Lowell Walks is a series of guided walking tours of downtown Lowell on Saturday mornings throughout the summer. Each tour has a different topic led by a different tour guide. All tours begin at 10:00 A.M. from the Lowell National Historical Park Visitor Center at 246 Market Street in Lowell.…Read More »
Lowell Walks Thanks to Paul Marion and Rosemary Noon for the lively and insightful stories they shared during yesterday’s Lowell Walk. Thanks also to the 110+ people who participated which is up substantially from the 81 who attended last week’s inaugural walk on historic preservation. Today’s tour was on Lowell’s…Read More »
Lowell Walks – Lowell High We had another successful Lowell Walks tour yesterday: “Inside Lowell High School” led by Headmaster Brian Martin. 88 people joined the tour which began at the National Park Visitor Center and then moved on to Kirk Street, entering the building at the doorway under the…Read More »
Two weeks ago saw three different million dollar plus real estate deals in Lowell (Markley Group/Prince Spaghetti; Lowell Community Charter Public School/Mill No. 5; UTEC/Central, Prescott & Warren Streets). This week there was one deal of that scale: an apartment building at the corner of Stevens Street and Princeton Boulevard…Read More »
With no city council meeting on the Fourth of July holiday, this was a quiet week in Lowell politics. It was also the halfway point of 2015. This week I’ll take a step back and take a broader view on two fronts: the upcoming city election and the Lowell real…Read More »
John Edward, who teaches economics at Bentley and UMass Lowell, frequently contributes columns on economic issues. Here is his latest:
A single courageous State may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.
- Supreme Court Justice Louis Brandies
I do not want to get in trouble with PETA, but there is something to be said for testing experimental drugs on laboratory mice before exposing humans. No offense to the good people of Kansas, but I am glad they get to be the lab rats instead of us.
Kansas Governor Sam Brownback is the mad scientist, or economist. Using the people of Kansas as guinea pigs, he is testing theories about supply-side economics. No one should be surprised the experiment is failing. Everyone should be concerned about the serious problems his policies cause.
The supply side of our economy is vital. It is important that government policies promote production of goods and services. Economic growth requires a healthy supply side.
According to supply-side disciples, the key is lower taxes. The basic premise is that if you lower taxes for corporations and wealthy investors, you will encourage production.
It is not clear how much new investment the government promotes by reducing tax rates. To Governor Brownback the effect is very clear. He believed his tax cut policies would spur so much economic growth that total tax revenue would increase. That is the heart of the Kansas supply-side experiment.
Under Brownback, Kansas reduced both personal and corporate income taxes. He did nothing to replace the lost revenue. Brownback believed that would not be necessary. He thought increased business activity would more than make up for the shortfall.
He was wrong. Kansas tax receipts decreased by 3.8% last year. For all fifty states tax revenue was up 2.2%. Kansas lost 300 million in revenue. As stated by Bloomberg: “Alas, reality trumps theory. As we have seen almost every time this thesis has been put into practice, it fails. The tax cuts don’t magically kick the economy into higher gear and the government ends up short of money.”
Governor Brownback had not planned any spending cuts. When his experiment failed Brownback had created a $400 million deficit and cuts were unavoidable. The people of Kansas are now suffering big reductions in investments in education and road maintenance. Job growth in Kansas is well below the national average. Credit agencies have downgraded Kansas’ credit rating. These side effects of the supply-side experiment will impair economic growth in Kansas for years to come.
However, Brownback is undaunted and preaching patience. He is proposing an increase of the regressive sales tax that will hurt the poor. Ironically, Brownback is now considering what must be a desperate step for him. He may allow Kansas to accept Medicaid expansion under Obamacare – a program he intensely opposed while serving in Congress.
We have been down this road before. A supply-side experiment was a big part of Reaganomics. That failed as well. Reagan passed a big cut in federal tax rates. Tax revenue went down.
At least when President Reagan adopted supply-side policies there was some justification. We were suffering from stagflation. Therefore we desperately needed an increase in supply. Tax rates were relatively high, with the rate on the highest income earners at 70%.
President Wilson cut taxes when the top tax rate was 77%. When President Kennedy cut taxes it was 91%. In those cases the tax cuts did result in an increase in tax revenue.
However, when tax rates are already low, it will not work. President George W. Bush reduced the top tax rate from 39 to 35%, tax revenue went down, and he turned budget surpluses into a large deficit.
Governor Brownback cut the income tax rate that most Kansans pay from 6.45 to 4.8%. State income tax rates are much lower than federal rates and inherently have much less impact on economic growth. There was no reason for Brownback to repeat a failed experiment.
