July 08, 2010

Main South Project

Another ribbon cutting story in today's paper, click here.    Before I get called negative, let me say that the project really does look good and I support these home-owner occupied townhouses units before recently densely constructed 100% affordable rental projects with no parking like May Street, Southgate Place or Piedmont Street.

What never ceases to amaze me, however, are the costs
  • 2.7 million for 10 units
  • $270,000 per 1,250 square foot town house
  • 216 dollars per square foot. 
That is real expensive.  

To top it off the sales proceed are suppose to come in at 1.3 million.    In other words, in the the end the project will be negative 1.4 million dollars.  Truthfully how can we afford to keep building projects when each time a unit is sold, we lose 140,000?


Paulie's Point of View said...

units costing $270,000.00 to build and selling for $130,000.00...why buy one of the numerous three deckers in District Four when one can get one of these deals..

they should have made Kilby into one big forest like they are doing in Detroit and other hoods similiar..bring down the footprint!

Isn't Woo lucky that Billy Breault is leading the charge for it's urban renewal

Jahn said...

Hey Paulie, I got one for ya How about$500,000 to $600,000 to move a 3 decker that is then sold for 169,000. Main South CDC did it 4x. Some never learn from their mistakes.

Paulie's Point of View said...

these CDC's are doing nothing special with this kind of money..anyone could do it...now that times are tough they are stuck - Mason Street and the other landbanked properties are proof...Kilby reminds me of that Jim Carrey movie where everyone is watching him grow up in this perfect World..and then it crashes!

I would be smiling to if I got a $270,000 unit for $130,000...

A local report came out a number of years ago about just knocking down some of these three deckers..8-10 Winfield is a perfect example..two many buildings on a small foot print..this should have been done to Kilby..then trees planted and let it grow wild

Paulie's Point of View said...

when is the Mayor gonna get in a bus and look at Artie Mooradians buildings on Chandler...White Cleaners and the three decker..private funds and both models for the strip...the more and more I hear our leaders praise this hossshite the more I think that guys and gals with real money who also hear this say "I am putting my money elsewhere..that city is run by morons"...am I the only one who wonders why Woo missed the last two RE booms?

JSF said...

Bill wrote: "Truthfully how can we afford to keep building projects when each time a unit is sold, we lose 140,000?"

We'll make it up in volume :)

Jahn said...

What is not mentioned in this article is that these nice looking townhouses (duplexes) on Beacon St are really not much different than a Rte 20 trailer park, excpet the duplexes are not easily relocated.

How can that be one asks?

Well you see these low income housing advocates only sell the house (or 1/2 of a duplex depending on your perspective) to the aspiring NOLO buyer. Guess who still owns the land? Yup, Main south CDC.

These captains of the low income housing industry in Main South who claim they want to "uplift" the tenants of Main south by getting them into their own home where they can build equity are precluding the low income housing owners from participating in the increase in land value b/c they do not let the NOLO buyer actually buy the land.......they (MSCDC) long term lease the land to a NOLO owner who only owns the structure (or 1/2 strucuture) and not the land. So that's why I have referred to this as the trailer parking of Main South.

The reality is that in any RE investemnt the real appreciation is in the increase in value of the land during an owners tenure. The structures require constant maintenance while the lands only maintenace is a small fraction of the property tax bill that is attributable to the land.

This is not a completely a perfect analogy, but anyone ever see a commercial deal where a building is erected on leased land. Guess what happens to the building as it nears the end of its lease....the building owner lets the maintenance go to hell... can you blame him?

I suggest that years from now these used 1/2 duplexes will be a tough sale, given that the sale will not include the land they sit on. For example, How much would you pay for an 18 yr old 1/2 duplex on leased land, on Beacon St nonetheless.

Hey it was good to see that the 4th July weekend in Worcester was not marred by any violence (that I know of?)

Jahn said...

I pulled this one example up from the city website. Many of theses duplexes that I referred to above are in the #170's and 180's address range on Beacon St.

Note the owner of record is not the person who bought the 1/2 duplex, but instead MSCDC.


This how MSCDC ensures its ultimate survival. They keep their hands in the rental business (apts) and in the fuedal landlord business by leasing their land to the poor downtrodden sharecroppers and serfs, for lack of a better term. I am not knocking the folks who bought these, if anything they may deserve some sympathy for their ultimate plight when they go to sell and realize how little equity they really have in their so called home.

Sometiems I feel like becomign a community organizer and bring togeterh all the peopel who are stuck in this situation on Beacon st (and others) and starting a public outcry over the fact that the owner/occupants of these places do not own the land they live on.