I’ll have more to say about housing as an investment (hint: in quite a few cases, it’s incredibly bad), but one thing to keep in mind is that people don’t always protect their investments as well as they should. Last week, there was a massive, nine-alarm fire, in a Boston apartment building–fortunately no one was seriously injured, in part because many people were at work. But this is what shocked me–no fire sprinklers in a ten story building (italics mine):
The lack of sprinklers was of particular concern to fire officials. The building, formerly known as the Cambridge House and built as a residential hotel in 1895, was grandfathered in from building fire codes that went into effect 25 years ago. Condominium units in such buildings, even if they were sold after the law went into effect, are exempt, said Steve MacDonald, a Fire Department spokesman.
Richard Steffenghagen, who lives on the 10th floor, said residents discussed the idea of installing sprinklers more than 20 years ago but decided not to after learning that they were exempt and that it would be costly.
“The discussions went on for some time, but it was a matter of spending many hundreds of thousands of dollars,” Steffenghagen said.
This is in building with around one hundred units, where a one-bedroom apartment starts at $250,000. Even if it cost $10,000 per unit, that can’t that big an increase in the building maintenance fee if spread out over a few years. Certainly the condo association could take out a loan–suitable collateral is pretty obvious.
I point this out, not to pile on: this is an awful thing, and was very nearly a tragedy. But I would want to protect my investment. Yet people have a tendency to take the easy way out, especially when confronted with the possibility of a rare event that evokes negative emotions. But this isn’t just about money.
More importantly, safety matters. The Boston Fire Department claims that the smoke was so dense that if this fire had happened at night, lives would have been lost (fire sprinklers help clear the smoke). Worse, these old building, as well as new, green ones, use the stairwells as part of a convection system to circulate the air. Which is good, unless the air is full of flames and smoke.
If nothing else, Boston needs to remove the grandfather clause now.