Tuesday, November 24, 2009

Housing Rebound Less Dramatic in Boston

Boston shows only a mild case of the pick-up in housing and condo sales reported for Massachusetts by The Warren Group.

Single-family home sales in Massachusetts increased last month over October of 2008 by 17.2%, with the median price falling by 2.8 percent. For condos, the sales were up by 12%, with prices down by 8.1 percent.

In Boston, home sales for October were up by 7.41%, with a slight increase in the average price, at 1.91 percent. Among areas with more than five transactions this year, the largest increases in the number of sales were in Jamaica Plain, Mattapan, Roslindale and Hyde Park. Percentagewise, sales prices were up by double digits in Hyde Park and Mattapan, though none of these neighborhoods had more than 12 sales. The prices were also up for single-family homes in Dorchester, by 36.90%, though the number of sales was down this year by 44.44%, from 18 to 10.

For condos in Massachusetts, The Warren Group reports sales were up by 12%, while the median price was down by 8.1 percent. In Boston, the fall-off in price was almost as high, at 7.39%, but condo sales increased by less than one percent.

In neighborhoods with at least five transactions, the largest jumps in the number of sales were in Hyde Park, East Boston and West Roxbury, followed by Jamaica Plain and Brighton. The largest decreases in price were in Allston (54.64%), West Roxbury (27.06%) and downtown Boston (26.60%). One of the few areas with a substantial gain in median price was Roxbury and the South End, at 31.29 percent.

Like other observers, The Warren Group’s CEO, Timothy M. Warren Jr., attributes some of the increase in sales to the temporary tax credit for first-time homebuyers. He also calls the increase in condo sales a “significant reversal” after double-digit declines earlier this year. If the October figure for Boston is well short of a reversal, it’s still quite different from earlier this year, when monthly condo sales were down by more than 20 percent.

Friday, November 20, 2009

City Tax Outlook: Values Down, Rate Going Up

Property valuations in Boston are going down, so the tax rate has to increase. That was the message sent out this week to property owners by the Boston Assessing Department.

If the preliminary assessments are approved by the state, they would take effect in January of next year, but they reflect the values of January 1, 2009. Almost a year ago, the new tax bills reflected the values of January 2008, when a housing slump was still offset by a more prolonged increase in values for commercial property. This time around, there's a downturn for both types of property, and it's expected a larger portion of the higher tax levy will fall on homeowners.

The president of the Boston Municipal Research Bureau, Samuel Tyler, expects “a little shift from business to residential.”

“For the average single-family home,” he said, “the tax bill might increase by $100, $125 or $150 a year.”

Boston Assessing Commissioner Ronald Rakow says it’s “still too early to tell” how the tax levy will be distributed. But the notices from the city say the levy will increase by the maximum allowed, 2½ percent.

As Rakow notes, values are generally down this time for commercial and residential property. Housing sales figures from the Warren Group have shown some parts of Boston with large decreases in value and others with little change. So, as the notices point out, “homeowners may see an increase in their tax bill despite the reduction in their assessments.”

Unlike some other communities, Boston has a tax break for residential property with owner-occupants. The city also has tax relief programs for the elderly and other owners, including some veterans, and people with disabilities.

Commercial assessments are determined more by a property’s income from rents, or the loss of income with vacancies. The CEO of the Greater Boston Real Estate Board, Gregory Vasil, says that’s why the best way to relieve the tax burden on homeowners is to create more jobs.

“Vacancies are a function of job creation,” said Vasil. “And, if nobody creates jobs, nobody comes into the buildings.”

Thursday, November 19, 2009

After the Gold Rush

After the gold rush in the housing market comes reality. When Hendry street looked the way it did in the the view above left, three-decker units--even outside the most desirable locations--were still selling for more than $300,000 apiece. Not that anyone believed that made sense. In the view at right, from November, 2009, things look much better, thanks to the market, plus the intervention of government programs and non-profit developers. One conclusion is that if housing is more affordable, and market values seem more reasonable, there will be buyers. The tricky part is to make sure as many buyers as possible will fix up and maintain all those three-decker units that turned into condos and--eventually--foreclosures. See article about the market and the intervention in the Dorchester Reporter.

Tuesday, November 10, 2009

Chuck Turner's Last Hurrah? Not So Fast

That last hurrah for Chuck Turner might have to wait.

Three days after the November 3 election, the Jamaica Plain Gazette reported that the District City Councilor from Roxbury as saying he would not run for another term. He also said he had encouraged the fifth-place runner-up for councilor at-large, Tito Jackson, to be his successor.

