The Dorchester Reporter reports on some modest decreases in rents in older units as people leave them for fancier apartments.
Across Boston, existing property rental costs dropped by 4 percent during that period [2015-2016], with the median older stock rental price in Dorchester dropping by 5 percent.
We all know, based on screechy comments at public meetings and on Universal Hub, that the housing market is completely immune to the laws of supply and demand. But this would suggest otherwise, so it can't be true!
To the contrary, there's plenty of people her who assume that the demand is only local or something some clearly defined and unchanging number, when in reality anything you build is going only to provide a temporary slowdown in prices, so over the long term you have to find solutions that don't involved just increasing the supply.
To add on, to the comment just posted, it's more that people who assume supply and demand works are misunderstanding the demand part of equation.
I'd been led to believe that construction of new high-end apartments causes all rents to rise.
In my immediate neighborhood (Savin Hill), there's been a lot of building renovations lately, and they all sold as condos after completion. Any of them that may have rentals before are no longer rentals, removing them from consideration in this metric.
There's a key word there.
Renovations flips don't happen, especially in rental units, unless there's a reason to (constrained supply and high prices).
Easing housing demand lessens people renovating and flipping. It's harder to sell a renovated place built in 1890 than the news place across the street priced similarly.
Its not hard to sell anything to greedy speculators who gouge Bostonians.
It does in some cases by making an area more suitable to higher end construction. There are also people who then move in and buy older buildings and increase the rent.
But they usually package these as one or two months rent free, so the advertised rates stay the same.
Housing development in LMA/Fenway has held rents constant. In real (inflation adjusted) dollars, that's falling rent. After all, the costs to the landlord go up every year (property tax, maintenance). If rent doesn't, that's cutting into the owner's pockets, which only happens if the market prevents raising the rent.
Luxury units in a low income area will , over time, increase the price of real estate around the luxury units in relation to what the price was before. The overall increased supply will reduce rents across the board on average though.
This could explain why some people get confused. Both sides use a different part of the equation to sell their position.
That's an argument on making neighborhoods less desirable to live in, which seems paradoxical to me. Holding back the ocean is a lost cause, and so is making a neighborhood desirable enough that you want/can live there, but others won't.
Here's an article about how cities, including Boston, are struggling with whether to raze all their empty, decaying triple-deckers, or try to preserve them:
It's from 2009.
as people priced out of Somerville and JP look for cheaper rents, they will move to the hellholes of DOT, then as the neighborhood becomes cooler with hipsters, lesbians, and blue collar gutter punks filling its streets, well off people will feel "safer" there and start to move in, but they will want nicer places, and so the wave of gentrification will smash upon the rocky shores of Dorchester and Mattapan.
Lucy's will be packed with idiots, more than it already is!
BRING. IT. ON.
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