ABN Town Meeting II: "There Goes the Neighborhood! Gentrification, Affordable Housing, Middle-Class Housing, or None at all?"
May 15, 2002


Summary of Participant Comments

Sections:
INTRODUCTION
SHOULD WE BUILD MORE HOUSING IN BOSTON?
WHAT KIND OF HOUSING DO WE NEED IN BOSTON?
WHAT ARE THE OBSTACLES TO BUILDING MORE HOUSING?
WHAT ARE THE CONSEQUENCES OF NOT BUILDING MORE HOUSING?
HOW SHOULD WE DEAL WITH THE ISSUE OF AFFORDABILITY ?

INTRODUCTION

The meeting was intended to look at the housing controversies surrounding housing supply and affordability for residents living in Boston and the metro area.

One dimension of the problem is simply the severe shortage of housing units in Boston and the surrounding metro area, and the obstacles to construction. Background information in the Fact Sheet and several display boards of media clippings, gave the statistics on supply and demand, the trends in housing prices relative to income, and the resistance of current residents, both urban and suburban, to new housing growth. This topic, consistent with the theme of understanding our choices and their consequences, was considered important territory for a public discussion.

During the meeting, much of the conversation continued to revolve around affordability. As recognized by the participants, housing cost increases are due in part to supply shortages, but the affordability problem is also rooted in the nature of markets in this society and our cycles of rising and falling government intervention:

  1. Developers do not want to build housing affordable to current needs of moderate- and low-income people, preferring to seek the higher profits of the luxury niche.

  2. Federal and State governments have slashed commitments to subsidized housing, citing budget constraints and to cost-regulated housing, claiming that the markets, without incentive-stifling interference by government, will solve the problem.

  3. Twenty-five years of wage stagnation, and the concentration of wealth in fewer hands, have created a huge affordability gap, where existing stock is dramatically bid up by those who can afford it -- or who are able to borrow enough and willing to live in deep debt -- while many workers simply cannot earn enough to pay their housing costs.

The discussion acknowledged the tension between personal life-style preferences and the common good, and began to touch on the class and race issues that underlie much of the housing issue, and on questions about markets under capitalism today as a viable framework for meeting housing needs of the population. The shrinking, yet indispensable, role of government in supplementing the market, both as regulator and as funder, was an important focus.

The comments and question raised during the meeting, and afterward in personal communications, are grouped by the questions put forth for discussion, as follows. They are edited for brevity and clarity; repeated comments are stated only once.

SHOULD WE BUILD MORE HOUSING IN BOSTON?

  • Boston's now has 589,000 residents, but the city population was as high as 800,000 in the l950's. So there is space left in the city, since people left for the suburbs, but not everywhere; some neighborhoods have little space, such as Back Bay and South End. New housing has to be distributed fairly and reasonably among the neighborhoods.

  • Housing has to be balanced with open space, especially when people are living in multi-family units, and they need accessible open space.

  • New housing units must be built, including infill on long-vacant parcels.

  • Building homes must be done in conjunction with building communities --- schools, local stores, neighborhood and civic facilities, etc. We have to think about building all the other things people need when we build housing.

  • We should build more housing, because the supply is not meeting demand. And all but the highest end housing has an effect on the overall supply available to provide for unmet need.

  • We shouldn't build housing on land that has natural resources we should share, such as waterfront areas, even though that land is now in demand as amenity for luxury housing.

  • We need to figure out how to meet our housing needs without sprawling at the edges, using up farm fields and open space. This means building more in Boston and other urban areas.

  • There is no housing for people moving here from other parts of the country. There is a particular problem with supply here; much more housing is built elsewhere.

  • A Northeastern study said that the metro area will be 36,000 housing units short over the next 5 years, beyond the current level of production.

  • We can add to the housing supply in other ways, besides new construction. There are many empty units in multi-family buildings owned by the elderly. Many times the elderly don't want to rent the vacant units because of the aggravation. Reverse mortgages for "house-rich" but "cash-poor" elders can free up these under-used houses, giving the elderly the money they need for a more manageable smaller home while their larger house is made available for multiple users.