Gazette publisher Sandra Storey says she stands by the report. But Turner said in a phone interview this morning that he would like to run for one more term.

“I’m continuing to plan to run in 2011,” he said, “and not to run for the District 7 seat in 2013.”

In a statement he issued the day after election, Turner made no mention of retirement, though he did say he would focus on his legal defense against his federal indictment on corruption charges. Until the case is resolved, Turner would still be barred from serving as a committee chair for the City Council.

In his second challenge against Turner in two years, Carlos Henriquez received almost 40% of the vote, more than double his percentage in 2007.

When asked about the Gazette report and Turner’s support of Jackson for councilor in District 7, Henriquez said, “I think I would be a good person to sit in that seat as well. That’s why I’ve run for the seat twice.”

Henriquez said the story prompted a friendly talk between him and Jackson.

“Tito and I have hundreds of mutual friends,” said Henriquez, “and we want to make sure we are not dividing our neighborhoods.”

Henriquez says his immediate plan is to go back to his job as Teen Programming Director for the Castle Square Tenant Organization and continue as the president of the board for the Dudley Street Neighborhood Initiative. Jackson says he’s going back to his job in the Mass. Office of Business Development.

When asked about his support from Turner, Jackson said, “It’s a huge compliment coming from Councilor Turner, based on his work in the community.”

Jackson allowed for the possibility of a future campaign, though not necessarily for City Councilor in District 7.

“At this point,” he said, “I’d look toward serving the whole City of Boston in some capacity.”

Thursday, November 5, 2009

Boston Election 2009: Continuity and Change

MassVOTE confirms one measure of the interest in this year’s election in Boston: the highest turnout in a city election since 1993, when Thomas Menino won his first term as mayor.

With Sam Yoon as his unofficial running mate, Michael Flaherty had 42.4% of the vote, while Menino had 57.3%. Flaherty’s figure was slightly less than the share of the vote in the preliminary election for him and Yoon combined.

As it turned out, Flaherty won several of the precincts that were previously carried by Yoon. In most of these precincts during the preliminary election, Flaherty had even finished behind Menino. In the final election, Flaherty repeated his advantage over Menino in South Boston and Charlestown. Flaherty also carried Ward 5 (most of the Back Bay, along with parts of Beacon Hill and the South End), and he came very close to winning Jamaica Plain (parts of Wards 10, 11 and 19) with 48.9% of the vote, and Ward 22 (parts of Brighton and Allston), with 49.4 percent.

Menino carried the rest of the city, including East Boston, Dorchester, Roxbury, Roslindale, West Roxbury, Mattapan and Hyde Park, along with Chinatown and Bay Village.

Despite inroads in some parts of the city, Flaherty ran far behind in predominantly black precincts. In most of those precincts, he received less than one-third of the vote. In 10 of the 14 precincts in Ward 14 (Grove Hall, Franklin Field, Wellington Hill), his share was less than 25 percent.

The predominantly black precincts were also a larger share of the total vote this time around. Compared with 1993—when the total vote was larger—the number of people voting for mayor in Wards 8, 9, 12, 14 and 17 (plus the Ward 18 precincts in Mattapan) was higher, by 29.8 percent. In Flaherty’s strongest base of support, South Boston, the number of votes cast for mayor this year was down from the figure for 1993 by almost 21 percent.

The results for City Council increase the racial diversity among members at large, but the newest members—Felix G. Arroyo and Ayanna Pressley—also had a diversity of supporters. The newcomers finished behind incumbents John Connolly and Steve Murphy, but more than ten thousand votes ahead of the next highest candidate, Tito Jackson.

Along with being the top vote-getter for council at-large in Jamaica Plain, Arroyo finished in the top four positions in Roxbury, Hyde Park, Ward 20 (West Roxbury and part of Roslindale), Ward 5 (Back Bay and parts of Beacon Hill and the South End), East Boston, Allston-Brighton and most of Dorchester.

Ayanna Pressley did even better in Dorchester, also finishing among the top four positions in her home, Ward 16 (Fields Corner, Ashmont, Neponset). She also was among the top four in areas such as Roxbury, Mattapan, Hyde Park, Jamaica Plain, Ward 5 and Allston-Brighton. Though she ran fifth in Ward 20, that was still good enough to get her 3,856 votes.

In the voting for district seats on the council, Mike Ross was re-elected with 84.1% of the vote and Sal LaMattina with 76.6 percent. In Allston-Brighton’s District 9, Mark Ciommo won his second term with 64.1% of the vote, while Alex Selvig received 35.4 percent.

