Greater Boston Housing Report Cards
Our latest report marks the 10th anniversary of the annual Greater Boston Housing Report Card. Each year since 2002, we have probed Greater Boston’s housing landscape, keeping tabs on housing construction, home prices and rents. We have analyzed the relationship between the region’s economy, demography and housing, and we have kept track of federal, state and local government policies that affect the region’s housing market. Year by year, we have reported on this vital sector of the region’s economy, based on the belief that providing decent housing for all at prices they can afford is not only a moral responsibility, but an economic necessity if the region is to retain its talent pool.
This 2012 Greater Boston Housing Report Card is dedicated to understanding a new period in the region’s housing market and what it will take to meet the goal of affordable housing for all who need it. There are now even stronger signs than we saw in 2010 that the housing market is recovering. We may be at a new point in the housing cycle where housing demand—both in the homeowner market and in the rental market—will begin once again to outstrip supply, particularly given the lack of production since 2005, falling vacancy rates, and a stronger economy that is attracting new workers to the region.
But the changes we discern in demographics and consumer behavior require a new housing paradigm because the challenge we face is more than just the sheer amount of housing production. Fundamental structural changes in the age composition of the region’s population; in the income, wealth, and debt distribution of the region’s households; and in generational differences in consumer behavior will almost certainly alter the types of housing we will need over the next decade, as well as the places within the region where that housing will need to be located. If developers, communities, and state and local government respond proactively to these underlying changes, we will be in a better position to fulfill the moral responsibility of providing affordable housing to all who need it. Moreover, we will better meet the economic necessity of lowering the housing cost hurdles that make it difficult for young households to remain in Greater Boston, while simultaneously lowering the cost barrier to those who would like the opportunity to move here.
Before considering what this new paradigm would entail, it is helpful to examine what has happened in the region’s housing market over the past year. We see signs of recovery in the housing market along all of the standard measures we have tracked—sales, prices, rents, permits and foreclosures. Whether this is leading to a return to the normal patterns that have prevailed in past decades or, alternatively, whether it signals a major transformation of the Greater Boston housing market is the big question this time around.
The 2011 Greater Boston Housing Report Card: Housing’s Role in the Ongoing Economic Crisis focused on the larger economic context and how housing continues to play a major role nationally.
Our area’s housing market has not sustained anything close to the damage experienced in other states and regions throughout the country. In addition, Massachusetts has a stronger economy in general than many other states. However, one of the major conclusions of this year’s report card is that Massachusetts and Greater Boston are not immune to the forces that are negatively affecting the nation’s economy as a whole. In fact, the leading economists we rely on for economic forecasts are concerned that we are in for some rough times ahead.
The analysis in the report also concludes that until we solve the housing crisis, the larger economic crisis impacting our state, region and country will not begin to abate That is, in fact, the primary conclusion of this year’s report card—and clearly it is the indicator we should follow as we move forward.
The 2010 Greater Boston Housing Report Card: Taking Stock in an Uncertain Time continues our prior focus on the foreclosure crisis. In addition, we examined the dynamics that have kept rental prices near all-time highs in spite of the economic recession. The foreclosure crisis, hesitation among potential home-buyers, and an influx of additional students to the area, particularly graduate students, have all increased demand for rental housing. As a result vacancy rates have remained below 6%, thus keeping rental prices high.
Greater Boston Housing Report Card 2009
The Greater Boston Housing Report Card 2009: Positioning Boston in a Post-Crisis World, moved beyond the content of our previous publications and focused additional attention on the foreclosure crisis and its impact on housing affordability in the Commonwealth.
Our research shows that while home prices have fallen dramatically in Greater Boston, competitive metropolitan areas have faced even steeper declines in home values. As a result, Boston has become less affordable, relative to other cities, for both homeowners and renters. Therefore, although housing prices have declined, the housing affordability issues facing Greater Boston have been exacerbated over the last year.
There is, however, good news for the region as well. It appears as though the national and regional economic recession has neared an end and there are some indications that home prices in Greater Boston have bottomed out.
Background on Our Work in Housing
Since its founding in 1999, the Dukakis Center has been deeply involved in research, evaluation, and policy projects related to affordable housing as well as the impact of housing on economic development. Its first major report, “A New Paradigm for Housing in Greater Boston”, set the stage for this work, laying out in detail both the moral responsibility and the economic necessity of expanding the supply of affordable housing in the region.
This seminal research reviewed the trend in housing prices and rents, estimated the gap between housing supply and demand, focused attention on the role of zoning and local building codes in restricting development, and suggested a range of policies to augment supply to make housing more affordable to meet a goal of increasing housing production by 38,000 additional units by 2007.
With funding from The Boston Foundation and the Citizens Housing and Planning Association (CHAPA), the Center has produced a lengthy, fact-filled Greater Boston Housing Report Card covering current market conditions, housing production levels in the region, rents, housing prices, and public spending on housing. This report and the annual conference used to release it has kept the housing issue in the public spotlight leading to tangible action to meet the housing goals first set out in the New Paradigm report.
The Center’s research in housing led in 2005 to the creation of the Commonwealth Housing Task Force (CHTF), a broad coalition of business and civic leaders, housing advocates, and developers. With the support of this coalition, the Dukakis Center was charged with producing model legislation that could meet the housing needs of the Commonwealth. Based on the housing policy developed at the Center, Massachusetts enacted two new laws, Chapter 40R and Chapter 40S, making it possible for municipalities in the state to garner state funds in return for re-zoning land for transit-oriented, affordable “smart growth” housing construction. The Dukakis Center continues to work with the Commonwealth Housing Task Force, the state’s Executive Office of Housing and Economic Development, and the state legislature to provide timely reports on housing progress in the state.
At the local level, the Center created the World Class Housing Collaborative, bringing together faculty and staff from Northeastern with community leaders to consider ways of improving housing conditions in local neighborhoods. It conducted a Developers’ Clinic to provide training for individuals who wish to consider producing small housing projects in their communities.
Other housing research undertaken by the Dukakis Center includes a series of analyses of affordable housing needs in local communities (Weston, Malden, Everett, and Medford), an extensive evaluation of the Maverick Gardens HOPE VI project in East Boston, an evaluation of the Home Funders project established by philanthropic organizations in Greater Boston, and a study of university-community partnerships devoted to housing production.
Housing Research Team:
- Barry Bluestone, Team Leader
- Chase Billingham
- Tim Davis
- Anna Gartsman
- Eleanor White
- Ted Carmen
- Liz Williams