The 2008 Greater Boston Housing Report Card attempts to set a new baseline for understanding the impact of housing on the regional economy and the lives of area residents, and also capture the 2008 market, in which housing prices are falling at frightening speed—yet remain out of reach for far too many area residents.
The Greater Boston Housing Report Card 2008
From 1995 through 2005, housing prices and rents in Greater Boston soared, making it one of the most expensive metro areas in the nation. Because of escalating housing costs, more than a third of the region’s homeowners were paying more than 30 percent of their income for shelter and more than half of all renters were similarly challenged in their ability to afford housing and have enough of their incomes left over to pay for other necessities. Without substantial rental subsidies, low-income households were not able to afford housing at all and research revealed that Greater Boston’s housing costs were a major factor in the region’s slow growth in employment and in the region’s loss of young working families. In its well-known report, A New Paradigm for Housing in Greater Boston, first released in September 2000, the Center for Urban and Regional Policy noted that escalating housing prices and rents created a “moral obligation” to provide affordable housing for the region’s households and an “economic necessity” to assure the region’s continued prosperity.
Now we face a housing paradox in Greater Boston. Home prices are still too high . . . but they are falling too fast. This combination leaves much of the affordability problem unresolved at the same time that an explosion in subprime mortgage lending and falling prices have combined to cause a dramatic increase in home foreclosures and the possibility of a downward price cycle in many neighborhoods. This could lead to abandonment, vandalism, and community disintegration. Solving the housing paradox will require a sophisticated set of public policies.
This report combines elements of the original New Paradigm study with the annual report cards CURP has issued along with The Boston Foundation and the Citizens’ Housing and Planning Association for each of the past five years. Like the New Paradigm study, this report tries to explain the nature of the housing problem facing Greater Boston and provides estimates of how much additional housing must be produced to meet our housing needs. It also delves into what caused the current vicious circle of rising foreclosures and falling prices.
Yet like the annual housing report cards, it also tracks trends in the overall regional economy, in housing production, in prices and rents, in affordability, and in federal, state, and local housing policies.
- Housing became substantially less affordable between 2000 and 2005.
- House prices fell substantially from the end of 2005 to 2008.
- Home prices and rents are still unaffordable for many.
- We are likely near the end of the housing meltdown nationwide.
- The region needs to stabilize prices by reducing foreclosures and creating more affordable housing for young families.