The closest race for a district seat was in Roxbury’s District 7. Despite the federal corruption indictment from last year, incumbent Chuck Turner received 59.8% of the vote—still significantly lower than his finish two years ago with 81.2 percent. His only opposition this year consisted of two perennial candidates and Carlos Henriquez, who ran against Turner two years ago and received 18% of the vote. As the finalist this year, Henriquez got 39.5 percent.

In a statement after the election, Turner said, “I view this victory not only as a mandate to continue my leadership as Councilor but also to continue my fight to prove that former US Attorney Sullivan tried to publicly humiliate and jail me despite his knowledge that I am innocent.” Turner said, with the election over, he would focus on trying to have the federal charges dismissed. Until the case is resolved, he will still be unable to chair any committee of the City Council.

Also see election analysis in Neighborhood Network News interview with Boston Phoenix reporter David Bernstein and election night story by Joe Rowland.

Sunday, November 1, 2009

Menino Vs. Flaherty: Last Salvos, Loose Ends

If there’s one sign of change in Boston since 1993, it’s how candidates for mayor sidestep a question about the residency requirement for city workers.

Once a test of confidence in the city, the issue has been eclipsed by education, youth violence, and—despite the recent slump in real estate—the lack of affordable housing.

Sixteen years ago, Thomas Menino and co-finalist Jim Brett took positions favoring a stronger residency requirement, spurred by outcry from the pro-residency group Save Our City. In the aftermath of an economic downturn, and with residential property values still slipping, there was a resurgence of support for keeping city workers in Boston—and, by extension, the entire middle class. The earlier push for a residency requirement was in the 1970’s, after the start of desegregation in the Boston Public Schools, when there was another downturn coupled with declining property values.

When Menino and co-finalist Michael Flaherty were asked about residency in a forum last week at Faneuil Hall, they each expressed general support then switched the topic.

“But the core issue is why people leave Boston,” said Flaherty.

By the end of his answer time, Menino was fending off criticism that he should have more racial diversity among supervisors and top officials in city agencies.

“It’s not just having minorities in the administration,” he said. “It’s about doing things for the neighborhoods to improve the quality of life.”

On schools, both finalists have straddled the line between fact and overstatement. Flaherty says 38% of the Boston Public Schools are underperforming, and Menino says the figure overstates the number of schools with achievement lags across the board.

The mayor even points out that underperforming schools can also be found in wealthy suburbs—though he doesn’t say the ones in Boston are doing just as well. He says the dropout rate has been lower during his time as mayor than it had been for several years before. When reminded that the rate showed no steady improvement during his tenure, he replied, “Those are just numbers.”

One number that hasn’t been disputed by Flaherty is the mayor’s claim that applications to the Boston Public Schools have recently increased. This follows years of declining enrollment, attributed by officials to competition from charter schools, but also to a decline in school-age population.

One thing Menino has done in recent years, with encouragement from parents and officials such as City Councilor Maureen Feeney, is increase the number of K-8 schools. And, with the application process for next year getting under way, Superintendent Carol Johnson has added seats in Charlestown and the North End, while officials are looking for ways to increase capacity in areas with growing demand, such as West Roxbury, Roslindale, the Back bay and Beacon Hill.

Flaherty has drawn more attention to the waiting list for enrollment in charter schools. He wants to lift the cap that limits new charter schools in Boston—a change that would subtract money from the district schools, barring change in the funding formula. Menino favors “in-district” charter schools that would allow for more autonomy and innovation while still being under Boston control. Either approach would require approval of legislation at the State House.

“The last thing we need to do,” Flaherty said, “is to give the mayor control of more schools.”

Menino says some students, such as English language learners, are under-represented in conventional charter schools, while others who enroll fail to graduate without a detour to the Boston Public Schools.

“We don’t need more schools in Boston,” said Menino. “We need better schools.”

Menino’s push for “in-district charter schools” emerged in June. This followed years of struggles with the Boston Teachers Union to expand innovative “pilot schools.” The change also came after plans for more charter schools had been announced by Flaherty and fellow challenger (and later running mate) Sam Yoon. Adding to the incentive for new charter schools was the promise of federal stimulus money.

Both mayoral finalists say they want to save more money on student transportation. Menino and school officials have called for doing this in past years, only to retreat in the face of opposition. One argument from opponents is that a cutback on busing—and enrollment options—would leave some parts of Boston disproportionately zoned for underperforming schools.

