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The boom is off the rose: Permitting for new housing construction slow in Boston

The Globe reports: "Building permits for new housing in Boston fell by nearly one-quarter in 2019, city data show."

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God

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Boomer

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Please stop with the boomer name calling. It's not amusing . It's ignorant. It's just as bigoted as racism, homophobia, islamophobia, etc.
There are boomers that support more or less development,and boomers that range from progressive socialists to right wing Trumpsters and everything in between.

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Wow, comparing this to racism is a giant stretch. As we all, like, choke to death on the smoke from forest fires or whatever, you might want to think on the fact that because it’s silly to hold individuals accountable for the collective sins of an entire generation, all we get is this rhetorical silencing phrase. Unfortunately it hasn’t proven effective for all the Baby-Boomer-age people who show up at “community meetings” to oppose the construction of more housing.

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Okay, Boomer.

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boomers are not structurally oppressed, don't compare foolish things like that. dumb dumb

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Reacting aggressively only shows that you feel guilty about it.

Equating this term to real oppression is pathetic.

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And when that day comes, there is going to be a psychological bill due on "OK Boomer". And the sum on that bill is going to be massive.

P.S.: no need to be cute and repeat the insult, because I'm not a boomer.

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If you care about things like "being able to find an apartment" and "affordable housing." Permits may be slowing down, but vacancy rates (especially in older units) are still at record lows and rents are still crazy high, which means rents are likely to spike even higher in 18-24 months when these units that are not getting built would normally be coming on the market.

It's not instilling nearly the level of panic that it should be that even with home prices over $500/sqft across most of the city and vacancy rates below 5%, building costs are so high that building is impossible. The short answer is that there are just too few places in the city where someone can build an apartment building without having to have an epic, years-long fight with the neighbors just to build 10 new units.

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I'm not sure that that development was helping the average person get an apartment, though. My guess would be that the lower vacancy rates in older buildings have everything to do with new construction being unaffordable luxury housing. Who is helped by more of that?

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It's all related. If richer people can't find units in new buildings, they don't just leave town, they bid up the price of older, more affordable buildings that, often times, already have people (often families) living in them.

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1. There's simply not that many rich people, no in comparison to poorer people. Its never like hat in any society. Thats why theyre called"rich" and not regular.

2. 25% of bostonians spend half their income on rent

3. Rich folks often do have multiple job offers in various cities they can pic from. They will choose other places like Austin Seattle NYC Atlanta etc if they have to.

4. Development brings with it all types of streetscape improvement which while nice aren't necessary but they attract more attention to a neighborhood, and more developer thus driving up property values and rents in the surrounding area.

5. We've seen it time and time again. The luxury market is very soft relative to the affordable housing/workforce housing Luxury building take a few months fill up whereas affordable housing waitlists are full nearly as soon a the development is BPDA approved. This is why older units have a lower vacancy rate.

The suburbs basically need to allow more to be built because its now impossible to build the housing that's in demand in Boston.

Population growth has slowed tremendously in the past 2/3 years in MA and Boston because its sort of at a peak. The entire state gained only 9.8k people last year, down from 50-60k per year from 2011-2016. I think I read Boston gained about 2-2.5kpeople.

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1. There's simply not that many rich people, no in comparison to poorer people. Its never like hat in any society. Thats why theyre called"rich" and not regular.

These aren't necessarily "rich" people we're talking about here, just people who can afford more expensive housing than those who are being pushed out. And these people don't occupy all of these units indefinitely, they buy them when they're brand new, hold them for a few years, and then resell them after they've become a little more "worn out" and are consequently a bit more affordable to the average person (obviously assuming we've built enough that they have new places to move into).

3. Rich folks often do have multiple job offers in various cities they can pic from. They will choose other places like Austin Seattle NYC Atlanta etc if they have to.

Sure, but why would they? They're not the ones having trouble finding housing. It's just that if we don't build, their efforts inevitably and inadvertently hurt others.

4. Development brings with it all types of streetscape improvement which while nice aren't necessary but they attract more attention to a neighborhood, and more developer thus driving up property values and rents in the surrounding area.

This drives up LAND values and makes AREAS more valuable. If we allow the market to respond to this by adding housing in these areas proportional to demand, it more than offsets this effect while creating jobs, reducing crime, and making the whole city generally more vibrant.

