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Mayor Walsh and Boston Real Estate

Boston DevelopmentBoston rang in a new era on Monday. For the first time in two decades, a new face graced the Mayor’s office. Mayor Martin J. Walsh started with a bang, announcing a changing of the guard in multiple city offices – including the Boston Redevelopment Authority. In a surprise announcement on Wednesday afternoon, Mayor Walsh appointed former state representative Brian P. Golden as interim head of the BRA. As such, Golden will be authorized to sign all documents requiring execution.

One of Mayor Walsh’s original campaign promises was to “restructure” the Boston Redevelopment Authority, though he back-tracked in mid-December on his most drastic ideas of dismantling the BRA and replacing it with a completely new agency more responsive to neighborhood concerns. “I wouldn’t expect any major change until the second half of my first year in City Hall,” Walsh said, in an attempt to reassure Boston developers at an event in the Boston Harbor Hotel.

So what will Mayor Walsh’s planned changes mean for Boston real estate? Well, the way I see it, putting more weight on the “neighborhood voice” in Boston development decisions quite frankly terrifies developers. In their minds it means miles of more red tape, increased costs and dozens more meetings to get approvals. Small and mid-size developers may be less likely to take risks on expensive renovation projects (South End condo-conversions and Beacon Hill rehabs), and certainly undeveloped land (new 10-40 unit condo buildings in South Boston). If they do move forward and development is stalled or costly because of the city, those costs will be reflected in the list prices. In addition, Mayor Walsh is seen as a friend of the unions. Union construction costs more for developers – again, a cost that will be passed onto the end buyer.

That said, if list and sale prices increase for new developments and building rehabs, that will have a ripple effect for other Boston homes. List prices will increase across the board based off new comparables and possibly continued low inventory (depending on how smoothly the BRA functions). This scenario would be good for Boston sellers, expensive for buyers.

On the other hand, if the BRA becomes more transparent, as Mayor Walsh promises, this may mean a smoother and clearer process for developers. This would lead to more confidence and eventually, increased inventory. Good for Boston buyers, not great for sellers. However, a powerful “neighborhood voice” channeled in the right direction can increase green space, parks and playgrounds. Residents can demand neighborhood improvements and beautification projects. Some of the biggest issues such as traffic, parking and building shadow concerns have an important place in city planning and it’s important that the people who care about their neighborhood have a say. In the long run these changes and amenities benefit both buyers and sellers.

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