Maxpak is going to be rentals

[pjmorgan.livejournal.com]

Just came back from presentation by KSS and their new Maxpak partners (Gate Residential) on proposed changes to the Maxpak development that will be put before the zoning board on Thursday evening. They were presenting on the remaining 184 units to be developed. (15 townhouses have already begun construction in partnership with another firm, those will stay individually owned.) They want to construct the remaining now from 2011-2013, and those will be rentals.


I expected it to be a boring, non consequential meeting about floor area ratios changing by .01% and colors changing tints. The changes they are asking for are actually what commonly are called favorable: slightly decreased heights, a little more landscaping, some architectural changes that seemed OK and non consequential to me.

The potentially huge change I learned is that the remaining units will be rentals. I guess this was announced last week in a press release (posted on ward5online.com) but this was the first I learned of it, and only by accident in the Q&A portion. It wasn't part of their presentation because I guess they don't need permission to change from one kind of residential to another.

However, I feel the community should have more time to digest this, and I feel that allowing 199 units, which is above allowed zoning, was allowed with the expectation everything would be condos. But the zoning meeting is in 2 days.

I'm not sure yet how I fell about 184 rentals, 384 bedrooms added to my neighborhood. I have positive and negative feelings...I'm sure those could be debated in this thread. One positive is that that when the green line and community path extension happen a couple years later, the rental turnover will bring people who don't favor cars, whereas condo owners wouldn't turnover as quickly.

I think I just want more time to think about it. I realize its been a long process, and I kind of think that it's absurd that a process should take this long, but given that it does, for this HUGE detail to change so late feels like a bait and switch. I realize the current market dictates this and that they could always convert to condos later on. And these will be high quality buildings. And I'm not sure I really have a problem with it, but I'm not sure yet.

Comments

[smoterh.livejournal.com]

I think there is few things to remember about this, especially when it comes to concerns of rentals vs condos:
-rental properties pay higher taxes, since they don't qualify for residential exemption ($20 per $1,000 vs $12 for $1,000 for residential exemption)
- typically large rental complexes, that are not public or subsidized housing, are well maintained, so the look of the hood shouldn't suffer

[ron_newman]

At Day and Orchard streets, I'm in a 50-unit brick apartment building built in 1929, and there are four other similar buildings within a block. We may be more transient than the occupants of the surrounding single, two- and three-family houses, but we certainly don't bring down the neighborhood in any way.

[pjmorgan.livejournal.com]

But is the lack of residential exemption offset by lower valuations?

[masswich.livejournal.com]

Yes it is. Rentals generally pay less in taxes than owner occupied units.

[smoterh.livejournal.com]

That is exactly the oposity. I'm an live in my own condo and also rent out and apartment. My taxes for my condo are lower (because of residential exemption) then for the rental unit.

[masswich.livejournal.com]

Yes, for a small building you are right. I too have an owner-occupied and a small rental property and the rental property pays more in taxes than the owner-occupied.

But a large rental complex is valued at a lower value than a large condo complex, at least in my experience. Even with the residential exemption I think the per-unit taxes end up being lower. This is a large project.

There are also Proposition 2 1/2 issues related to the City's overall tax base that make condos preferential to rentals. That's why cities love condo conversions- they allow the overall levy base to go up, even if the individual owner uses a residential exemption to lower their personal tax bill.

[pjmorgan.livejournal.com]

The sum of the parts, if the parts can legally be sold separately, regardless of whether they are rented or owner occupied at the moment, is more valuable than the whole.