5. We've seen it time and time again. The luxury market is very soft relative to the affordable housing/workforce housing Luxury building take a few months fill up whereas affordable housing waitlists are full nearly as soon a the development is BPDA approved. This is why older units have a lower vacancy rate.

Put a different way: We have squeezed so much of the profit out of these projects that only the very cream of the crop (in terms of profitability) can survive. The answer to this is NOT to just push all development out to the far flung suburbs (where everyone has to drive everywhere), it's to make it easier to build in the city by doing things like NOT requiring a years-long community approval process every time someone wants to build a 9 unit building without parking in Southie. It's "impossible" to build housing in Boston because we've made it impossible, and this is absolutely something we can fix.

Population growth has slowed tremendously in the past 2/3 years in MA and Boston because its sort of at a peak. The entire state gained only 9.8k people last year, down from 50-60k per year from 2011-2016. I think I read Boston gained about 2-2.5kpeople.

No, it has slowed because there is literally nowhere for people to live. The population can only grow as fast as the housing.

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We do need more studios or efficiencies. Building "luxury" condos doesn't keep entry level workers from pushing families out of affordable neighborhoods. The problem is really all the cars. This isn't the peak of Boston population, We could have room for more people if we had less cars.

I also wonder if some older office space could be remade into living space. Older offices would need to be really gutted to be attractive to most modern businesses. I am sure that these buildings are more busy than I realize but I wonder if they would make good studios.

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Building "luxury" condos doesn't keep entry level workers from pushing families out of affordable neighborhoods.

I think this is really where things like SROs come in. Although I'm assuming that's similar to what you had in mind with efficiencies. Basically we need a few ultra-low-cost, ultra-basic options for entry-level workers. And it shouldn't be hard to provide since those people have very low demand in terms of amenities and almost no stuff to store. It's just a matter of legalizing it. And of course (as you said) the whole model doesn't work if you're required to build a parking space that uses up the same amount of space (or more!) as the whole apartment.

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Rooming houses have a negative reputation, but it used to be where most single people lived. A SRO's that felt safe and close to transit would be a good option for a lot of single people.

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Foolish and faulty statement about needing more units to bring the cost of housing down. With the thousands of units created over the years, the cost of housing has only gone up. Maybe instead of paying 1.75 million for a condo the costs have been held to 1.5 million.
And building housing near MBTA stations has not stopped car owners from moving into them.
Keep telling yourself this, because you don’t have to tell those who know the truth.

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There is an economic concept of supply vs demand that has held true over decades, if you have more supply than there is demand for the price will most certainly go down, unless there is an outside interference that provides a counterbalancing subsidy. This is true for more than just housing. The difficulty for many is this typically doesn’t happen overnight, especially as it relates to housing since the sales and development cycle is longer compared to consumer goods (i.e. clothing, electronics, etc..). This is compounded here in Boston because we are in an historic economic growth period, where more people are moving into the area (or staying after graduation) than ever before thus generating even more demand. If we stop building there will be two likely outcomes (1) housing prices will continue to rise in the near term and (2) companies will start leaving Boston bc there is not enough talent (due to lack of housing and continued increased cost of living). You don’t have to take my word for it, just look at CA and the number of companies who have moved to TX. That being said in the end of this scenario you will eventually see prices go down as all the demand moves out of Boston but it will likely put Boston into a big recession if not a depression. It is hard to overly manipulate the market forces of supply and demand without some unintended collateral damage, government has been trying for centuries without meaningful success.

The best answer we can hope is to smartly manage development - focus on densifying areas near transit, appropriately reward good mixed income developments, ensure right level of walkable retail and education to keep congestion down and work to find ways to keep construction prices in check so it is easier to build lower cost housing from the start.

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Supply & demand. Boston's population keeps growing. Not enough supply to meet demand = prices keep going up. Unless the population shrinks or production of supply catches up housing isn't going to get cheaper.

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Prices in the metro area have been flat or around inflation for the past year. It's unlikely prices are actually going to drop but the days of 10% yearly jumps have been over for a while now.

Arguable if it's the "right" time to buy but if you're holding out for a 2008 style crash there's no sign it's coming.