Lately many conservatives have abandoned the supply-side myth. They still advocate cutting taxes. However, they no longer endorse the illusion that tax revenue will magically increase.
As reported by The Washington Post: “[supply-side] ideas have also grown out of fashion with much of the mainstream economic community. There is an entire branch of economic literature that uses detailed equations to show cutting top tax rates does not spark additional growth. Most recently, the University of Chicago’s Owen Zidar showed that the biggest gains from tax cuts come when rates are reduced for low-income workers.”
The last point is important. Brownback and other supply-siders emphasize tax cuts that predominately favor the wealthy. However, cutting taxes for low-income earners, more progressive taxation or increasing the minimum wage would be more effective policies for promoting economic growth.
The supply-side failure has become a serious burden for the residents of Kansas. The rest of the country is now at risk. Some of the Republican presidential candidates are endorsing the supply-side ideology. For some of the candidates, it might be an attempt to starve the beast and force cuts in government spending.
For the unaware, there is a visceral reaction to the promise of lower taxes. After all, politicians tell us there is no price to pay. People want to believe in supply-side economics. Just be aware – there is a price to pay. Do not buy the argument that a lower tax for high-income earners and corporations is a free lunch.
Here are Lowell real estate sales from last week. The last day of June is always a busy one for sales but with Friday being the day before the 4th of July, activity really fell off by the end of the week.
June 29, 2015 – Monday
65-67 Gates St for $355,000. Prior sale in 2007 for $310,000
55 Twiss St for $415,000. Prior sale in 2001 for $98,000
336 Central St for $825,000. Prior sale in 1999 for $400,000
20 Woodland Dr Unit 375 for $189,473. Prior sale in 2009 for $190,000
1461 Pawtucket Blvd Unit 9 for $129,900. Prior sale in 2008 for $144,000
140-142 Adie Way for $309,900. Prior sale in 2001 for $250,000
78 Gage St for $150,000. Prior sale in 1996 for $28,000
144 Chelmsford St for $8,250,000. Prior sale in 2008 for $8,900,000 (M/A-Com)
240 Jackson St Unit 603 for $191,000. Prior sale in 2007 for $200,000
1227 Lawrence St Unit 102 for $120,000. Prior sale in 1998 for $38,500
June 30, 2015 – Tuesday
1239 Lawrence St Unit 103 for $124,780. Prior sale in 2010 for $125,000
80 Rogers St Unit 104 for $219,900. New condo
52 Main St for $255,000. Prior sale in 2014 for $58,000
1461 Pawtucket Blv Unit E2 for $120,000. Prior sale in 1984
70 Fairmount St for $425,000. Prior sale in 2013 for $337,500
120 Dalton St for $160,000. Prior sale in 1979
796 East Merrimack St for $341,000. Prior sale in 2009 for $280,000
46 State St Unit 46 for $185,000. Prior sale in 2007 for $195,000
458 Westford St for $230,000. Prior sale in 2000 for $103,900
301 Mammoth Rd Unit 8 for $165,000. Prior sale in 2004 for $162,000
85 Douglas Rd for $330,000. Prior sale in 2009 for $164,900
200 Market St Unit 4501 for $152,500. Prior sale in 2004 for $155,000
270 Lincoln St for $247,5000. Prior slae in 2013 for $195,000
1520 Gorham St for $350,000. Prior sale in 1997 for $125,000
1225 Pawtucket Blv Unit 120 for $145,000. Prior slae in 2004 for $158,000
115 Columbia Rd for $240,000. Prior sale in 1976
92 Stevens St Unit B for $180,000. Prior sale in 1990 for $88,500
July 1, 2015 – Wednesday
78 Boisvert St for $285,000. Prior sale in 2003 for $285,000
945 Middlesex St Unit 7 for $229,900. New condo
47 Nineteenth St for $249,900. Prior sale in 2004 for $227,000
2510 Skyline Dr Unit 12 for $152,000. Prior sale in 2007 for $161,000
417 Hildreth St Unit 23 for $177,500. Prior sale in 2007 for $225,000
115 Avon St for $330,000. Prior sale in 1951
142 Eighteenth ST for $300,000. Prior sale in 2003 for $299,900
25 Morey St for $223,622. Prior sale in 2000 for $139,900
200 Market St Unit 302 for $182,000. Prior sale in 2009 for $182,500
491 Dutton St Unit 513 for $215,000. New condo
July 2, 2015 – Thursday
86 Rock St for $185,000. Prior sale in 2015 for $132,000
295 Pawtucket Blv Unit 22 for $45,000. Prior sale in 2002 for $50,000
549 Pine St Unit 17 for $94,900. Prior sale 2015 foreclosure
396 East Merrimack St Unit 402 for $100,000. Prior sale in 1990 for $79,900
57 Butterfield St for $236,000. Prior sale in 1980
811-815 Central St for $350,000. Prior sale in 2015 for $196,000
351 Pawtucket Blv Unit 9 for $90,000. Prior sale in 2007 for $106,000
7 Lyons St for $90,000. Prior sale in 1976
113 School St Unit 7 for $105,000. Prior sale in 2009 for $123,000
517 Westford St for $290,000. Prior sale in 2014 for $205,000
4 Barton Ave for $250,000. Prior sale in 2015 for $181,000
July 3, 2015 – Friday
224-226 Mt. Hope St for $370,000. Prior sale in 1987
With no city council meeting on the Fourth of July holiday, this was a quiet week in Lowell politics. It was also the halfway point of 2015. This week I’ll take a step back and take a broader view on two fronts: the upcoming city election and the Lowell real estate market.
