City devotees hunt for room to grow

Luke Peterson, 25, loves living in the city. So much so that he and his girlfriend, law student Wendy Savage, just decided to buy a $685,000 town house in South Boston with a two-car garage. A self-described pack rat, he wants more space -- he's tired of stowing his hockey bag in the closet with his regular clothes. And should he and his girlfriend decide to start a family, they'll have room.

''I've never considered the suburbs," said Peterson, a mortgage banker. ''It's not an option. I just really need to live in the city. I had to dog-sit for my aunt in Lexington. I was miserable. All I did was listen to the crickets."

Tim Pappas is banking that there are many young urbanites like Peterson. His company, Pappas Enterprises Inc., is about to start construction on First+First, a development of 22 town houses where Peterson plans to move. On the drawing board are three-bedroom, four-story homes designed for young families.

The Pappas project, harking back to the row houses found in Back Bay, Beacon Hill, and the South End, are designed for ''vertical living": bedrooms on top of living areas on top of parking. The taller, skinnier houses occupy smaller pieces of land than a ranch, thus holding down property costs. The houses will also be built in a largely industrial area where auto body shops are more common than green space.

For people like Peterson, new housing options in the city are few. At the end of 2004, the Boston Redevelopment Authority estimated that 1,756 market-rate condos were under construction by developers of large projects. But most of these condos are too small for families. Last year, 12 percent of the condos sold in the city's downtown neighborhoods had three or more bedrooms, according to Listing Information Network, or LINK, which tracks condo sales. The average 2004 selling price of a condo with three or more bedrooms in those neighborhoods was $859,437, according to LINK.

When it comes to newly built housing, ''people can't live in the city unless they're wealthy, or they have a subsidy," said Tom Meagher, president of Northeast Apartment Advisors, which tracks Greater Boston housing. ''It's the people in the middle who are being squeezed."

Between the 1950s and 1970s, the population in many Boston neighborhoods became younger, thanks to an influx of students and young professionals, said Harold Brown, chairman of the Hamilton Co. To meet this demand, Brown and other developers purchased buildings with large apartments and subdivided them into smaller ones.

Today young families looking to buy moderately priced housing have few options, Brown said.

''You can buy a three-decker and rent out two levels or you can move way out to the suburbs," he said.

Meredith Baumann, a spokeswoman for the Boston Redevelopment Authority, says the agency is supportive of the project, but cautions that the prices of First + First's town houses are out of reach for many young families. ''Right now, there's no other town house project of this scale being built by private developers," Baumann said. ''Given today's land costs, it may not be financially feasible to do projects of similar scale and density."

Finding affordable housing isn't a problem for just Boston and young families. Dakota Butterfield, a mother of three who works for a nonprofit group, has happily rented in Cambridge for many years. Now the family is thinking of moving to northern Vermont where Butterfield thinks they can buy a four-bedroom home for under $200,000.

''We're heartbroken about leaving," said Butterfield, 51. ''But we have to build some equity."

While families can buy fixer-uppers and some family housing is being developed with the help of government subsidies, little housing is being built in Boston for large middle-class families, developers said.

For private developers, ''the high costs of land dictates that you have two options: You either build high-density housing or you charge high prices," said Mark Leff, a senior vice president at Salem Five Bank and a vice president at the Home Builders Association of Massachusetts.

And at the same time that housing prices are rising, many young adults are still paying off student loans and struggling to save up a down payment for a home purchase, noted Tamara Draut, a program director at Demos, a New York research group, and the author of an upcoming book about young adults titled ''Strapped."

''Every other generation has dreamed of owning a house with a white picket fence," she said. ''At today's prices, all we can afford is the picket fence."

Still, Pappas says there is an affluent segment of young city-lovers who can afford to stay in the city. Many of his target customers bought a condo a few years ago, and thanks to a sharp rise in home values, they can sell those condos and trade up to something in his price range.

''You're 28 and you buy a loft," Pappas said. ''And now you're 32 and married, but you're not ready to give up on urban living and move to Dover or Quincy. People who want to live in the city with enough space for a family don't have many options."

So Pappas and Utile Inc., the project's architect, set out to create another option.

''The starting point was narrative story boards for the kind of people we envisioned living here," said Utile principal Tim Love. ''We have a script. We have a scenario. Here's a gay couple that needs a home office. Here's a couple with a new baby. Here's a couple with a 3-year-old and a new baby. What kind of a place do they need to live in? Where do you put the stroller? What's the easiest way to bring in the groceries? Where does the mailman leave the FedEx package?"

As a mortgage banker, Luke Peterson frequently tours residential projects in and around Boston. For him, a town house makes sense.

Peterson and his girlfriend currently rent an apartment for about $2,100 a month in a South Boston condo building.

''To buy the place I live in now probably would cost around $560,000," Peterson said.

The two-car garage at First+First was a big selling point. In Boston these days, he said, indoor parking spaces can go ''for $60,000 a pop."

As for the $685,000 price tag, Peterson said, ''Within Boston central, to get 1,600 square feet, you're going pay way more than that."

Aside from issues about price, First+First may face another challenge. As much as people love living in the city in their 20s, the pull of the suburbs becomes stronger as people begin to think about raising families. When they become parents, they want a house with a backyard in a community with a good school system.

Salon owner Jeremy Dellaria, 34, and his wife, a lawyer, thought about buying at First+First.

''I was enamored with it," he said. ''I like contemporary design. I like thinking that's outside the box."

But for the moment, they're taking a pass.

''Eventually we might go to the suburbs where they have a good public school system," he said. ''Maybe we'll go to Milton."

Chris Reidy can be reached at reidy@globe.com.