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Meanwhile 2 huge projects with hundreds of proposed apartments in South Boston and Dorchester appear to be going nowhere, other than demolishing the existing buildings and creating holes in the ground.

Other that the projections of construction starting on whatever bogus dates that keep changing on the BPDA , Bldup, and other similar sites, does anyone know what is really going on with these 2 projects?

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From someone in their shoes trying to build in a different Boston neighborhood, they are probably relooking at their numbers, reconfiguring unit sizes (making smaller), finding better efficiencies in the building both in layout and structure, interviewing and re-interviewing construction management teams and asking them to sharpen their pencils more (costs are definitely the highest ever), reconsidering program of the current development (hmmmm, will it pencil out if I go condos, should I say screw it with housing and put up a commercial building??). Variance approvals expire in 2 years, so they have some time to ride this out and reanalyze their approved project, or perhaps they're shopping the projects around to other developers. The possibilities are endless.

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Yep. This. And rumor has it that construction prices have increased by roughly 50% in that time, so you can bet there are some projects that seemed easy-peasy back then that are now trying to figure out how they're going to even break ground. Just another one of those ways that holding up the permitting process tends to make everything more expensive.

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Here's the key number:

“The city is very interested in maintaining a healthy pipeline of residential construction,” said its housing chief, Sheila Dillon, who noted that projects totaling about 6,500 units are being reviewed for building permits by the Inspectional Services Department, about twice the number permitted last year. Many of them could break ground in the coming months, Dillon said.

That means that we had a little over 1% growth last year and if even half these are permitted - that's another 1% growth. Historically 1% has been the "sustainable" number (granted that's not net, because we do lose units every year - some of which are being replaced by these new, bigger developments).

As long as we keep adding a bit over 1% - which Walsh is doing a good job of achieving - we should be in pretty good shape over the long term. Total US population growth is slowing from about 1% to about 0.5% and that should eventually have an impact on the local population as well. We'll catch up - although probably in the second half of the decade rather than the first unless there is a significant recession.

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People across the country are moving to cities in huge numbers - we should be looking at Metro Boston's population growth rate, which is waaaay higher than 1%. Less people living in Iowa doesn't make it any easier for someone to find a home in Dorchester.

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According to recent Census estimates the US as a whole grew at the slowest % rate in a Century approximately 0.5% -- of course that is on a base of over 300 M -- so 0.5% is still over 1.5 Million people net.

The Census also indicated that because of the population growth in the past 10 years that there would likely be some changes in the Congressional Apportionment.

No effect on Massachusetts which just grew fast enough not to lose any seats -- but way slower than the places gaining seats -- so the status quo will continue.

The big gainers were Texas and Florida continuing a trend of people moving South and to lower Tax States

Census population trend report for 2019
https://www.census.gov/newsroom/press-releases/2019/popest-nation.html

2019 U.S. Population Estimates Continue to Show the Nation’s Growth Is Slowing
DECEMBER 30, 2019
RELEASE NUMBER CB19-198

Natural Increase Drops Below 1 Million for the First Time in Decades Due to Fewer Births and More Deaths
Slower Growth for Nation's Population

DEC. 30, 2019 — According to the U.S. Census Bureau’s national and state population estimates released today, forty-two states and the District of Columbia had fewer births in 2019 than 2018, while eight states saw a birth increase. With fewer births in recent years and the number of deaths increasing, natural increase (or births minus deaths) has declined steadily over the past decade.

“While natural increase is the biggest contributor to the U.S. population increase, it has been slowing over the last five years,” said Dr. Sandra Johnson, a demographer/statistician in the Population Division of the Census Bureau. “Natural increase, or when the number of births is greater than the number of deaths, dropped below 1 million in 2019 for the first time in decades.”

The nation’s population was 328,239,523 in 2019, growing by 0.5% between 2018 and 2019, or 1,552,022 people. Annual growth peaked at 0.73% this decade in the period between 2014 and 2015. The growth between 2018 and 2019 is a continuation of a multiyear slowdown since that period.