City Council election
The late Paul Sullivan used to say that from the 4th of July until Labor Day, candidates in a Lowell election would be better off campaigning at Hampton Beach than in the city because so many residents spend their summer at the seashore. While I don’t think that is entirely true, it does make the valid point that many tune out politics during the summer.
The big question in the council race is whether Jim Milinazzo and Bill Martin will run for re-election. The other seven incumbents have all kicked off their reelection campaigns as far as I can tell. School Committee member Dave Conway is running for the council this year. Given his past electoral performance and the relative intensity of his campaign, he would have to be considered a strong contender.
Former City Councilor Vesna Nuon is also running as is Paul Ratha Yem who sought the Democratic nomination for the 18th Middlesex Representative district last year. Another Cambodian-American resident, Cheth Khim, also plans to run for city council. A few weeks ago some lawn signs for Jordan Gys for City Council popped up in the Highlands. Here’s how Gys introduces himself on his website:
Having been born in Lowell and having spent much of my life here I have come to love this city I call home. Having helped organize Lowell for the Baker – Polito campaign I have spoke with many of Lowell’s citizens and heard their thoughts and concerns. I found I shared in their optimism for our future as well as the desire to be better. I decided to run for city council because I love Lowell and while I respect the work our current city council has done I believe success is never final. As a millenial I will bring fresh and innovative solutions to solving our cities problems. Ahead of me is a long and difficult journey. But I strongly believe at the end of that road is not only a better future, but a better Lowell.
I assume there will be other candidates. [Ed. Note: There is at least one other: Former councilor Joe Mendonca plans to run this year which I inadvertently omitted from my initial post]. Sorry if you are one and I’ve missed you. Please leave a comment if you’re already in or are planning to join the race.
As for the outcome of the race, I would say that any incumbent that runs is in pretty good shape. I’m not seeing any of the challengers making the case for change; they’re running “I’d be a good councilor, too” types of campaigns. More importantly, it seems the Lowell Sun is quite content with the direction of the city. The Sun is certainly not monolithic in driving community sentiments, but the newspaper does carry an outsized influence with the majority of the 10,000 or so people who regularly vote in city elections. That group is older, whiter and more conservative than is the city at large. In other words, it’s the core demographic of the Sun. As we saw in the last election with losses by Marty Lorrey and Vesna Nuon, the newspaper is still effective at negatively targeting incumbents but that doesn’t seem to be part of the plan this year.
School Committee election
Change to the city council may be a remote possibility at this point but change to the school committee is a certainty. Three of the six incumbent committee members are not seeking reelection. As noted above, Dave Conway is running for city council and just this past week, Kim Scott and Kristin Ross Sitcawich both announced they would not seek reelection to the school committee. The other incumbents – Connie Martin, Jim Leary, and Steve Gendron – all appear to be running for reelection.
Two former school committee members, Bob Gignac and Bob Hoey, are both running as is Andy Descoteaux who just retired this year as a music teacher at Lowell High School. First time candidate Kamara Kay is also in the race. There may be others. As with city council candidates, if you are running and I’ve omitted your name, please let me know.
With three open seats, it would not surprise me to see others jump into this race. Normally a new candidate would have to have a campaign well underway by now to stand a chance, but having 50% of the seats of an elected board vacant of incumbents is not the normal circumstance. Between the ouster of Superintendent Jean Franco, the selection of her replacement, the stalemate with the teachers union over a new contract, and the possibility of a new Lowell High School, there are plenty of issues to be discussed in the upcoming school committee race. Whether they will be discussed or ignored is still open to question.
