Opinion

lawrence harmon

The road to lower rents in Boston

The city is exploring options such as micro-units to solve its housing crisis.
Josh Reynolds for The Boston Globe/file
The city is exploring options such as micro-units to solve its housing crisis.

Any developer who hopes to build apartments priced for middle income families in Boston needs a keen eye for real estate, sharp negotiating skills, political savvy, good market conditions, and loads of luck. Everything must fall into place perfectly. That’s the lesson gleaned from The Commons at Forest Hills Station — a 283-unit apartment complex now under construction in Jamaica Plain.

The Walsh administration has called for the creation of 17,500 new units of middle income housing in Boston, and 53,000 units overall. Developers here tend to concentrate on either the luxury market or cobble together subsidies to build low-income housing as a way to counter Boston’s high land and labor costs. Middle class families with incomes in the $50,000-to-$125,000 range usually get overlooked in the process.

A local development team, Forest Hills Arborway LLC, offers a partial solution. It is building a $90 million apartment complex on a former industrial site along an underutilized stretch off Washington Street in Jamaica Plain. Two-bedroom apartments will rent for $2,650 per month. That price falls just within reach of middle class families earning $100,000. But it is too much of a stretch for those just a few rungs below.

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There is no wiggle room in this town. The ability to maintain the $2,650 price point required a near perfect rollout, according to co-developers Richard High and John Brennan. The land cost was modest given its former use as a fuel depot and uncertainty over the planned demolition of an elevated section of a nearby roadway. The permitting process required just six months, a wink of the eye in Boston. The unionized building trades — and the carpenters’ union in particular — showed a lot of flexibility during negotiations. And rather than toss up the usual obstacles, progressive neighbors in Jamaica Plain accepted The Commons as a good example of a dense, transit-oriented development just steps from a subway station and bike path leading downtown.

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Still, the overall picture is sobering. If the perfect development scenario yields apartments that rent for $2,650 per month, where do people at the lower end of the middle class spectrum fit in? High, who is the president of John M. Corcoran & Co. in Braintree, described a huge demand for apartments renting in the $1,500 range. But he doesn’t see how such modest rents could possibly support an adequate return on investment.

The next housing test comes on city-owned and underutilized industrial property along the Fairmount commuter rail line that runs through Dorchester, Mattapan, and Hyde Park. Experienced developers like Joseph Corcoran, president of Corcoran Jennison Associates, are eyeing and even bidding on such properties. Corcoran doesn’t see any way to build significant numbers of market rate, two-bedroom apartments that would rent for $1,500 monthly along the corridor, even if he could secure the city-owned parcels for free. He does, however, envision market rate, two-bedroom apartments renting in the $2,200-$2,400 range. Getting closer.

Even lower rents aren’t out of the question. The building unions are well aware of the volume of work — and goodwill — to be gained by entering into reasonably priced deals to build apartment houses in Boston’s outlying neighborhoods. And the Walsh administration hasn’t even played some of its cards. City officials, for example, are open to providing temporary relief from property taxes in special middle income development areas. That could shave a few hundreds dollars off a tenant’s rent. And there are signs that the city might make minor adjustments in a policy requiring developers to set aside 15 percent of their units for low-income tenants. Right now, those costs get passed on to market rate tenants.

There is, at least, a route to lower rents. First, tenants living in overpriced triple decker apartments would realize they can move to new buildings for the same price. Absentee landlords would respond by lowering rents in those vacated triple deckers. The Walsh administration, meanwhile, would convince universities to build 10,000 or more dorm beds over the next five or 10 years. Free-spending college students would no longer drive up prices, leaving middle income families and workers in a better position to find suitable housing.

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The two-bedroom, $1,500 apartment in Boston remains elusive. It is unlikely to come online in the form of new construction. But it might emerge as a byproduct of new construction. And for the first time in a long time, even discussing such a possibility doesn’t sound like a cruel joke.

Related:

Paul McMorrow: In a vacant lot, the story of Boston’s housing crunch

Opinion: Time to consider the middle ground of housing

Lawrence Harmon: Will Walsh fight hard for housing?

Editorial: Preserve busing-era landmark, and help housing shortage, too

Lawrence Harmon can be reached at harmon@globe.com.