  • We are already too crowded; let the suburbs build more housing. They have more open space, more money, and more buildable land, and are keeping people out by large-lot zoning to keep their school budgets down and to protect their property values from what they see as harmful "density," fearing crowding and traffic.

WHAT KIND OF HOUSING DO WE NEED IN BOSTON?

  • We are an aging population, and we need to allow higher buildings with elevators to accommodate people who can't walk up flights of stairs.

  • We need a balance of affordability, size of units, single family vs. multi-family.

  • We need transit-oriented housing development, so we don't bring in more parking competition and more traffic when we build housing. And we need to reinforce the constituency for public transit, which won't happen if everyone has a parking space and gets used to driving everywhere. This means more density of housing and more mixed-use development, so the things residents need are in walking distance. And it means building where there is already good transit, or making sure the transit will be built along with the new housing.

  • We need family housing; people with children are being driven out of Boston as their families grow, or just don't move in. Most housing available now is in 1-2 bedroom units; the City should mandate that a certain percentage of units are built with more than 2 bedrooms, including some of the affordable housing. We have a growing population of immigrants with children who need to be accommodated.

  • High rises don't build communities. The people that live in them feel (and often want to feel) removed from the street and don't care about the quality of the pedestrian life. And they are usually wealthy enough that they don't have to.

  • We need rental units. The tax law changes of l987 made it less advantageous to build multi-family rental units, so the numbers have dropped drastically. Since l990, Boston gained 5,000 ownership units but lost 4,000 rentals.

  • We want small, community-based projects. Remember, people who buy triple-deckers and fix them up are developers, too, but owner-occupancy makes a big difference in the contribution of that housing to the community. And this kind of housing provides equity for education and retirement for the property owner.

  • People want housing in the city and want urban amenities, but they want it to be like life in the suburbs, with no traffic jams and plenty of space for things like big dogs. People living in the city should realize have to give up certain suburban expectations, and in return they would gain a lot from life in the city. How much space do we actually need? Can we live in smaller places as a tradeoff for being closer to amenities? Can we live closer together?

  • We should build more housing, but if we want good development and developers, we need good democratic processes with meaningful input and good neighbor agreements. People shouldn't be bought off with amenities in reviewing project proposals.

  • We have to get the City to be responsible, and respect neighborhood plans.

WHAT ARE THE OBSTACLES TO BUILDING MORE HOUSING?

  • We have an instinctive reaction against building anything. Any kind of change is seen as threatening. We bought into a certain environment because we liked it this way, we know how to deal with our surroundings as they are, and we don't want it to change.

  • People feel that if we add much more housing to the city, we will lose quality of life. Already, City services don't keep up with need. And high density brings traffic and parking problems, because transit is far from adequate to make life possible without a car in most of the city, and prospects for better transit are dim.

  • People are afraid that the neighborhood is changing, with restaurant chains replacing neighborhood restaurants, an increase in the number of cars, and a geographic divide based on income and ethnicity.

  • Neighborhood residents, of any income, tend to resist the construction of affordable housing. We have to convince people that affordable housing, if it's properly built, doesn't affect the values of surrounding properties; you need only look at the South End to see that. And high property values aren't necessarily desirable since they mean high property taxes.

  • We need more housing in Boston, but it needs to be balanced across neighborhoods; one obstacle now is that Boston's neighborhoods are working in isolation, and each feels that it is being asked to take an unfair share of housing burden. By working in one neighborhood at a time, there is no sense of overall housing targets or distribution strategy.

  • Bostonians are particularly averse to high-rise housing, which has served as a safety valve for other cities. If the City could zone for more mixed-use, high-rise neighborhoods, this would help. People don't want to accept it, but if we don't try it, we'll never know if it works. The relatively high-density "streetcar suburbs" areas like Beacon Street, and 15-to-20-story buildings around the city, work well.

  • People don't want high-rises because they bring cars, with parking competition, traffic and noise.

  • No neighborhood wants a high rise. Mattapan doesn't want 4 units built together as a unit, let alone high rises. Neighborhoods don't want high rises, because these were the public housing "projects" in the past; they are afraid of that. People want suburban-looking homes in Mattapan. That's the only way they think they will upgrade their neighborhoods.