Hamilton Canal District
Nothing new to report this week on the Hamilton Canal District. A tweet by Banker & Tradesman this past Thursday did catch my eye. It said “Trinity Financial Buys Two Dorchester Parcels for Transit-Oriented Housing Complex.”
Trinity Financial is the former Master Developer of the Hamilton Canal District that parted ways with the city (maybe it was the city that parted ways with Trinity) earlier this year. Before that split became official, there was much grumbling about the lack of activity being shown by Trinity. While such complaints were to be expected from some quarters, even some who were allies of Trinity were quietly expressing concern that the developer was focused on projects in other parts of the state rather than Lowell.
This recent news sort of corroborates that sentiment. Here’s part of the story about Trinity’s efforts in Dorchester:
Boston-based Trinity Financial has completed its acquisition of two parcels in Dorchester’s Peabody Square where an 81-unit mixed-income residential complex is expected to break ground in early 2016. The six-story development at the Ashmont Tire property will include 39 condominiums and 42 apartments, said Kenan Bigby, vice president for Trinity Financial. All of the rental units will be reserved for qualified affordable tenants, with a 50-50 split between those earning no more than 100 and 80 percent of the area median income. Four of the condos will be income-restricted. The project also includes 4,000 square feet of retail space. Trinity paid $3 million to acquire the parcels at 1961-1987 Dorchester Ave. and 4 Fuller St. on June 26, according to Suffolk County Registry of Deeds records.
Here’s a story from the Globe from a year ago about a Trinity Financial mixed-use development in Dorchester and here’s one from last July that was in the Dorchester Reporter about Trinity’s efforts in Dorchester.
As I mentioned in last Sunday’s post, it does seem like the new Lowell Courthouse is on track with the extension of Jackson Street to occur this summer and a courthouse ground breaking expected in 2016. What to do with the tour buses that visit Lowell National Historical Park still seems to be a roadblock, but City Manager Murphy stated at a council meeting earlier this month that he would soon move to “Plan B” if the city was unable to reach some agreement with the LRTA about parking these transient buses on Hale Street sometime soon. My guess is that if the bus parking isn’t resolved by Labor Day, the city will begin implementing another option.
Lowell Real Estate
Earlier in June there were several million dollar real estate deals I wrote about previously. The month ended on a quieter note but the end of June also signaled the half way point in 2015 so now is a good time to look at some trends in real estate. The market in Lowell does appear to be strengthening. The number of Lowell deeds recorded in June was up 20% from June 2014 (463 in June 2014; 556 in June 2015) and the number of mortgage recorded was up 33% (695 o 927). The number of deeds recorded came on strong in June because pervious months had shown a drop from the prior year. For the first six month of 2015, the number of Lowell deeds recorded was down 2% from the same time in 2014 (2227 down to 2186). The number of mortgages was up considerably, increasing 39% in the first half of 2015 when compared to the same time in 2014 (3039 to 4212).
Home values seem to have flattened. The Lowell Assessors track sales by type of property (residential, commercial, etc) while the registry of deeds just has overall sales without regard to usage, so the assessors would have more accurate data. Still, information derived from deeds being recorded is useful to help paint the bigger picture.
Tossing out deeds of less than $50,000 or more than $1 million, the median price of a property sold in Lowell during the first half of 2015 was $210,000. That’s a 1% increase from the 2014 median which was $208,167.
Using the same formula, here is the median price of property sales in Lowell on a year by year basis with the percentage change from the previous year shown in parenthesis:
2000 – $140,000
2001 – $162,000 (+16%)
2002 – $187,375 (+16%)
2003 – $217,000 (+16%)
2004 – $238,600 (+10%)
2005 – $254,900 (+7%)
2006 – $247,000 (-3%)
2007 – $225,000 (-9%)
2008 – $184,900 (-18%)
2009 – $178,500 (-3%)
2010 – $180,000 (+1%)
2011 – $170,000 (-6%)
2012 – $175,000 (+3%)
2013 – $195,000 (+11%)
2014 – $208,167 (+7%)
2015 – $210,000 (+1%) January thru June
The good news from these numbers is that if you bought your home in 2000, its value has increased by 50%. The bad news is that if you bought it between 2003 and 2007 (or refinanced and extracted equity), there’s a very good chance you are “underwater” on your mortgage, meaning you owe more than the property is worth. That’s fine as long as you are able to keep making your monthly mortgage payments. The problem occurs when your income is disrupted, usually by illness, divorce, death, or some other change of circumstances. With less income, mortgage payments are missed and you are on the road to foreclosure.
