Tom O’Brien, one of the Boston-area’s leading developers, is raising the alarm about the region’s housing crisis.
“One of the most important statistics that I’ve focused on in the last six months is that over the last five years we’ve created 300,000 jobs inside Route 128,” he says. “During that same period of time, we only created 110,000 new units of housing.”
O’Brien said the imbalance between jobs and housing has been growing year after year for a long time. Now, he says, the situation is reaching dangerous levels.
“We’re building a building in downtown Boston right now and the cost of that is $675,000 per unit to build that tower,” he says of Bulfinch Crossing, the mixed-used project arising from the Government Center Garage. And O’Brien points out that the $675,000 price was locked in about two years ago, so the cost today would be even more.
“It’s a big issue for us in the city right now. I know that people are anxious because housing costs so much,” he said on the CommonWealth Codcast. ”If you’re a renter, you’re being asked to pay more and more of your income to pay rent. The problem right now is it’s very expensive to build these units. Right now, and this may be a little bit shocking to you guys, from our company’s perspective new high-rise rental housing in Boston does not pencil out. It does not underwrite because it’s so expensive. It’s really hard to see where the housing production process is going to go from here.”
O’Brien blames rising costs for land, labor, and materials, and the withdrawal of the federal government from the housing production market. He says the situation is so bad that some housing projects in the Boston area are being scrapped right now and being replaced with more office or lab space. But he says that scenario is counterproductive in the long run, since those office buildings will attract more workers who will move into the area and create more demand for housing.
“The broader public really needs to understand that we need to build more housing and we need to build it at all levels, a lot of it,” O’Brien says.
O’Brien’s HYM Investment Group is trying to produce more housing at Suffolk Downs, a 161-acre site that straddles East Boston and Revere and is bracketed by two Blue Line stations. HYM bought the property in May 2017 and plans to build 10,000 units of housing there (almost two-thirds apartments), plus 5.2 million square feet of office space, 900,000 square feet of retail and hotel space, and 40 acres, or a quarter of the site, of open space. He says some of the profit margin from the office space will be used to keep housing costs in the reasonable range.
HYM hopes to begin construction this year, near the Beachmont T Station, and complete the entire project over 15 to 20 years. O’Brien thinks the area will eventually break into three neighborhoods – Beachmont; Bell Isle Square, near the Suffolk Downs T station; and the rest of the property, which he is calling Suffolk Downs at least for now.
O’Brien says he has gone to great lengths to create a neighborhood that will fit into the surrounding community. He and his staff have sounded out the community in Spanish and English and promised local-area companies will fill at least 10 percent of the retail space. Unlike the Seaport District, where nearly all of the affordable units were built off-site, all of the affordable units at Suffolk Downs (the most created by any single Boston project) will be built on-site. Ten percent of all the housing would be set aside for the elderly.
“We really want this to be a community,” O’Brien said. “We’re starting from the get-go to take this in a different direction.”
O’Brien’s personal background is an interesting part of his story. He and his wife Patricia adopted five children from Colombia, Guatemala, Ecuador, and Ethiopia. His parents are retired and live on the Cape. And he has two brothers who have both been successful in their fields – older brother John, a former state senator from Andover who now works for Washington Gas in the District of Columbia, and younger brother Bill, the head coach of the Houston Texans.
BRUCE MOHL
BEACON HILL
A Globe editorial urges the Legislature to pass Gov. Charlie Baker’s proposed State Police reforms, including eliminating the requirement that its leader be chosen from among the State Police ranks.
As expected, the state’s new educational funding helps Gateway Cities, but every community, even the wealthy ones, receives some extra money. (CommonWealth) The lawsuit alleging unconstitutional disparities in state education funding is dropped. (State House News)
The state is starting the design work on new facilities to house women inmates from MCI-Framingham. (CommonWealth)
Former Fox News host Gretchen Carlson to speak out against nondisclosure agreements at the State House. (MassLive)
MUNICIPAL MATTERS
Pending complaints made to the Massachusetts Commission Against Discrimination are no longer public record. The idea is to make people more comfortable coming forward, but critics say it only protects those accused of wrongdoing. (Patriot Ledger)
The Diocese of Fall River announced the suspension of another retired priest, Rev. Herbert T. Nichols, for an allegation of sexual abuse of a minor, alleged to have occurred approximately 20 years ago. (Standard-Times)
A developer files a letter of intent to build two towers as high as 17 stories on the former Channel 56 site next to the former Boston Globe site on Morrissey Boulevard in Dorchester. (Dorchester Reporter)
WASHINGTON/NATIONAL/INTERNATIONAL
President Trump sought to tie security aid to Ukraine to the country’s willingness to help investigate Democratic rivals, including Joe Biden, according to a draft book manuscript by former national security adviser John Bolton that supports the main impeachment charge against Trump and is prompting renewed calls from Democrats for Republicans to allow Bolton to testify in the Senate impeachment trial. (New York Times)
John Altobelli, a former manager in the Cape Cod Baseball League, was killed along with his wife, Keri, and daughter, Alyssa, in the helicopter crash that also took the life of NBA star Kobe Bryant and Bryant’s daughter Gianna, among others, on Sunday in California. (Cape Cod Times)
NPR’s Mary Louise Kelly, who found herself on the receiving end of an f-bomb-laced attack from the US secretary of state following a recorded interview with him, never should have trusted Mike Pompeo in the first place, writes Eileen McNamara. (WBUR)
ELECTIONS
US Rep. Seth Moulton endorses Joe Biden for president.
Robert Boatright of Clark University says concerns about the timing of Massachusetts’s last-in-the-nation primary are overblown. Let it be, he says. (CommonWealth)
IMMIGRATION
Over a four-year period, four country jails received $160 million from Immigration and Customs Enforcement for locking up and transporting immigration detainees. (Boston Globe)
BUSINESS/ECONOMY
Worcester funeral director Peter Stefan gets his license back, but he will be on a tight leash for the next two years. (Telegram & Gazette)
There’s a death watch going on at the Silver City Galleria in Taunton. (Taunton Gazette)
EDUCATION
Northeastern University is announcing an advanced graduate study and research institute in Portland, Maine. (Portland Press-Herald)
TRANSPORTATION
Jim Aloisi, the former transportation secretary and TransitMatters board member, calls out the guardians of the status quo at the MBTA for slow-walking the Red-Blue connector. (CommonWealth)
Paola Massoli and Matt Casale say the T needs to move fast on introducing all-electric buses. (CommonWealth)
A dedicated bus lane might make sense in plans for a remake of Rutherford Avenue, but there currently is no bus route that follows its path from Everett to downtown Boston. (Boston Globe)
ENERGY/ENVIRONMENT
Environmentalist Bill McKibben offers two pieces of legislation in Massachusetts that could help address the impact of climate change. (CommonWealth)
CRIMINAL JUSTICE/COURTS
A single justice of the Supreme Judicial Court will hold a hearing tomorrow in a case involving allegations by a judge that he was deceived by District Attorney Rachael Rollins, whose office sought to drop charges against a Somali refugee who will otherwise face deportation. (Boston Globe)
MEDIA
Northeastern professor Dan Kennedy interviews Tom Stites about the failed efforts to get a news co-op off the ground in Haverhill. (Nieman Journalism Lab)