The South, the largest of the four regions with a population of 125,580,448 in 2019, saw the largest numeric growth (1,011,015) and percentage growth (0.8%) between 2018 and 2019. This growth is driven mainly by natural increase (359,114) and net domestic migration (407,913), which is the movement of people from one area to another within the United States.
The Northeast region, the smallest of the four regions with a population of 55,982,803 in 2019, saw population decrease for the first time this decade, declining by 63,817 or -0.1%. This decline was due to net domestic migration (-294,331), which offset population gains from natural increase (97,152) and net international migration (134,145), or the difference between the number of people moving into the country and out of the country.

Forty states and the District of Columbia saw population increases between 2018 and 2019. Ten states lost population between 2018 and 2019, four of which had losses over 10,000 people. The 10 states that lost population were New York (-76,790; -0.4%), Illinois (-51,250; -0.4%), West Virginia (-12,144; -0.7%), Louisiana (-10,896; -0.2%), Connecticut (-6,233; -0.2%), Mississippi (-4,871; -0.2%), Hawaii (-4,721; -0.3%), New Jersey (-3,835; 0.0%), Alaska (-3,594; -0.5%), and Vermont (-369 ; -0.1%).

Here's a summary of 2019 with MA highlighted in Bold

Nationally, net international migration continues to decrease, falling to 595,348 between 2018 and 2019. Between 2010 and 2019, the year with the highest net international migration was 2016 at 1,046,709; however, since 2016, the net international migration has been gradually decreasing each year.

Between 2018 and 2019, natural increase was 956,674, reflecting 3,791,712 births and 2,835,038 deaths.

42 states and the District of Columbia had fewer births in 2019 than 2018. Eight states saw increases in births - Washington (612), Utah (293), Nevada (232), Arizona (175), Idaho (166), Montana (66), Vermont (44), and Colorado (30).

Twenty-four states and the District of Columbia saw increases in their number of deaths compared to the previous year. Four states had more deaths than births, also called natural decrease: West Virginia (-4,679), Maine (-2,262), New Hampshire (-121) and Vermont (-53).

Twenty-seven states and the District of Columbia lost population through net domestic migration between 2018 and 2019, six of which had losses over 25,000, and three of which experienced losses greater than 100,000. The top states with net domestic migration loss were California (-203,414), New York (-180,649), Illinois (-104,986), New Jersey (-48,946), Massachusetts (-30,274) and Louisiana (-26,045).

from another source here's the decade for Massachusetts
https://www.census.gov/data/datasets/time-series/demo/popest/2010s-state...

SUMLEV REGION DIVISION STATE NAME
40 1 1 25 Massachusetts
ESTIMATESBASE2010 POPESTIMATE2010 POPESTIMATE2011
6547785 6566307 6613583
POPESTIMATE2012 POPESTIMATE2013 POPESTIMATE2014
6663005 6713315 6762596
POPESTIMATE2015 POPESTIMATE2016 POPESTIMATE2017
6794228 6823608 6859789
POPESTIMATE2018 POPESTIMATE2019
6882635 6892503

NPOPCHG_2010 NPOPCHG_2011 NPOPCHG_2012 NPOPCHG_2013
18522 47276 49422 50310
NPOPCHG_2014 NPOPCHG_2015 NPOPCHG_2016 NPOPCHG_2017
49281 31632 29380 36181
NPOPCHG_2018 NPOPCHG_2019
22846 9868
PPOPCHG_2010 PPOPCHG_2011 PPOPCHG_2012 PPOPCHG_2013
0.282874285 0.719978521 0.747280256 0.755064719
PPOPCHG_2014 PPOPCHG_2015 PPOPCHG_2016 PPOPCHG_2017
0.734078469 0.467749367 0.432425877 0.530232686
PPOPCHG_2018 PPOPCHG_2019
0.333042314 0.143375321
NRANK_ESTBASE2010 NRANK_POPEST2010 NRANK_POPEST2011
14 14 14
NRANK_POPEST2012 NRANK_POPEST2013 NRANK_POPEST2014
14 14 14
NRANK_POPEST2015 NRANK_POPEST2016 NRANK_POPEST2017
15 15 15
NRANK_POPEST2018 NRANK_POPEST2019
15 15
NRANK_NPCHG2010 NRANK_NPCHG2011 NRANK_NPCHG2012
8 12 12
NRANK_NPCHG2013 NRANK_NPCHG2014 NRANK_NPCHG2015
11 11 15
NRANK_NPCHG2016 NRANK_NPCHG2017 NRANK_NPCHG2018
17 16 18
NRANK_NPCHG2019
24
NRANK_PPCHG2010 NRANK_PPCHG2011 NRANK_PPCHG2012
9 23 23
NRANK_PPCHG2013 NRANK_PPCHG2014 NRANK_PPCHG2015
22 20 27
NRANK_PPCHG2016 NRANK_PPCHG2017 NRANK_PPCHG2018
24 21 25
NRANK_PPCHG2019
35

