Right before the most recent meeting of the Roosevelt Institute group on housing poluicy I’ve been attending for a few months, The Boston Business Journal had an article on why developers weren’t interested in building middle income housing.
According to The Journal, the developers want subsidies, cheaper labor and cheaper land. I can’t exactly blame them for wanting to make the most money with the least risk, but the fact is, the track record of developers working with the government is not good. Not only should people building luxury condominium towers should not get subsidies, but all inclusionary zoning has done is made neighborhoods more anti-development than they were before while providing very few affordable units at an enormous cost to the taxpayer.
Not only that, but the affordable housing sometimes isn’t even affordable. According to Reason, a number of new affordable units in New York City are slated to go, not to poor families, but to families making up to four times the city’s median income. This is cronyism.
It is also a problem with developers in general. Simply as businesses competing in a highly regulated market like Boston, they’re going to want to game the system in their favor, but more importantly, if you invest a few million dollars into a project, you need to make a few million back just to break even. You need to make even more back for debt service and mortgage payments.
Considering the delays and design modifications that are necessary to win approval for projects, luxury housing and subsidies are the only way forward for big developers.
Small developers, like individual homeowners (or developers specializing in small projects) would face fewer financial obligations, but begin to run up against zoning restrictions and the neighborhood associations.
In Boston, almost every modification that can be made to a house must be approved by the Zoning Board of Appeals and the neighborhood association’s votes are taken very seriously, especially by elected officials. One cannot simply replace a two story single family home or triple decker with a seven story apartment building.
So there is a lot of land capable of being redeveloped, demand for redevelopment, but no way to get approval. It sugests that the whole process needs to be reimagined.