While the end-of-June and midyear statistics for deeds and mortgages look good, the number of foreclosures are up, too. In June, for instance, the number of foreclosure deeds rose 1000% from the previous June. That startling statistic is less onerous when you consider that last June there was just a single foreclosure while this June here have been eleven. For the half-year, the increase was 37% (35 rising to 48).
Friday on the LowellDeeds blog, I took a closer look at rising foreclosures throughout Greater Lowell. What I found tended to corroborate that current foreclosures represent the residue of the housing bubble and its bursting and are do not involve newer, post housing market collapse mortgages. Here’s some of what I wrote on the LowellDeeds blog:
Four of the mortgages that were foreclosed were obtained at the same time the property was purchased. One was from 2003, two from 2005, and one from 2006, with down payments of 5%, 11%, 25% and 25%). Two other mortgages were on properties that had been received by the borrowers as gifts. One was a $283,000 mortgage from 2004 on a property that was obtained in 1989 for $1; the other was a $287,000 mortgage from 2014 on a property that was obtained in 2009 for $1.
The eight remaining mortgages all involved refinancings in which the borrower had purchased the property earlier with another mortgage, but then obtained a new, post-purchase mortgage which is the one that was foreclosed. The following list shows the dates and amounts of the mortgages, followed by the dates and amounts of the purchase deeds:
- 2003 mortgage of $215,000; 1998 deed of $158,000
- 2004 mortgage of $252,000; 2003 deed of $265,000
- 2005 mortgage of $185,000; 1999 deed of $97,000
- 2005 mortgage of $280,000; 2001 deed of $305,000
- 2005 mortgage of $222,000; 2004 deed of $278,000
- 2007 mortgage of $389,000; 2005 deed of $360,000
- 2007 mortgage of $339,000; 1996 deed of $153,500
- 2009 mortgage of $348,000; 2004 deed of $175,000
Joseph Plumb Martin was born in 1760 in Western Massachusetts and enlisted in the Continental Army as a teenager at the start of the war and served for the duration. In 1830, he anonymously published a memoir of his service called A Narrative of a Revolutionary Soldier. I picked up the book expecting a first person account of desperate battles. There were a few of them but mostly this was a book about starvation and privation. Here’s a sample in Martin’s own words:
At one time it snowed the greater part of four days successively, and there fell nearly as many feet deep of snow, and here was the keystone of the arch of starvation. We were absolutely, literally starved; I do solemnly declare that I did not put a single morsel of victuals into my mouth for four days and as many nights, except a little black birch bark which I gnawed off a stick of wood, if that can be called victuals.
The book goes on like this year after year after year. It is a graphic reminder that America won the Revolutionary War by not losing it, with a relatively small number of men who served in the American army enduring tremendous hardships for many years.
Local literature provides a glimpse of the plight of Revolutionary War soldiers. Here’s a passage from History of Chelmsford by Wilson Waters. Written and published in 1917, Waters relied heavily on original documents for much of his text. In this passage, he quotes from the papers of C. O. Robbins:
The soldiers who fought in the Revolution had to foot it home if they survived the British bullets and the diseases which killed many of them. They were a miserable lot. They had to beg food and sleep where they could. They dragged themselves home. Dr. Marshall, who lived in the present residence of Mr. C. W. Byam, came home one day in December, 1776, and said he did not like the smell in the house, and asked if any soldiers had been there. The answer was that one had stopped there. The doctor’s fears were realized. His wife and two children died of the small-pox; the soldier also died on the same disease. Mrs. Marshall was a lovely woman, and the doctor was broken-hearted.
Given the significance of today’s date, I scoured Waters’ book for mention of the Declaration of Independence and the impact it had on Chelmsford. Waters did not fail me, providing an excerpt from a journal kept by one of the town’s ministers:
September 1, 1776 – After today’s service, read the declaration of independence of the United States of America in the public congregation, agreeable to the order of the council of this State. And when I had done, added “Zion heard and was glad and the Daughters of Juda rejoiced because of your Judgments, O Lord.”
Upon the signing of the Declaration of Independence two months earlier, John Adams wrote to his wife:
[The date of the signing of the Declaration of Independence] ought to be solemnized with pomps, shows, games, sports, guns, bells, bon-fires and illuminations from this time forward forever.
John Adams would undoubtedly approve of our modern method of observing Independence Day. He would probably also urge us to remember the sacrifice of those who served in the Army during the war. It was their almost superhuman endurance and fortitude that made the Declaration one of the foundational documents of the United States of America and not a death warrant of all who signed it had the war been lost.