“Until we get every school as a choice school,” said Menino, “we’re not going to get there.”

Flaherty called the spending on busing, with reportedly high numbers of empty seats, “a colossal waste of resources.” He also points out that the decrease in buses in Boston was much smaller than the decrease in student enrollment.

Menino has repeatedly said half the current busing is for students in special programs for learning disabilities, or for students in charter schools and Catholic schools. When officials were considering an end to busing for schools with citywide enrollment, they also met with opposition from champions of citywide enrollment for charter schools. If the supply of charter schools in Boston were allowed to expand, there could also be more demand for busing.

Another sign of change in Boston is that, despite the current housing slump, private owners of subsidized apartment complexes still want to convert them to market rental units. That’s currently the prospect at two “expiring use” developments in Hyde Park, Georgetowne Homes and Blake Estates.

Menino met with Georgetowne tenants last month and promised to support state legislation that would limit rent increases developments with expiring federal subsidy agreements. Supporters of the targeted rent control have been trying to get approval at the State House for several years, without success. While tenants put their hopes in more aggressive lobbying by Menino, owners of developments around the country are said to be more nervous about depending on federal subsidies in the future. Short of adding to units he was able to keep affordable for the long term, Menino said he would try to keep Georgetowne Homes affordable for current residents.

Flaherty has said he would support the legislation favored by the tenants. He wants more of the city’s new affordable housing to people with greater need—which could effectively mean a higher amount of subsidy per unit. He also called for doing more to prevent the eviction of tenants during foreclosures.

“We need to knock on the doors of these banks to help keep people in their homes,” Flaherty said in the forum at Faneuil Hall.

The very next day, Menino announced had done just that. Talks were in progress at four properties in Boston controlled by Bank of America to allow the tenants to stay. Under the plan, the properties would be acquired by the city and be turned over to private or non-profit developers.

Menino took credit for the plan being the first of its kind around the country, with potential for catching on with other lenders, but the idea had been proposed months earlier by the advocacy group City Life/Vida Urbana. What neither finalist has proven is whether a similar approach would work with financial stakeholders that have less visibility in Boston than Bank of America.

The forum also took place three days before reports that a graduate student at a Boston University BioSafety Level 2 laboratory had been infected with a bacterium that can cause meningitis. For opponents of the BioSafety Level 4 laboratory that BU is still trying to get approved, the infection was one more reason to say no. But officials say the infection was reported promptly and that the student is recovering.

At Faneuil Hall, the Level 4 lab brought out sharp differences between the candidates, with Flaherty having switched from being a supporter to an opponent. He was against having the lab in a densely populated area, near Boston Medical Center. Menino says there already is a Level 4 lab on a college campus in Georgia.

“We have the most stringent regulations,” Menino said.

“We don’t have a comprehensive evacuation plan,” said Flaherty.

Whoever wins on November 3 will have to reach new contract agreements with several unions representing city workers, at a time when the budget is expected to be even tighter.

Flaherty says by introducing performance reviews he can eliminate “a tremendous amount of wasteful spending.”

“I argue,” he said, “that we can save millions, if not tens of millions of dollars by bringing performance review to Boston.”

Hanging over both finalists are troubles with the Boston Firefighters Union, whose last contract expired in July, 2006. Since indications of possible substance abuse when two firefighters were killed in a fire in 2007, Menino has been trying to have the contract include random drug and alcohol testing. Despite recent management reforms, Menino’s tenure has seen equipment problems (above all, the fatal crash of a ladder truck) and alleged abuses of disability pensions—leading in October to federal indictments. But it’s Flaherty who has the union’s endorsement. Along with the benefit comes the burden, since the union has also been blamed for the pension abuse, rising overtime and resistance to changes in vehicle maintenance.

Flaherty has set a limit on how far he would go with a pay raise for firefighters, and he promises to go even farther than Menino with random testing. At last week’s forum, Menino still took issue with the union’s contract demands in connection with testing. “They want to get paid to take the test,” he said. “Is that fair?”

It can be argued it was fair enough for Boston’s largest police union. Menino introduced random testing on the Boston Police Department ten years ago, after fierce resistance from the Boston Police Patrolmen’s Association. The police contract also introduced new benefits—the education bonuses provided under the Quinn Bill, and paid for by the city and the state. With the state cutting back its share, leaders of the BPPA insist on keeping a benefit that was gained by bargaining. As BPPA Secretary Jay Broderick wrote three months ago in a union publication, any cutback by the state “will just force the individual municipality to provide the funding.”

Also see NNN report on debate by Joe Rowland.