New Bedford Mayor Mitchell: Housing Situation Is Concerning
New Bedford Mayor Jon Mitchell said the rising cost of housing isn't only impacting the big cities these days, but smaller cities such as New Bedford are feeling it too. Mitchell said "rents are going up" and "housing sale prices are going up, too."
Bloomberg.com reports, "The Snowballing U.S. Rental Crisis Is Sparing Nowhere and No One." An Atlantic.com headline shouts, "Why the Rent Inflation Is So Damn High." An MPAMag.com piece says, "U.S. Rent Prices Rising Four Times Faster Than Income."
It's not just New Bedford and Fall River.
Mitchell said low-interest rates allowed people to purchase second homes. Many of those second homes are used to generate income through Airbnb.
"You can still deduct a second home off your taxes, so Uncle Sam actually creates a financial incentive to go out and buy a second home," Mitchell said.
Mitchell said that tends to reduce the overall supply of homes.
The cost of building supplies and labor as well as rising interest rates hamper new home construction.
Mitchell said there is limited space in New Bedford where new home construction could occur. He also said there is more incentive for contractors to build new housing units in cities such as Boston and Providence where they can demand higher rent than in New Bedford. Mitchell said developers can get "three times the rent building in Boston."
When subsidies are "added to the mix" to make rents more affordable the properties can be tied up for as long as 30 years.
Mitchell said some owners of three-family homes in New Bedford are asking for "crazy money" thinking the property values will soar once South Coast Rail is complete.
"People should not be under the illusion that somehow we're going to become a bedroom community of Boston – they're too far away," he said.
Mitchell said South Coast Rail is "not going to usher in a lot of wealthy folks into the city. It's just not going to do that." He said the roughly 95 minutes each way commute by rail to and from Boston is just too long to do five days a week.
Mitchell said residents should view South Coast Rail "not as commuter rail but as intercity rail, an option to get to Boston."
"Commuter rail is something we should exorcise from our vocabulary as it relates to this project," he said. "This is not going to be a commuter rail."
While Mitchell said that "the housing situation is concerning," he advised that South Coast Rail will do little to change the situation one way or another.
Mitchell said had the state offered him a billion dollars for the rail project or a billion dollars in cash to spend on projects in New Bedford, "I would have taken the cash option."