Like a potter at the wheel, Mayor Thomas Menino’s guiding hand has been shaping the Boston skyline for past twenty years. And now that his tenure is drawing to a close, he’s decided on one final flourish, with the announcement a few weeks ago of a plan to build 30,000 new units of housing in the city before 2020.
A sixth of that tally – 5,000 units – is meant to be aimed at middle-income, middle-class homeowners. But a closer look at the land the city has available to fulfill its aims suggests that its goal may be extremely difficult to fulfill.
“In Boston and in other cities, everyone has realized that the middle class is getting squeezed out of many neighborhoods,” said Sheila Dillon, director of the city’s Department of Neighborhood Development. “It’s a very hard problem to fix, but we thought we should lay out some immediate and some proposals for the new administration on how we might build more housing help middle-class families buy homes.”
To counteract Boston’s high construction costs, the Housing Boston 2020 plan suggests the city sell off city-owned parcels at subsidized prices for private development. The plan calls on the city, along with the Boston Redevelopment Authority, to conduct an inventory of its own undeveloped parcels by the end of the year to help identify suitable lots for new developments aimed at moderate-income residents.
But a preliminary look at potential sites suggests significant obstacles to development. Of more than 200 million square feet of developable acreage currently available for private bidders by the Boston Redevelopment Authority, approximately 197 million square feet, or 96.7 percent, is zoned for industrial usage. Of the remaining 6 million square feet, just under 1 million is designated for residential development, with the rest occupied by parks, gardens, parking lots and stray “sliver” lots leftover from road-building and other projects.
The city-owned property is in similar shape. In March of this year, and independent of the Housing 2020 plan, the Department of Neighborhood Development launched a Middle Income Housing Initiative to identify city-owned parcels suitable for residential development, with a goal of designating 1 million square feet and having it pre-approved by local communities for development over the next two years.
Of more than 5.4 million square feet of city-owned land so far indexed by the project, just under 40,000 square feet is designated for residential development, while 2.7 million square feet have been identified as buildable lots. Of the latter, about 290,000 square feet have been advertised for sale while another 1.3 million square feet are awaiting community approval.
Most of those properties, Dillon says, are small parcels, many clustered together, allowing for the development of 4-8 homes.
“We’re selling at a price point that will allow [the development of] a middle-class home for a family of four,” she said. “We don’t have an abundance of small contractor-developers in the city, so we can’t overwhelm the market.”
Questions remain about whether the available land will prove tempting to developers. Many parcels have been acquired by the city from tax takings and may be located in neighborhoods hard hit by the foreclosures crisis, making developers reluctant to commit to building new homeownership units. Of the buildable lots currently identified by the Middle Income Housing Initiative, 87.4 percent are located in Dorchester, Mattapan and Roxbury.
The city is also looking to construct larger, denser developments around transit hubs, Dillon said, and is working to identify and consolidate parcels that may be owned by other city, state, and federal agencies, including the Public Works Department, Boston Public Schools, the MBTA and the U.S. Postal Service.
But some question whether attempting to build new middle-income units is feasible in Boston, even if the city subsidizes land costs.
“Having the land is wonderful….but the actual construction, materials and labor costs are also a huge consideration,” said Greg Vasil, CEO of the Greater Boston Real Estate Board. “Unless you’re able somehow to have some subsidy to get those material and labor costs at below-market value, it’s very difficult to construct housing that’s affordable for people.”
Barry Bluestone, director of the Dukakis Center for Urban and Regional Policy at Northeastern, agreed.
“We obviously can produce housing for wealthy people,” said Bluestone, who served on Menino’s “And we have some programs that enable us to create housing opportunities for people with lower incomes,” he said. “But for the 60 to 70 percent of the population that are working families, almost all the economics that I’ve ascertained tell me it’s almost impossible to build new housing for them.”
The city is aware of such concerns, said Dillon. “Developers are going to charge what they’re going to charge, and they’re going to be able to command the prices they can command. But one of the things we’re looking at is, what can we do to affect the costs? Are there things that the city requires that make it hard for the developers to respond to the middle class market?” she said. She said the city was tentatively considering creating an incentive for private landowners to allow more dense development, as well as looking at revamping its bidding process to allow for lower-cost construction techniques like design-build, as well as regulations governing unit size, parking allotments and other amenities.
“We have thought, long and hard, about what is it we can actually do to encourage, cajole, insist upon developers to build for the middle class,” she said.
