Flipping

May 26, 2006 psipsina

On my way home from the grocery store tonight, I noticed that another two-family house in our neighborhood has gone condo.

I find this distressing.  A community needs rental units, because not everyone can buy a home, and American Dream notwithstanding, not everyone should.  And in my experience, the best rental units are in 2- or 3-family owner-occupied properties.  You know the landlord is going to take good care of the property, because he lives there too.  And if something breaks in the middle of the night, there’s someone there to deal with it.  After four years of living in an apartment where the landlady lived an hour’s drive away and acted as if I were imposing on her if there were an emergency in the middle of the night, I can attest to the value of being able to walk downstairs and knock on the door, if necessary.  (My former landlady once refused to come out at 10 o’clock one night to restore my electricity after the main circuit breaker blew.  The reason I couldn’t reset the breaker myself was that she had changed the lock on the basement, which could only be entered from outside, without giving me a new key.  The reason it wasn’t acceptable to wait until morning to reset the breaker was that, near as I could tell, everything in the entire freakin’ apartment except the bathroom light was on one breaker – which is probably why it blew in the first place.  I would not take no for an answer.  I made her come and let me into the basement.  And I spent the rest of my time in that apartment wondering when the place was going to burn down.)

The owners of two-family properties benefit, too – they are never stuck with undesirable neighbors for more than the length of a lease.  If you live in a condo in a two-family house, you could be stuck with your sub-woofer-addicted potsmoking Deadhead neighbors for thirty years.  (Maybe you’ll be lucky and they’ll grow out of it in ten.)

Every time I see one of those “Condominium for Sale” signs in front of a two-family house, I think that Somerville is becoming just a slightly less nice place to live.  And it makes me sad.  Not just because Somerville is losing its best rental stock, but because all too often the presence of a condo in a two-family house means someone is flipping the property.  And flipping is always bad news, because it’s one factor that drives real estate bubbles like Boston’s.

Flipping, if you are not familiar with the term, is where an investor buys a property, make a few improvements, and then sells it at a huge profit just a few months later.  Here’s a typical scenario.  The owners of a two-family house decide to sell.  They put the whole house up on the market; an investor comes along and buys it.  The investor does a little work, most likely in the kitchens, since everyone LOVES nice kitchens, splits it up into condos, and sells it at a huge profit.  And in overpriced housing markets, like Boston’s, first-time buyers can’t possibly afford single family houses anywhere practical, so they have two choices:  they can move further and further away from the center of things, trading time for money by commuting for an hour or more each way so they can afford a house, or they can buy a condo closer to town.  (There is a third option, of course, which is to buy a two- or three-family property and rent out the other units, but these are becoming rarer because they are getting snapped up by the flippers.)  So condos are immensely popular, and the flippers know it and, frankly, charge more than they are worth because for every sensible person who walks away from the price, there are ten people who for some strange reason are dying to tie that millstone known as a mortgage around their own necks.

So flipping condos drives real estate prices up while simultaneously reducing the number of decent well-maintained rental units in a community.  This stinks of gentrification.  I suppose it’s weird to talk about the gentrification in Davis Square.  Twenty years ago this neighborhood was seedy, and now it’s vibrant.  There are those who would say it’s already gentrified.  But Davis Square is still loaded with college students, recent grads, and young professionals, which means that there is still affordable housing stock.  But I can see the writing on the wall.  Soon no one except the people who benefited from the latest Bush tax cut will be able to live here.

And honey, that ain’t me.  Or anyone in this neighborhood that I know.  Hell, this is Somerville, one of the bluest towns in this bluest of states.  Most of the people I know in this neighborhood would tell Bush to take his tax cut and shove it up his rectum.  Except they’d use different word.

Mood:  Depressed.

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