

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jWalkerFTW t1_j6oktaw wrote

Oh for sure it’s a balance. Although “affordable housing” according to the City of Boston is 70% AMI which is completely asinine and puts a big damper on the “inclusionary” policies

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amos106 OP t1_j6ot3cz wrote

The fact that affordable housing is 70% of the Area's Median Income is likely due to survivor bias. If the market doesn't have enough housing supply then the prices will go up until they consume larger and larger portions of people's income. Eventually the people on the lower end of the income spectrum are forced out because the housing system is market based and the winners and losers are chosen according to who can afford rent. Inclusionary polices cannot solve a supply problem, and the market but its very design will leave low income (often synonymous with underprivileged and marginalized) people holding the bag.

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jWalkerFTW t1_j6owvqh wrote

You can just lower the required AMI percentage though. I mean, that’s literally what urban planners are advocating for. This isn’t a “well the market is God and we can’t do anything about it” situation.

EDIT: I think you might be confused. The cities official requirement to meet the “affordable housing” baseline is 70% AMI. That’s the rule. I’m not talking about a market result.

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amos106 OP t1_j6p0juo wrote

Yeah that's true and it would reduce the cost of living for those who do make it into the program, but the affordable housing program is already overloaded as it is and the winners and losers are chosen by a lottery system. Even if the AMI requirement is lowered it would just put more stress on the affordable housing program without actually creating any additional housing, and as it stands the program is already being forced to turn people away. Unless more housing is built the program will further solidify itself as a poverty trap since increasing your income would drop you off a welfare cliff, and the market prices will only keep rising until more units are built.

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jWalkerFTW t1_j6p2ag0 wrote

Well yeah, again I’m not saying we shouldn’t build more housing at all

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dxbaileyy t1_j6p1voj wrote

The private sector has no reason to build low income housing. If you factor in the cost of land, labor, and materials then there would be little ability to charge below market rates. Low income housing can really only be built by the state or city unless there is some magical developer who is willing to lower their profits.

The addition of newer units to the market should eventually lower the price of older ones. It may not be a perfect solution but it will still help.

Finally, to address how do we stop the “never-ending stream of wealthy people” moving here- we don’t. These people will continue to come here regardless of how much housing there is but if there aren’t enough newer/higher end units then they will opt for the older ones like they do now.

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jWalkerFTW t1_j6p2gbn wrote

Except there are already requirements for public developers to include affordable housing. The required percentage of AMI just needs to be lowered

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RoaminRonin13 t1_j6ojcld wrote

There’s also the cost to build this, which won’t be cheap for the developer.

Everyone is always pissed at the greedy evil 1980s movie villain developer, but the reality is that they’re not necessarily making a killing (at least right away) on a new build $2500/month 1BR.

Don’t get me wrong, plenty of developers are greedy bastards. But that this sub thinks the market will magically produce “affordable” housing on its own is a joke - everyone building this new housing needs to get paid, or it’s not going to get built. That’s going to set some kind of floor on how low the rents / sale prices can realistically be on these new buildings, unless the government steps in to help reduce costs.

Assuming that 1BR is ~900sf, and a sf cost of ~$300, it’s about $270k to build. At $2500/month that’s ~ 9 years for the developer property manager to get their money back on the unit. Over a decade, then, from when they made their initial investment in the property pre-construction. They can reduce that $300/sf cost, of course, to pull those numbers down - my point is simply that this isn’t the magical money printing machine for the developers and property managers that everyone seems to think it is.

If it was there would be more multi-family housing being built, zoning and NIMBY problems or not. You find ways through those things if the money is right (look at all the lab space we’ve built).

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