Why might an observer be sorry to see the houses on Bellingham Place become boarding houses?
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The houses have always represented a certain style of living and a certain "sensibility" that comes with "old money" and a lifestyle based on inherited money and grand living. As the money falls away and the people become poorer, the wealthy may have to change their lives. One evidence of such a change is that they have to do something more mundane to earn money since they no longer "have money." This idea that the rich have fallen on hard times - this would fit with Howells' idea of using realism in his writing - would make some people very sad.