Boston is booming.
It is a success story of urban redevelopment and transition to the 21st Century. It has become a great American city again.
Jobs in Boston are being created faster than housing is being built.
I worked for Boston's mayor and the Bicentennial program to celebrate Boston's role in the American Revolution. (The revolution started early in Massachusetts. The Boston Massacre was in 1770; the Boston Tea Party was in 1773; and the shots heard round the world were fired in Lexington and Concord were in 1775.) One element of life there was not a problem. I paid $160/month for a nice one-bedroom apartment, about 20 percent of my income. I could walk to a subway stop and commute to work downtown. I was a fish out of water there, and I wanted to escape the politics of ethnic rivalries I didn't understand. I moved back to my hometown: Medford, Oregon.
In that same period, college classmate Larry DiCara -- Boston-born-and-raised, a graduate of Boston Latin School -- had been elected to a seat on the Boston City Council. Just 22, he was the youngest person ever to serve on that body. He did not leave Boston. He dug in, continued on the City Council for a decade, became a lawyer and civil leader, and for the next five decades and into the present has been a key player in the physical and economic development of Boston.
Prosperity brings problems of its own. Boston is expensive.
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| Larry DiCara |
Guest Post by Larry DiCara
I grew up in a poor neighborhood in a poor city. My grandfather paid $18,500 for a two-family home in 1956 because nobody wanted to pay any more. I rented cheap apartments when I was young, as did all young people in Boston in the 1970s.
Boston was on its knees. Our population was reduced by over 250,000 in the course of 25 years; a loss of 30 percent. As a result, there was no significant demand for housing. When the Desegregation Order was implemented in the mid-70s, families disappeared. There were arson rings. Some of them included members of the fire department and the police department. This followed a series of economic sucker punches, including the closing of major employers such as Plant Shoe and Walter Baker Chocolate and then the Charlestown Navy Yard and the Army Base in South Boston. Furthermore, as a result of high interest rates, construction slowed down significantly. My contemporaries would relocate to Texas to get work and come back to visit once a month to pay the rent.
All of this has changed now that we are a city dominated by educational and medical facilities where people toil with their brains rather than their brawn. There are fewer poor people, many of whom live in some type of affordable housing.
The other aspect of no longer being a poor city is that we are city full of young people, many of whom are single and who have great jobs and who want to live near a transit line, even if the MBTA may not work on a regular basis.
As a result, younger, mostly single people without children have replaced, and arguably displaced, families, often single-parent families with children. Those without children pay less for food, sneakers and jeans, and therefore can pay more for rent. Let’s not even try to calculate the cost of childcare! Two, three or four wage earners can pay more for rent than one or two. Not surprisingly, the school-aged population continues to decline, despite an influx of immigrants, even as the population has returned to the levels of the 1960s, when the Boston schools had over 100, 000 students
These are the normal rules of economics. I think it was Chapter four in Professor Paul Samuelson’s book which so many students read in the 1960s and 1970s. When there is a great demand, the price goes up. When there is less demand the price goes down. The only way to solve the problem is to build more housing -- lots of it -- which means we must override discriminatory local zoning laws across the Commonwealth.
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5 comments:
The cost of housing is a serious issue. So is the cost of education and healthcare. The U.S. is the world’s wealthiest nation, but over 40 million people live in poverty. Over 650,000 are homeless. About 1 in 10 people don’t have health insurance. The three wealthiest families in the U.S. now own more than the bottom half of the country. Sometimes Berniie Sanders makes a lot of sense.
If jobs and economic opportunity were widely distributed across this country and not concentrated in just a few cities, there would be no housing problem. There would also be far fewer “deaths of despair” and a much smaller opioid crisis.
Anyone who thinks that suburban homeowners will happily accept a major deterioration to their quality of life in the form of multifamily housing jammed in among single-family houses is politically naïve, to say the least. Ditto for anyone who thinks that young families are clamoring to live in urban high-rises instead of their own house with a yard.
There’s a lot of noise from political elites these days about YIMBY. It’s just another indication of how out of touch our elites are. The real solution will have to be the economic revitalization of our exurban and rural areas.
Housing costs in Medford have become outrageous. A new studio apartment just built at the corner of McAndrews and Central Avenue costs $1,300 monthly. It's a lousy location with high-traffic, built in a scuzzy area. How they can justify $1,300 monthly for a studio apartment is beyond me.
Appreciation for identifying the nub of the problem: "we must override discriminatory local zoning laws across the Commonwealth". NIMBY is extremely difficult to "override". It's like a disease from which all homeowners suffer, including me. If you are a homeowner, examine your conscience. Doesn't something inside you oppose building low-income housing in your neighborhood? Of course, as you all point out, median income is the new "low income".
A second disease, which I don't see identified in these comments, is the financialization of housing. First, there was the CMO, the slicing and dicing of residential mortgages to the point where your mortgage payment went into an enormous bin of money and became separated from any relationship to the underlying property. (Remember 2008?) Then there was the REIT. Now there are nationwide rental property conglomerates that control broad swaths of the rental market. More concerning, there is RealPage, where landlords can use AI to collude without creating a trail. Homebuyers: 0, Investors: 100.
Apart from zoning and NIMBY, there is a second factor in housing cost rises. It is the financialization of real estate. First there was the CMO, where mortgages were sliced and diced to where they had no relationship to the underlying properties. Mortgages became financial commodities like any other. Except they aren't. Remember 2008? There there was the REIT. Now we have rental conglomerates that purchase condos, high rises, and homes and turn them into rentals, undercutting family home buyers. More concerning, we have RealPage, which lets real estate corporations collude without a trace. Homeowners: 0, Investors: 100.
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