I don't see any indication in these Census Estimates of a burgeoning population outgrowing what is available in Massachusetts as a whole 344k people were added to the 2010 population of 6547785 a % change of 5.26% the US as a whole grew by 6.32% in the same period

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Boston's population growth is a relatively new phenomenon within the past 10 years. And if by 1.3% instead of 1% is "way higher" - you'd be correct. there is also a more recent trend of millennials getting married late and finally buying the suburban home and moving out of the city as well.

Bottom line - according to the census - as of 2018 we had 267,000 homes so to grow at 1.3% of that would be about 3500 homes per year.

Again - we are building quite quickly. And the market will take care of this - if government would get out of the way. Restrictive zoning and affordable housing requirements are probably the biggest barriers to better equilibrium and pricing in the local housing market.

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Of course arguably a lot of those millennials might not be moving out of the city if it wasn't for home prices being so ridiculously high to begin with. I'm always wary of measuring demand by looking at population trends because of course the population can only rise as quickly as actual housing is being built. It gives you absolutely zero sense of latent demand.

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Although I think jobs may be more important. If you have a job and your employer wants you here, they will figure out how to pay you enough within reason to keep you here. So while there's definitely a push/pull on both housing and jobs, the market will sort this out long term.

Makes one wonder that if/when there is consolidation in all these large local start-ups like Wayfair and DraftKings (?), what does that do to the long term millennial (and younger) population prospects. Sounds like they are both growing like crazy - but still trying to figure out how to actually make money.

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So while there's definitely a push/pull on both housing and jobs, the market will sort this out long term.

Spoken like a true laissez-faire libertarian.

But that theoretical world doesn't exist. And we're better for it.

Because if you have a job...say, cleaning office buildings...you don't get paid 10s of thousands more for your work just because you're cleaning Amazon's latest office building with its six-figure income data scientists in it. And those people need homes too or there won't be anyone willing to clean your office. And that's part of the population growth. And when has an Amazon not opened new offices just because they couldn't find a cleaning company?

We're at such extremes between the haves and the have-nots, that laissez-faire is irrelevant and in many ways mockingly callous. You could laughably apply the "invisible hand of the market" when everyone was much closer together and subtle market shifts to adjust for demand or supply could shift each other without tipping over and spilling everyone out of the boat...but those days left us over the past 4 decades. Welcome to 2020, the Year of Hindsight. Continuing to use the tropes of 80's conservatism is going to wreck us all. Grow up.

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Your comment, not mine.

Minimum wage in MA is now $12.75 per hour. 2000 hours a year means you make almost $26k per year. Times at least two for most households puts you at $52k per year. If you can't scratch out a living even in MA at $52k per year per household, you have a problem. And that's if you have just a minimum wage. I have friends that own restaurants and they laugh when I ask them how many minimum wage workers they have - most are $1-$3 over that for fresh off the street.

Not saying you'll live in the lap of luxury- but you'll have food, shelter clothing and state paid or subsidized health care. So yes - the market will sort this out (in fact, I'd venture a guess that one of the reasons you can't find minimum wage workers is because many of the people that would only qualify for or work for that wage have already moved to some impoverished red state south and or west of here.

Or do you agree with Yogi Berra - nobody lives here any more because it's too crowded - and too expensive?

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State paid healthcare or the market will handle all this?

You're already contradicting.

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Frequently have said a) there is a (limited) role for govt and b) we need to help those that can't help themselves. Nobody is going to argue that somebody making $26k per year can pay $10k or more for their own health care. Govt needs to step in there.

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If you have a job and your employer wants you here, they will figure out how to pay you enough within reason to keep you here.