  • Residents of East Boston are very concerned about high rise apartments on the waterfront that will wall off the waterfront from residents and block sight lines. It is better to upgrade existing housing than to build on environmentally unique land such as the waterfront.

  • There is a misconception that density requires height. Somerville is the densest city in American, and Cambridge is close, and they are very low-scale communities. We don't need towers that create menaces like wind tunnels.

  • Many of us don't want to see housing built under Boston's current policy, with 90% going to market rate. This drives up prices and taxes.

  • The universities are the only ones building housing, but that is mostly for more students, or for faculty, and often takes up neighborhood land that could have been 100% community housing.

  • The universities are building on land that could be used for affordable housing. They pay no taxes and are not an asset to the neighborhoods. MIT bought the clock complex and just sat on it until people forgot that it used to be a neighborhood. And Northeastern will build more condos. Universities are not doing community building.

  • Hundreds of low-income units are being lost in the HOPE VI program. Mixed income housing is never converted to low income housing; only the reverse happens, with low income housing being converted into mixed income, so that low-income units are lost. Technically, there may not be displacement, if these units were unoccupied because they weren't maintained decently, but that doesn't justify eliminating them from the supply when the projects are rebuilt; they are still needed.

  • The City has to be on top of property management; the quality of some mixed-income housing is so bad that it is not attracting people who can pay market rate.

  • Why is it so difficult to develop housing? Nonprofits can only do so much. We need private developers as well. It can take very long (4-8 years) to develop a project. The risk involved makes it difficult to move forward. Community people are always concerned that proposed housing is not exactly as they want it, so they oppose most projects, but we need more supply, which will help everyone.

  • Developers say that building in the city is more expensive for a variety of reasons, including: cost of capital, cost of land, inclusionary zoning demands, time-consuming community processes, permitting requirements, and linkage payment burdens.

  • Based on what developers say, there are six things the City could do: select areas to increase zoning concessions, reform building codes, allow garden apartments, eliminate development taxes, adopt a more standardized procedure for permitting, and provide greater certainty and predictability in the development review process.

  • The BRA and private owners control most development parcels. This creates competition for land between community developers and private developers and drives up prices, making housing less feasible.

  • One obstacle for developers is that it can take a long time -- months or years -- to get to construction. We have to fast-track the funding process.

  • If Boston had a planning process that allowed developers to predict their costs, they would be more likely to build. The one item that developers cite most often as an obstacle is the uncertainty on how much it will cost in the end to build, depending on neighborhood desires or opposition.

  • We live in a capitalist system. We need real leadership in the City of Boston. Citizens have to hold City officials accountable. We have to make the City spend the time and money to get housing built.

  • Part of the problem is a suburban problem. The suburbs are interested in protecting open space and ensuring they get no new kids in their schools, so they want to only get the highest end housing, which pays high taxes, and is a positive cash flow for the towns. We can only address this by changing the state financing system.

  • Why are we still able to build office buildings in Boston when we can't find a way to build housing?

WHAT ARE THE CONSEQUENCES OF NOT BUILDING MORE HOUSING?

  • We have to expand the supply or we'll always have high prices. In 1972, housing prices were below the national average, by 1980 they were above, and by 1990 they were 2-3 times the national average.

  • If we don't build enough housing affordable to working people, our homeless rates will keep rising.

  • If we don't meet housing demand, people will move away from the city and the state. We have already lost labor force because of housing costs.

  • If we don't build, we will lose diversity and balance in the population; only the wealthy will be able to live here, or the very poor.

  • We will keep using up our farmlands and natural open spaces further from the cities. It will take a long trip to get "out to the country" --- and there won't be much country when we get there.

HOW SHOULD WE DEAL WITH THE ISSUE OF AFFORDABILITY ?

  • We need to make home ownership more possible for those at 60-100% of median income.

  • No one in the private sector wants to build affordable housing because it's not profitable. In the 1980s, lots of affordable/mixed income housing was built. We have to have a political commitment from the public sector.

