— Bill Wendel (@RealEstateCafe) September 1, 2016
If “Foreign buyers at Millennium Tower show that Boston is on a world stage,” is that was a good thing? Apparently not, if you scan over 130 comments from Boston Globe readers:
http://bit.ly/BOSSpecuTower (share via social media)
Across the river in Cambridge, concerns about soaring housing prices were mirrored by 80 neighbor-to-neighbor comments after one member of NextDoor, a neighbor-only site, expressed concerns about “how many members of the “public [hearing on affordable housing]” were developers, and how few were residents and advocates.”
Despite shared concern about rising costs, the gap between the two threads revealed a hidden problem: how little is known about the role foreign buyers are playing in the current speculative cycle and their short and long-term impact on affordability. What we do know is that:
- Millennium Tower opened their sales center in China before the Boston,
- Gibson Sotheby’s just announced a joint venture to bring more foreign buyers into our overheated housing market,
- Blog posts appeared in online editions of Forbes & Financial Times, hyping Cambridge with distorted stats,
While some some developers are trying to limit sales to investors to protect resales, a marketing consultant told the Boston Globe:
“It’s a little bit like holding back a tidal wave at this point,” … “There’s a much bigger market out there than anybody has tested.”
Why should “ordinary people” care? Global real estate speculation is not limited to luxury towers; and even if it were, two articles in the New Yorker begin to explain indirect social costs:
Real Estate Goes Global
http://bit.ly/GlobalRE_NYKr2014 (share via social media)
Why The High Cost of Big-City Living Is Bad For Everyone
http://bit.ly/HighCostCities (share via social media)
Others fear that the housing market is being driven by external or shadow demand; #SpeculatorsWithoutBorders and more could make Housing Bubble 2.0 worse than the one a decade ago:
Housing Bubble 1.0 vs. Housing Bubble 2.0 – The Culprit is “Shadow Demand” … Again!
http://bit.ly/ShadowREplay (share via social media)
Finally, our concerns about spiraling prices and research into unprecedented bidding wars were underlined by this recent article:
“…going back to 2013, recall that the People’s Bank of China allowed Chinese companies to lend money in renminbi to their offshore branches without any limit and without any requirement for them to first notify regulators.
That essentially meant that companies could transfer money out of China without having to worry about capital controls. Home prices started increasing strongly around the world since around that year.”
How can we raise awareness about #SpeculatorsWithoutBorders? Here are two idea starters:
IDEA STARTER 1: Host Virtual Town Hall
Groups in Vancouver are hosting an affordable housing rally at 2pm (5pm our time) on Saturday, September 17. Should we revisit an earlier proposal to host a virtual town hall meeting to learn more about their devastating new 15% tax on foreign buyers? Ideally, the virtual town hall meeting could include others cities negatively impacted by #SpeculatorsWithoutBorders like the Bay Area, Seattle, Toronto, and New York.
IDEA STARTER 2: Use humor to raise awareness about #SpeculatorsWithoutBorders
We’ve shared this idea with a number of insiders, and invite feedback on using LAUGHTivism to expose #SpeculatorsWithoutBorders. Should we play with the idea sometime over beer at one of our #REonTap sessions?
http://bit.ly/LaughRE (share via social media)
PRACTICAL NEXT STEPS
Bidding wars are blind, so unless someone spills the beans, first-time homebuyers may not know that they’ve been outbid by a foreign buyer. However, if the same buyer or investor pool turns that purchase into an AirBnb unit, it may be easier to spot and:
- Report to public officials monitoring the problem or Cambridge Inspectional Services if the units violates the city regulations.
- If short-rentals violate your condo by-laws or threaten to undermine financing options and resales, report to your condo association.
- Finally, if you’d simply like to sound off about the problem, record a one minute sound bite using this link via lap/desktop or your smartphone. We’ll share it with Senator Elizabeth Warren’s staff, as Congress is investigating whether “short-term rentals may be exacerbating housing shortages and driving up the cost of housing in our communities.”