This is true for very high margin jobs, like neurosurgery and software engineering, but for a lot of jobs, the revenue generated per employee is not enough to cover the housing cost, so those jobs just go unfilled. Or the employee ends up commuting two hours to work every day from New Hampshire by car (global warming, anyone?).

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but BPS is a bigger issue

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Metro Boston ha been slowing its population growth for the past 3 years. Ma barely added people this year.

MA also lost 30k domestic residents. The fifth highest number in the country behind only the much larger states of CA NY NJ and IL. The state is just too expensive, thats all.

Takes a while for the narrative to change and reach the general public though.

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This is a chicken and egg problem. MA is expensive *because* we don't build enough housing, and we don't build enough housing because we have made building it too expensive.

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If construction were slowing that would be mean reduced economic activity and less construction jobs, so I don't really see why you're talking about millenials here when this is something that affects the entire city, and probably even the region.

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In response to the OKAY Boomer comment - but it's millennials that are driving the market - and soon the generation behind them. Give it another 5-10 years and there will be plenty of supply once the boomers start moving/dying en masse. The oldest boomers are about 73 now (maybe 74 this year?). We haven't hit the tipping point yet (except in ME, NH, VT and WV where more people are dying than being born), but that's coming soon and there will be major population shifts in the next 10 years.

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I don't know the hard numbers, but my observation is that there aren't very many boomers living in the city. When they die off, there's going to be a glut of large, suburban houses that few people want -- their kids will be trying to sell them to finally be able to afford to buy a place in the city, and they'll discover it isn't worth nearly what they think it is. I don't think this shift will have much of an impact on demand for urban housing. If you're the kind of person that wants to live in flyover country though, there will be great deals to be had.

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I’m a millennial with school age kids who bought as close in as I could afford. My age group peers at work - the ones who are starting to have kids and the ones with school age kids - mostly live in the city or close in suburbs and have no intention on moving further out. The ones that live further out are miserable and wished they lived closer. We’re actually seriously looking at condos in JP or Coolidge corner because maintaining a house is a huge pain. I have friends who also moved closer in once they started making more money and their kids got older.

One of my boomer in-laws bought a McMansion out near 495 before the recession. Their house is still worth less than what they paid. I’m not about to trade a 20 minute commute and my kids freedom of travel for “more space.” My kids will be mostly out of the house in 10 years anyway.

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The king of the I Got Mine So Fuck You and Hand Over Yours Club has spewed forth.

Much surprise at that.

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Boston doesn't need more housing. Its scale is fine the way it is. The problem is just too many people wanting to live in Boston. The city is under no moral obligation to house those people. There are plenty of other wonderful places they can live.

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Sure thing. So, are you going to stop complaining about the traffic generated from their commuting into the city? Or are you going to find a new place to live when you get flooded out due to traffic-related sea level rise?

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AmIRite???

The city is under no moral obligation to house those people.

Hahaha it literally is.

Also, why was it ok to build YOUR house and not houses for the people coming here today?

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Congrats to all the NIMBYs who got their Christmas wishes!

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1. There's simply not that many rich people, no in comparison to poorer people. Its never like hat in any society. Thats why theyre called"rich" and not regular.

2. 25% of bostonians spend half their income on rent

3. Rich folks often do have multiple job offers in various cities they can pic from. They will choose other places like Austin Seattle NYC Atlanta etc if they have to.

4. Development brings with it all types of streetscape improvement which while nice aren't necessary but they attract more attention to a neighborhood, and more developer thus driving up property values and rents in the surrounding area.

5. We've seen it time and time again. The luxury market is very soft relative to the affordable housing/workforce housing Luxury building take a few months fill up whereas affordable housing waitlists are full nearly as soon a the development is BPDA approved. This is why older units have a lower vacancy rate.

The suburbs basically need to allow more to be built because its now impossible to build the housing that's in demand in Boston.

Population growth has slowed tremendously in the past 2/3 years in MA and Boston because its sort of at a peak. The entire state gained only 9.8k people last year, down from 50-60k per year from 2011-2016. I think I read Boston gained about 2-2.5kpeople.

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How are we all going to get our magic falling-housing-prices unicorn now?

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