  • Roxbury Corners (134 Northampton Street, Roxbury), an award-winning mixed-use project with housing and retail, is replicable today, but it took a lot of help from the City, including financing. It is a mixed-income lease cooperative with 54 units and 5000 square feet of retail space, plus a community room. It has about 30 low income units, 10-12 moderately-priced units, and the rest are market rate. And the market rate residents are "real" market rate payers, which is unusual since market rate payers don't always want to live in mixed income housing. In Tent City, most market rate units went to students.

  • One of the problems with affordable 3-4 bedroom units is that once people are in them, they never leave since they know they won't find anything similar.

  • Historically, the way to create affordable housing was triple-deckers. These give neighborhoods a good balance between ownership and rentals (if the owner lives in the building), and give people an opportunity to build equity. Encourage the building of more triple-deckers.

  • We need to use city, rather than metro-area, median income figures to set affordability targets. The Area Median Income is about $55,000, and the Boston city median is under $40,000. And in some neighborhoods, median income is much lower (for example, Chinatown, $12,000), so we need to look at that when we judge "affordable" development in a community.

  • Developers need to create partnerships for mixed income housing. It's important to have all levels of housing prices in a neighborhood, not only low-priced housing. Mixed income housing allows people to move through homes in stages; now in many neighborhoods with a lot of affordable housing, like Roxbury, there is no new housing stock for potential buyers. People who make a moderate income -- the "tweeners" -- are caught in the middle; they make too much money to qualify for affordable housing, but too little to purchase market rate housing. Home-ownership instills pride. And people with higher incomes bring something to a community - things like better schools, good restaurants, and taxis.

  • Location Efficient Mortgages should be encouraged, to allow someone buying housing near transit more purchasing power since they're not spending as much of their income on automobiles. While in a traditional mortgage, 30% of your income can be devoted to housing, whereas a Location Efficient Mortgage allows the buyer to spend up to 38% of income on housing, thus giving the buyer more purchasing power. Mass Housing has a new program in Boston: Buyers who demonstrate they are regular "T" users can qualify for a mortgage in which they can spend up to 38% of their income on housing; further, there is no down payment. Mass Housing will insure the mortgage, and 21 banks are participating. Information about the program can be found at www.masshousing.com.

  • We need low income housing in Chinatown. There is a great disparity among housing costs; we still have poor quality SROs costing $200-300 monthly, but all the new construction is luxury condos and rentals. Current renters are being pushed out because they can't afford the rising costs. We have to go back to the 1949 goals of the Affordable Housing Act, so that the working poor can stay in their neighborhoods.

  • We need government regulation and enforcement to preserve housing that's currently affordable. Lots of owners of affordable housing are opting out into the open market, after getting their public subsidy.

  • How do we keep our current housing stock affordable for the next generation? And how do we keep it stable, given real estate speculation? It's impossible to convince people not to "go for the cash" when they get a good offer to sell their home.

  • A lot of affordable units are being built that give the owner the ability to resell at market value, so they do cash in. And we need to keep the provisions of the state law called the Fair Plan that governs insurance.

  • There should be a cap on how long buyers of affordable housing have to keep it, and also a cap on what they sell it for. Affordable housing has been subsidized, so if sellers make a profit they are doing so at others' expense; if owners want to leave their affordable-housing status for market rate housing, their profit should be subject to a cap.

  • How do we control gentrification? Through government regulation? Is it possible in a capitalist economy? Can we set limits on a person's profit in order to preserve affordable housing, neighborhoods, and historic districts? We need to get back to valuing community.

  • There are two groups of people insulated from price fluctuations: those in affordable housing, and homeowners. But in Fenway, only about 8% of the residents own their own homes. So we either need to get more affordable housing built, which is tough, or increase the rates of home ownership, which also is tough to do in a boom economy.

  • What is affordable housing? If it's the federal standard of 30% of household income spent on housing, that may be a big burden for some. We can't define it as percent of income; it depends on what else you need in order to live. So, for example, if you don't need a car, you can afford to spend more on housing. If we are talking about 30% of Section 8 grants, the renter's burden is more like 40% because of deductions for Social Security and other costs. And this is not affordable at the low end of the income range. Economic models have gotten a lot more sophisticated, so if we have to use models or formulas we should get better ones. But fundamentally, affordable should mean that everyone living in a neighborhood can afford to stay.

