By Thomas Grillo | Boston Business Journal | November 14, 2012
Greater Boston’s housing market will improve, but buyers and tenants may seek different types of housing, according to the Greater Boston Housing Report Card 2012 released Wednesday by the Boston Foundation.
The survey, by the Dukakis Center for Urban and Regional Policy at Northeastern University, estimates that the region’s developers may need to double or triple annual housing production to meet demand through 2020. But buyers are expected to seek smaller, more transit-oriented developments, as retirees seek to downsize and new buyers look for more affordable housing that suits their smaller households.
“Once again, in 2012, we see signs of recovery in the housing market along all of the standard measures we have tracked — rising home sales, low vacancy rates, recovering prices, high rents, growth in permits and a decline in foreclosures should set the stage for growth,” said Barry Bluestone, the study’s author in a statement. “Whether this is leading to a return to the normal patterns that have prevailed in past decades or whether it signals a major transformation of the Greater Boston housing market is the big question this time around.”
Under one scenario, the total number of new households in Metro Boston is expected to increase by 120,000 between 2010 and 2020, the survey said. With vacancy rates at historically low levels, that scenario estimates that the region will need to produce at least 12,000 new units of housing each year to accommodate growth. From 2005 to 2011, annual housing production has run at half that amount – an average of 6,000 units.
Under a second scenario, the difference is more striking. In a region with continued labor and employment growth, the region would need another 191,000 units by 2020, more than triple the recent rate of output, the report said. The mix of housing in this scenario shifts as well, to one favoring the construction of more multi-family housing units.
In both scenarios, half or more of the new housing units projected for the region would not be single-family homes – but multifamily housing. In current trends, 48 percent of new households would opt for housing in multi-unit condominium or apartment complexes. That rises to 53 percent in the more robust growth scenario.
The Boston Foundation report comes as the Patrick administration has set a goal of creating 10,000 new multi-family units annually. On Tuesday, Gov. Deval Patrick detailed the new Compact Neighborhoods program, designed to encourage and create well-planned housing that fulfills the demand for homes near jobs and transit.
The initiative promises to complement smart-growth programs by providing incentives to encourage residential development near the MBTA and town centers. The program will recognize communities planning for economic and housing growth, and will offer Chapter 40B relief and priority consideration in discretionary funding programs, such as the MassWorks Infrastructure Program, the governor said.