Brookline Housing Busts.
By Jim Conley • April 17th, 2008 • Email This Post to a Friend •
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I’m often told that Brookline is impervious to housing market woes given its close proximity to the Longwood Medical Area and other “best-in-the-world” features.
Well, tell that to the owners of the $105 million Longwood Towers who were foreclosed on yesterday. Here’s a bit from the Globe story:
The Tudor-inspired complex had been purchased in 2005 for $105 million by the Radco Cos. of Atlanta and its investment partner Arcapita Inc., an investment bank with offices in Bahrain and Atlanta. The pair launched a $30 million renovation of the complex with plans to sell the 277 units as condos.
But the developers had poor timing. A real estate agent familiar with the renovation who did not want to be identified said the listings hit the market in early 2006, just as Boston’s housing market was heading into a steep decline, and condo sales were slow.
Now this is much more complex than the average foreclosure, but the point is that Brookline’s housing values can’t “hold” (as some suggest) when they’re tanking across the border. Markets are systems, and a disruption in one part of the system means disruption in another (for good or bad). And if a condo project only steps away from the LMA can’t make it…
The parallel, of course, is the St. Aidan’s housing project. Today, the Boston Archdiocese will begin demolishing one of Brookline’s oldest buildings (the church rectory) to prepare for a luxury condo/low income rental project. A project with financial assumptions predicated on the housing market of 2000-2001.
Busting down to make way for another bust.
Jim Conley is publisher of On Brookline.
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I switched to the Town’s cable channel at 8:00 PM on Tuesday, 4/15/08, to watch BU’s “Presentation” on the Comm. Ave./BU Bridge area but apparently Chair Daly was behind schedule. At the podium was the smooth operator spokesman for Children’s Hospital. It seems that Children’s proposed B-2 parcel development has created some parking issues, in that Children’s wants more on-site parking spaces than called for by the special zoning for that small block despite the fact that a D Line T stop is close by. It is well known that there is and have been serious traffic issues in that area. So locals seem to want less on-site parking. But Children’s smooth operator spokesman points out that patients coming to the site will to a great extent come by car rather than public transit and because of patients waiting protocols well known in the medical industry, this patient-queuing impacts parking. In fact, Children’s smooth operator spokesman points out that in the Longwood Medical Area cars keep circling aroung its blocks looking for a place to park, either on or off-street. So what does that say about “smart growth” that might not be that smart? So instead of cars circling in the LMA, they might be circling the Village area if Children’s proposed development does not have sufficient parking for patients who may be reluctant to use public transit. Was this parking issue considered by our activist locals in the Village and beyond who were cheerleaders for Children’s movement into the Village?
One of the major pluses for Longwood Towers’ condo conversion was its proximity to the LMA, where employees could walk a few blocks to work and enjoy the benefits offered by Brookline. But perhaps even the employees in LMA may prefer commuting by car rather than public transit. Do many of the MDs and other professionals in LMA take the T?
As for BU, that’s a non-profit like Children’s. The Village may now have a better idea what it’s getting from Children’s. BU is concerned with traffic issues in the Comm. Ave./BU Bridge area that it refers to as the “knuckle” which creates traffic problems for the Cottage Farm Neighborhood (where I reside) as well as for BU. Keep in mind that a “knuckle” is part of a fist that might not be so welcome, as our Selectmen may decide to establish a “Knucklehead Committee” to address this matter. Non-profits can cause losses to Brookline.
It’s like watching a train wreck in slow motion.
Brookline’s residential real estate is valued at $13 billion by the town’s appraisers. A 20% decline in property values, which is the combination of the past drops and expected future declines according to the CME Case/Shiller futures, would make Brookline’s real estate $2.6 billion more affordable. The market is doing a much better job at creating affordable housing opportunities than is the Planning Department or the Housing Advisory Board. I mean, compared to a $2.6 billion market-driven discount, the town’s $6 million affordable housing trust fund is measly.
One only has to take a look inside the units at Longwood Towers to see why they were doomed to failure….
Nobody who can afford to live in a million dollar luxury cubicle would willfully choose the intersection of Longwood and Riverway.
Greg, what’s your outlook for the St. Aidan’s condos? Will they sell for a million plus each? I’m not suggesting they won’t. I’m sincerely interested in an unbiased opinion.
Lux,
I don’t know the exact details on the unit mix, etc but I would say it is more than likely that they’ll get close to the numbers they were hoping to see. Most developers in Brookline today seem to be going for the 1500+ sq ft, 3+ bed condos that are almost completely missing from the marketplace. You’ll see two projects come on soon that give townhouse style new construction options in and around Coolidge Corner where they haven’t been before. It’s the 1-2 bed condos that are still too easy to come by that will have trouble selling and Longwood Towers and the new St. Paul Arms offered “new” where the market didn’t really require it.