Jumping the gun on rent control in Boston | Sticker shock at the newsstand | Red flags on new development | Quick Hits | About Contrarian Boston |
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Evidence mounts of a slowdown in Greater Boston construction, development
Construction starts in the Boston area plunged 25 percent during the first half of 2022, a new report finds.
Overall, there was a $3.2 billion drop in construction of everything from lab and office projects to new condo and apartment buildings, according to the Dodge Construction Network.
The drop comes atop the news, which Contrarian Boston first reported here last week, of a 10 percent drop in the number of building permits issued across the Boston area for both new commercial and residential projects over the first five months of 2022. In contrast to construction starts, building permits offer a slightly more forward-looking view of the real estate market.
Surging construction prices and a dire shortage of key materials - and now rising interest rates and recession talk as well - have prompted some developers to delay or even stop some projects.
“The construction sector is at a crossroads,” said Richard Branch, chief economist for Dodge Construction Network, in a statement. “The Federal Reserve’s fight against inflation has taken a toll on the economy and raised concerns that a recession could occur.”
Speaking of a slowdown …
… developers pushing a 2.6-million-square-foot project in Sullivan Square have notified Boston officials they have cut a lab building from their plans, Steve Adams at Banker & Tradesman reports.
The move comes after a new report by Newmarket, a brokerage firm, that lab projects totaling tens of millions of square feet across the Boston area may face an uncertain future.
The combination of rising interest rates and surging construction costs are making it more difficult for developers to nail down financing for new projects, the report finds.
Boston Herald: Working-class tabloid goes uptown on newsstand price
By Mark Pickering
The Boston Herald was the king of single-copy newspaper sales well into the 21st century. The paper’s long-time emblem was a newsboy dressed in old-fashioned clothes hawking the latest edition.
Early on in this century, Herald copies sometimes sold for less than 50 cents at the end of the workday in Boston’s crowded South Station. The paper had an overall circulation in the hundreds of thousands.
Now, the paper has just raised its single-copy price to $4.50. Even The Boston Globe, the Herald’s longtime rival, sells for less on the newsstand ($3.50). The New England Edition of the New York Times goes for just $3.
The Herald’s price hike is part of a trend that has owners charging more and more for newsstand sales.
In 2018, a hedge fund, Alden Global Capital, bought the Herald, which had filed for bankruptcy. The paper now operates under the investment company’s MediaNews Group umbrella.
Alden dramatically slashed the Herald’s newsroom as it took over the paper. (In the interest of total transparency, that included me.)
“Let’s squeeze as much money out of this as we can,” said media commentator Dan Kennedy, of Alden’s philosophy when it comes to newspapers. “As revenues keep dropping, we’ll keep cutting,” the Northeastern University professor added of Alden’s approach.
The Alliance for Audited Media reported that, for the six-month period ending March 31, the Herald had a combined circulation of 51,613. The print edition had a circulation of 19,678, meaning the rest (31,935) were digital subscribers.
The total for Sunday was 53,946 – with 23,006 in the print edition.
When the pandemic hit, fears about COVID-19 skyrocketed ‑‑ and newsstand sales for the Globe and Herald plummeted. The hope that a vaccine would bring about a return to some kind of normalcy was still off in the distance.
In that atmosphere of fear, the Incredible Ever-Shrinking Herald laid off about half a dozen columnists and reporters in April 2020, according to The Boston Globe. That summer the Herald also raised its single-copy rates to $3.50.
The Herald’s website currently offers a range of options for sale, including $3.50 per week for an online subscription. A digital subscription with no ads goes for $4.50 per week.
A digital subscription that includes a 7-day-a-week print subscription goes for $15.75 per week.
Mark Pickering is a veteran of the local news business, having worked on the business desk and the opinion pages of the Boston Herald.
Far too early to call an end to the rent control debate
The Wu administration is busy holding “listening sessions” as it pushes forward with its campaign to bring back rent control.
But whether the mayoral-appointed Rent Stabilization Advisory Committee is truly hearing some of the blunt feedback it has been receiving is another question altogether.
In its online public comment sessions, the 23-member panel, made up mainly of housing advocates, labor leaders, professors, foundation honchos, and representatives from tenant groups, has made clear there’s one thing it doesn’t want to hear, namely a debate over whether rent control is a good idea.
Among the approved topics: Not whether, but rather “how” rent increases should be capped, how such a policy should be administered, and if landlords should be allowed to “bank” rent increases they forgo.
Given the high stakes involved and how heated the issue is, you can just imagine how successful the panel’s attempts to limit debate have been.
Sheila Grove, who owns six apartments in the South End and has been in the business for four decades, said she talks regularly with developers and keeps a close eye on the neighborhood’s rental market.
Grove offered some non-approved observations for the panel. “I reject your assumption that rent stabilization will create more affordable rents,” Grove said, according to notes kindly shared by a colleague at Banker & Tradesman. “If you increase the supply then [rents] level off.”
The debate over whether to cap rents in Boston is far from a settled issue, with the spirited discussions that have taken place during the panel’s so-called listening sessions Exhibit A.
Quick hits:
A badly needed boost for a key sector: “CHIPS Act passes House, secures $52B for semiconductor industry” Construction Dive
We definitely haven’t seen the end of this State House unionization battle, whatever the lawyers say: “Massachusetts Senate staffers may not unionize, Senate president says in memo” Boston Herald
Christmas in July, with Baker playing Santa: “In a surprise, Baker says taxpayers could receive ‘north of $2.5 billion’ in tax relief under little-known law” Boston Globe
The Biden comeback begins? Don’t laugh: “Biden is showing that governing from the middle is possible” Washington Post
Dempsey, DiZoglio tangle over transparency as state auditor’s race goes down to the wire: “Who knew campaign questionnaires were so controversial?” CommonWealth Magazine
What is Contrarian Boston?
I have fielded emails over the past couple of months asking what Contrarian Boston is about.
Here’s a link to our mission statement – you can find it in the “about” section.
For a more prosaic, nuts-and-bolts description, read on.
An online newsletter, Contrarian Boston publishes every Monday, Wednesday and Friday. In Contrarian Boston you’ll find analysis of the day’s news, and original reporting as well.
Our focus is:
· Politics and all levels of governance, good and bad, with an emphasis on state and local, with some national mixed in;
· Economic growth and business, especially real estate, housing and new development projects;
· The media and why it does what it does;
· Education, from school board spats to the doings of multibillion-dollar university endowments;
· And whatever else catches our fancy.