Fix it First (Part 2): It’s a Developer Crisis

In Part 1 we learned:

  • Healthy and successful cities depend on abundant supports: infrastructure, transportation, and a strong commercial base. Newton is lacking in all three.
  • Key advice set out 10 years ago in the Comprehensive Plan to Fix it First has not been followed.
  • The Mayor’s housing plan will result conservatively in 4,000 to 10,000 more people moving in. Those people will be bringing cars and will need schools for their children – schools that are not being built.

I heard an author on NPR discuss his recent book about elements which produced the Spanish-American War. In his interview, he stated “Americans are very compassionate people. We hate the idea that people are suffering anywhere. Our leaders know this, as do our newspaper editors. And whenever we want to push a project for intervention somewhere else, the first step is to point out how people are suffering there. We still use that today – a picture of a girl who has acid thrown in her face trying to go to school in Afghanistan makes people say we should go bomb Afghanistan, we should get rid of those horrible people.”

In Newton, repeated reference to “people suffering” and “the great need to help” is key to the Mayor and his allies pushing affordable housing agendas which actually do very little to alleviate suffering, but quite effectively make huge amounts of money for a select few.

The point is we are being played. All this push for “affordable housing and/or workforce housing” is a sham. Let’s dig down and prove it.

1) Do we need more housing in Newton to answer a “crisis”?

According to the US Census, only 9 states are growing more slowly than Massachusetts. Furthermore, Newton is growing at 0.23% per year – even slower than the state average. Our city’s population is 87,000 thus 0.23% amounts to 200 people. Our average household has 2.5 people so those 200 people need about 80 “housing units” Given the existing housing stock and rentals available, there simply is no need or justification for additional housing. Unlike the Metropolitan Area Planning Council (MAPC), the US Census Bureau is not a smart growth consulting agency that profits from predicting inflated figures. Unlike the Sunbelt and the West Coast, Massachusetts has for decades had a relatively stable population, and as long as the Northeast continues to have cold, snowy winters, it seems unlikely that the state or the region will experience the kind of rapid population growth that has become the norm in warmer areas of the country. It is, of course, the task of the MAPC to anticipate and plan for growth, so we should probably not be surprised that the council foresees a burgeoning population desperate for inexpensive housing.

2) Do we need more affordable housing?

Who would say no? But the question is misleading because the term “affordable housing” can mean many things including:

  1. Naturally affordable houses:homes on the lower end of the Newton price spectrum. We have those now but they are prime targets of developers and being torn down at a rate of about 100 per year.
  2. Low-density subsidized housing: which fits into the neighborhood in scale and appearance. Can-Do, a non-profit housing development organization in Newton, has a track record of building 100% affordable units by repurposing existing homes with little or no adverse impact on the surrounding neighborhood.
  3. Large-scale high-density 40B or inclusionary zoning housing developments: which impose unsustainable, costly impacts on schools, traffic, parking, infrastructure and municipal finances.

The first two applications of the definition create affordable housing effectively – the third does not, and it has been hiding behind the success of the first two. The first two also don’t make much money for developers. There are many reasons why high density apartment buildings don’t solve the affordability issue but one standout is this: new market rate apartments have a history of failing to drive down housing and rental prices. It’s the 80% of spanking brand new market rate luxury apartments that sabotage the altruistic goal but completely succeed in the developer’s financial goal. This developer’s boon sets in motion a cascading effect which starts with displacing local businesses, and ends with fixed income, seniors, and middle class citizens finding their current living situations unaffordable. Land values rise as the new wealth moves in. This problem has escalated so quickly that most of us could not afford to buy our current homes at market rate. This escalated disparity has led to cities across the country becoming “luxury products”.  Former New York Mayor Bloomberg is on record stating that today a successful city must be primarily a “luxury product” – a place that focuses on the very wealthy whose surplus can underwrite the rest of the population. Newton developer Korff even proposed a second tier of subsidized housing for middle class tenants. If you don’t like where this is going: taking the middle class – who want to live in houses they buy and own – and turning them into a landless class of renters who must be subsidized, you are not alone. Developers are not interested in fixing that problem.

3) Will the Mayor’s plan to build 800 subsidized units create affordable housing?

Even the Mayor’s consultants had to admit in their final report: The City can not “build its way to affordability.” The imbalance of demand and supply is so great that the City could not physically accommodate the development needed to affect pricing in a substantial manner. At a meeting with the consultants, they congratulated Newton on becoming a city whose reputation for great schools and desirable village attributes made it impossible for housing rates to ever outpace land value. Now you know why developers are now eyeballing $1M+ homes as tear downs, but as a source of substantial and ongoing profits, nothing beats those large-scale 300-to-400 unit projects, or the whopping 950 units proposed by Northland at the southern end of Needham Street.

