Newsletters of the PHCC of Greater Boston

From the desk of Hugh Kelleher, Executive Director

Email Hugh with comments or suggestions for future items.

Casinos: Talks are continuing on Beacon Hill on a deal that would start casino construction in Massachusetts. Governor Patrick, Speaker DeLeo and Senate President Murray want to have details ironed out before there is too much public attention. They want to avoid the kind of public breakdown of casino negotiations that occurred last year.

Filenes: Vornado Realty of New York, owners of the big Filenes pit in Downtown Crossing, remains unwilling to do anything with the property at current market prices. Mayor Menino is furious, but there is nothing he can do. The city has already rescinded Vornado's building permits. Expect Vornado to thumb its nose at the city until it can make a big profit by selling the site.

High Rents: Boston-area rents have reached record highs, and people are scrambling to find apartments prior to September 1 the classic date when students flood into the city. The Boston Globe reports that the vacancy rate has dropped to its lowest level since 2002. Over the past decade, 20,000 new graduate students have been added to the Boston area. Our city is the fifth-most expensive rental market in the country. Only parts of New York City and its suburbs, and San Francisco, are more expensive.

Build Rental Apartments! Developers are very aware of the apartment shortage, and many are rushing to fill the market. Expect to see a number of large apartment projects break ground over the next year.

Housing Starts Jump: The Washington Post reports that housing starts nationwide jumped over 16% in June compared to a year earlier. The increase was much higher than analysts had predicted. Some were puzzled, since there are still millions of homes across the country in foreclosure. Turns out, most of the new construction is for rental apartments. People who are losing their homes become renters. Home Foreclosures: Nationwide the trend has slowed. Reason: the banks are taking a brief pause as a result of having used improper mortgage documentation. But it is expected that there will be a second wave of foreclosures once the banks get control of their paperwork.

Condos: Although much of the housing market remains sluggish, high-end condos in Boston are doing very well. Citywide, the median price condo is now $487,000 -- nearly back to where it was in 2008. But the increase is largely due to sales of some very expensive condos in downtown Boston and the Back Bay. Two ultra units at the Mandarin Oriental were sold in June. Each fetched more than $12 million.

Thanks! To the dozens of company sponsors who supported this summer's PHCC of Greater Boston Golf Outing. Thanks to you we raised over $30,000 that will be spent to support our College Scholarship Program. For a list of this year's scholarship winners, and the sponsors who support our program, click here .

Mass. Revenues Up: Tax revenues in Massachusetts were unexpectedly strong during the first half of the year. Revenues were up 10.6% from a year earlier. This could be another indication that Massachusetts will move out of recession more quickly than other parts of the country.

Jobs: It's the big issue across the country, and Massachusetts is no exception. The construction industry here continues to have high unemployment, although a number of large projects in the coming year are expected to put thousands back to work. Overall, Mass. unemployment has been holding steady at 7.6% -- well below the national average of 9.2%. 10,000 new jobs were added in the state in May.

Infrastructure: Given the high national unemployment rate, expect Obama to start advocating forcefully for an "Infrastructure Bank" that would spend up to $30 billion on public construction projects. The president's proposal is opposed by House Republicans, who believe the states should institute their own programs.

Food Stamps: The US Agriculture Department released statistics showing that the number of Americans receiving food stamps rose to a record 45.75 million in May. That means that 1 in 7 Americans is now on food stamps. The number of people nationwide receiving stamps has increased 12% in the past year.

Rich: The New York Times reports that even though millions are still unemployed and using food stamps, the sale of luxury goods is going through the roof. Mercedes Benz sold more cars in the United States last month than it had in any July in five years. The luxury category of goods has posted 10 straight months of sales increases. Sales last month were up nearly 12%. The category includes $2,500 boots, $1,650 facial crème, and $12,000 Gucci coats.

Wal-Mart: The Globe and the Boston Business Journal both report that Wal-Mart is looking to set up several new stores in the Boston area. The chain is looking at several sites in Roxbury, as well as a possible "Market" grocery store in Somerville. They are also looking at a site along Rt. 1 in Saugus.

Clean Water: The two-decade long effort to clean up Boston Harbor recently took a big step forward. A tank 17 feet in diameter and 2.1 miles long has been constructed under South Boston, and will hold wastewater during times of heavy rains. Otherwise the waste water would be dumped into the harbor. The tank holds 19 million gallons of water that can be pumped to the Deer Island wastewater plant for cleansing when the heavy rains cease.

Storm vs. Sanitary: The reason Boston had to build a huge holding tank is because our region has what is known as a "combined" sewer system. "Sanitary sewer water" (from sinks and toilets) flows into the same sewer pipes as storm water from the streets. When there is a very heavy rain, the underground pipes fill up, and the Deer Island Plant can't keep up. If the sewer systems were constructed today, they would be separated, since "storm water" is much easier to clean than "sanitary sewer water."

Sea Water: The Boston Business Journal reports that the $3 billion South Boston Seaport Square project will be built taking into consideration the potential of rising sea levels. A 2009 report from the World Wildlife Fund and Allianz Insurance said that rising sea levels could put $462.6 billion in Boston assets at risk by 2050. Officials at the Boston Redevelopment Authority are strongly encouraging developers to build in a way that would prevent harm from rising sea levels. For instance, the new Spaulding Rehabilitation Hospital on the Charlestown waterfront is being built an additional foot off the ground. Its electrical systems will be on the roof -- not in the basement.

Budget Cuts: In some cities and towns budget cuts are resulting in building (and plumbing) inspectors not being available to inspect construction. In June the town of Newbury stopped issuing building permits for several weeks, because they could not afford to pay inspectors.

Germy Faucets? A study at Johns Hopkins Hospital in Baltimore suggests that hands-free faucets harbor more germs than manual faucets. According to Contractor magazine, researchers found bacteria in half the electronic faucets they tested. Only 15% of manual faucets contained germs. There is speculation that the difference has to do with the number of components contained in automatic faucets; they allow more surfaces where bacteria can grow. Faucet manufacturers are not pleased with this news, and met in June with ASPE (American Society of Plumbing Engineers) to review the issue.

Interesting Plumbing Products: Here's a useful one that we're seeing more of: Floodstop. An electronic sensor on the floor by a washing machine or water heater detects moisture, then sends a signal to a ball valve that shuts off the water supply. Hundreds of thousands have been sold, and engineers specify it for many new projects. Plumbing service companies are stocking Floodstop in their trucks, and are selling lots of them.

National Statistics: In the mechanical trades, there has been good and bad news nationally. Contractor reports that construction of manufacturing facilities will drop 19% this year. But energy and government construction is strong. Water and wastewater construction is up 3%. The general problem: still not enough private money in the market.

Continuing Education: Plumbers are now subject to continuing education requirements -- currently 6 hours each and every year. The Plumbing Board is changing the rule so that a plumber need not do training every year -- but still must make sure to do 12 hours every two years. In the first round of continuing education, many plumbers failed to meet the new requirements. They are being fined, and required to do even more training.

Boston Marathoners: Their average age is 41 -- pretty high.

Boston Accent: There is now a local coaching service that helps people eliminate their Boston accents. Boston Casting of Allston enrolls actors, as well as locals who think losing the old-towne accent will make them sound smah-teh.