  • There is a myth that if you live where you grew up that you're a loser. People used to live most of their lives in one place, but that has changed. Now, real estate is a commodity, not a home. So it is subject to investment speculation, which inflates prices for reasons unrelated to actual housing value.

  • New York is much more voracious about protecting affordable housing. They have laws that protect SROs and they have rent control. It's a political process.

  • The group making 80% of area median income includes people like nurses and teachers; it is not a poverty level, but a working level. There is misinformation on what is affordable. Affordable housing isn't low income; it also addresses workforce housing. There's been an emphasis on affordable housing, but the middle class is also important.

  • Should housing be permanently affordable? Should poor people who buy affordable housing never have the chance of building equity when they sell their home? Is it fair for someone not to be able to experience appreciation of housing prices? If you asked whether low income people would want to buy housing if there was a cap on what they could sell it for, the answer would depend on their alternatives. If it's to move to Brockton or Fall River, they'd take the cap in order to get into housing here.

  • There is a model for preserving low land costs used for agriculture, called APR (Agricultural Preservation Restriction): the State pays farmers for their development rights, to keep the land permanently in agriculture. Why can't homeowners get the benefit of similar subsidies but in return they have to assure that they won't raise the price when they sell? And there's another model in water resource protection, where the first preference is for conservation, the second for more efficient use of water, and the last resort is importing water from another watershed basin. If applied to housing, our first preference would be to rehabilitate existing buildings, then the second is infill development, and the third is new units that fill needs in the neighborhood, and the last is market rate housing. The mechanisms for accomplishing this are through zoning and mortgage policies.

  • And we also need rent regulations. The market soared when rent control ended. Rent control has got to come up again; the old system had problems, but we need some version back.

  • The market was rising before rent control was lifted, so you can't say that's what caused the market to rise. Rent control asks property owners to do something we don't ask any other provider of basic goods and services to do; we don't control food prices, or medical care prices. Rent control provides no incentive for new construction, nor for property maintenance. And a lot of the benefit was going to people who didn't really need it.

  • We have to find a way to say to developers that they can't make as much money as they want, if it's at a cost to the city or town. All land use is regulated for the good of the whole community, and like zoning, regulations on housing are necessary to be sure the community needs are met.

  • We need new affordable homes, and we need to pay attention to dispersion. West Roxbury, for example, has a disproportionately low amount of affordable housing.

  • We have to have livable wages. The reason people at all but the highest income levels can't keep up with housing prices is that the real "livable" wage here is over $20 per hour, and most jobs just don't pay enough; they haven't kept up with inflation.

  • Greater Boston Interfaith Organization (GBIO) is about to build 1000 units of housing; they have the money and are working on getting the land. They're working with the BRA on 170 2-family units in Mattapan. These units will sell for less than $200,000, with an owner living in one of the units and the rest rental. The program GBIO is allied with, Nehemiah Homes, keeps costs down with economies of scale in construction, and by negotiating for large tracts of free public or low-cost land.

  • Poorly built inexpensive housing is hard to maintain, and there is less interest in maintaining them for the long run, so they are often lost to neglect.

  • Many people don't trust city public schools, and housing affordability is decreased if they have to pay for private schools.

  • Development doesn't happen in a vacuum; when luxury condos go up they have an impact next door when that owner decides they can upgrade and charge more rent. We need standards for the community through master plans, and make sure it is enforced.

  • No government agency will invest the money needed to change the market, so we need to work with developers. What incentives can the City offer?

  • Government has always needed to subsidize the bottom third of the housing ladder because our market as it currently is structured just doesn't take care of this income level.

  • We need alternatives for new homeowners to help them afford units without having to take out huge mortgages or charge huge rents. When that happens, renters get forced out. We should preserve our existing affordable units, but Tom Finneran is sitting on the legislation to make this happen.

  • People shouldn't be able to leave buildings vacant and get a tax write-off.

  • The City has built in the South End, so they know how to do this. They've built 1,000 units of market rate housing. It's just that they don't care about affordable housing, and private developers will only build the minimum required. Government has the ability to do this, and if they won't, it won't happen