Developers Propose Ways to Cut the Cost of Building Housing

Several prominent real estate developers are looking to shake up the city’s physical landscape, both figuratively and literally.

The Associated Contractors of Massachusetts (AGC) held a “What’s Next? Leading Developers Share a Vision for the Future” forum in Boston on Tuesday and topics came up that suggest the way housing gets built in Boston might be changing.

In a Boston Business Journal story posted after the forum, John Hynes, CEO of Boston Global Investors, the developer of Seaport Square, is quoted as saying:

“Most of the affordable housing audience don’t want to live at the Mandarin Oriental or an AvalonBay tower, they really don’t,” Hynes said. “They are not comfortable, they don’t want to live there. Believe me, I have family members who are affordable housing candidates, they teach, they have middle class jobs, they don’t want to live in the Seaport. They want to live in Upham’s Corner, Field’s Corner or Brighton. Take those sites.”

That seems a shocking statement at first glance (who doesn’t want to live at the Mandarin?), but his comments actually make a lot of sense.

While it seems like everyone wants to live downtown, it’s congested and it has other problems. If you’re a middle class couple with a car, child, and dog, it is difficult to coordinate your life out of a 24th-story apartment tower with parking in the basement. (Yes, plenty of people are doing it right now in neighborhoods such as the South End, but no one would consider the majority of those people as being “middle class.”)

John Hynes isn’t talking about “affordable housing” in the classic sense—these aren’t “projects;” they’re apartments and condominiums that can be offered at prices affordable to the middle class. To make this distinction, it’s often called “workforce housing” to differentiate it from the other types.

Unfortunately, the way it is today in Boston, as in most large cities, just two types of housing are getting built: low-income housing for the poor and those receiving assistance, or luxury and “super luxury” housing affordable only to the wealthy. The middle class has been left to fend for itself.

Now, developers seem to be willing to address—or, at the very least, admit—that the current way of doing things just doesn’t work.

Fortunately, earlier comments from Mayor Marty Walsh and members of his administration seem to suggest developers and city hall are on the same page.

So far, this is what interested parties are recommending:

• Build in outer neighborhoods where there is more land, so there can be less density, putting less stress on communities;
• Use city-owned land to cut acquisition costs, perhaps to zero;
• Negotiate union contracts to mitigate high labor costs;
• Streamline permitting and zoning (recreate the Boston Redevelopment Authority);
• Offer incentives (subsidies) to developers to build in neighborhoods other than downtown.

A few of these ideas are already being considered and in January, the city’s new mayor called for a complete audit of the Boston Redevelopment Authority. The results of that audit are due any day now (having been promised by the end of April).

It’s beginning to look as though residential housing development in Boston in the 21st century will be built three different ways:

• Luxury housing for the upper class built with private money in the most-desirable neighborhoods (Back Bay, Beacon Hill, South End, Seaport District);
• Low-income, subsidized housing projects built /expanded throughout the city funded largely by the federal government (the undergoing rehabilitation of the Old Colony housing project being one current-day example);
• Middle-income, workforce housing built in the city’s outer neighborhoods on city-owned and privately held land, perhaps with restrictions on rents and resale prices.

Boston isn’t alone in dealing with the problem of high demand and limited supply when it comes to housing its residents. This conversation is happening in the boardrooms and city halls across the country. It will be at the forefront of addressing the issue if it is able to pull off building more housing for its middle class.