4) What if we let developers have their way?

Charlottesville, VA is often cited as a prime example of  “smart growth,” the epitome of the kind of modern urban planning that enables a city to build its way to affordability. I’ve been visiting Charlottesville for over two decades, and indeed it is a prime example of transformation, though in many ways not for the better. In 20-some years, it has gone from a beautiful colonial college town replete with single family colonial styled homes and a historic university designed by Thomas Jefferson, into an overbuilt, unbridled disaster, teeming with large boxy apartment buildings, half-empty strip malls, and constant road construction, including 12-lane roadways crossing a town that is not on any major trucking routes and with only half the population of Newton. This is what happens to a city that doesn’t take command of its future and allows developers to do as they please. However with all this apartment construction and everything else, there is some evidence that the city has, in fact, succeeded in “building its way to affordability. The market-rate rents for apartments seem to have risen very slowly: my mother’s condo increased in value from 220K to 260K over 20 years. Even if that sounds good to you, one show-stopping difference between Charlottesville and Newton is the availability of land whereas Newton is almost entirely built-out. .

5) Is Newton building its “fair share” of subsidized housing?

Newton has been leading the Commonwealth in inclusionary housing and has a long and proud tradition of creating subsidized housing and group homes. The Subsidized Housing Inventory (SHI) recently stood at 2,441 units and 152 group homes. It follows that Newton was able to declare that it has surpassed the 1.5% quota established by 40B and thus take back control rather than allow developers to bypass our local zoning laws and build whatever is most profitable. The city declared we have reached the 1.5 (even without the golf courses) and a developer will have to challenge that in a real court of law – most likely the attorneys know better than anyone where the city stands so it follows that nobody is challenging. Again, with 40B, 80% market rate units are used to subsidize the 20% “affordable” and overrides local zoning laws so a developer can pack in as many units as possible. It’s a developer’s goldmine, and closing the gates on 40B is not popular in the development community, so here are their retaliation strategies:

  • Remove Ward Councilors who answer locally to villages and have consistently fought against large-scale, high-density projects in their Wards
  • Put in a Mayor who is favorable to the development community
  • Change zoning to favor more “multi”-use and high-density projects such as MU4
  • Move special permitting out of the hands of elected officials
  • Oppose Historic Districts that preserve existing homes and slow the spate of teardowns
  • Continue to take over local organizations including Area Councils and spread the “messages” of the development community

So now we know:  “we need more affordable housing,” “we have a severe housing crisis,” “we are not doing our fair share,” and similar phrases are marketing messages from the development community. They’ve been doing this for a long time and they know what works. Any citizens who walks into a meeting with a developer and his or her attorneys are at a distinct disadvantage—the equivalent of bringing a banana to a gunfight.

So what are we doing about it?

A quick answer is: almost nothing. Most of us would rather go about our lives and not get involved with all this local stuff, so we don’t really know what is going on. As long as we don’t dig too deep, all the marketing messages from developers and their emissaries, and from “affordable housing” evangelists, have a clear path.  If we continue to do nothing, Newton will become more unaffordable, traffic will get worse, major failures in the infrastructure will become more frequent, citizens who have been here for decades will find it impossible to stay, schools will become more overcrowded, the tree canopy will continue to disappear, pollution will increase, and citizens’ ability to control the future will lessen. The most important actions residents can take are:

  1. Don’t fall for the marketing and get the facts. Even long-standing organizations you may have relied upon for guidance must be questioned.
  2. Choose a mayor and city councilors who understand what Newton really needs and have demonstrated they are not under the control of big money and the development community.
  3. Oppose the Charter Commission whose main goal is to cut the city council by half and remove ward representatives.

If you want to learn more about 40B, here is a video.

If you want to see how Newton can look like in 10 years, here is a video.

In Part 3 we’ll examine the simple math which shows that adding people costs the city money it doesn’t have, and which individuals and organizations are playing for the other team.

 

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2 Comments on "Fix it First (Part 2): It’s a Developer Crisis"

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Ian Lamont

Agree with many of the points in the essay, but the headline makes it sound like there isn’t a problem … and there most definitely is.

Maybe a better headline in light of the points brought up in the essay: Developers spread fear, uncertainty and doubt (FUD) with self-serving claims of “housing crisis.”

I would also add that the goal of developers is not just to build big projects. Smaller developers and flippers want profitable projects they can afford to build out, which is why nearly all teardowns of naturally affordable stock turn into McMansions and “market rate” (read: high-end or luxury) condos. Developers of all sizes will only make noises about affordable housing when they have to suck up to citizens and councillors.

Susan Huffman

Chris, this is a brilliant column. I believe you are spot on with all of your comments.

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