Housing Report
May 2002, by the Alliance of Boston Neighborhoods
Fact sheet prepared for ABN Town Meetings, Spring 2002


How much housing do we have, and what is driving housing demand?

Very little housing has been built in Boston and the metro region over the last 20 years, while demand has grown. Affluent young professionals and "empty-nesters," drawn by jobs and urban life style, have bid up housing prices. Trends toward smaller households, especially in the city, increase demand for housing units, and the expanded enrollments of non-commuting students in Boston colleges has resulted in higher student occupancy of neighborhood housing. Immigration is increasing the demand for inexpensive housing

Housing vs Job Growth in Boston:

1980s: 100,000 jobs
10,000 homes
1990s: 123,500 jobs (+25%),
3,500 homes (+1.5%)

Falling household size in Boston:

1950: 221,500 units
pop. 800,000
1990: 251,000 units
pop. 579,000
2000: 252,000 units
pop. 589,000

WHO CAN AFFORD TO LIVE HERE?

Boston's median home price: $264,000 (January 2002)

Average home construction cost: $225,000.

Median home prices rose faster than median incomes, creating an "affordability gap." In l970, housing was affordable with only a single earner. By l990, there was an income gap of $20,000, and by 2000, a gap of $60,000.

If an affordable home price is 2.5 times income, a median-priced home in Boston ($264,000) requires $105,600, or $50.75 in household hourly earnings. The $31,000 median income earner can spend $77,500.

In l999, Boston's elementary school teachers (median income $46,500) were $12,000 short of the $58,500 needed for the then median-priced house ($178,000); a police officer, at $39,870, was $19,000 short; a nurse, at $35,500, was $23,000 short.

Rents have also gone up, and the number of rental units has fallen, due to condominium conversions. A Boston household must earn $67,580 to afford a two-bedroom apartment at the 2001 citywide median rent of $1,700, paying 30% of income. Half (71,000) of Boston renters pay more than 30% of income for rent, and 25% spend more than 50% of income (extreme hardship).


Boston's median home prices have been rising:
+30% in l992-1996:
+14% in 1998
+12% in l999
+27% in 2000
+14% in 2001 to $264,000


The "Affordability Gap":
From l995 to l999, greater Boston median home prices rose 35%, while incomes rose 25%.


"Affordable" for whom?
Boston's 10% affordable set-aside: targeted to people earning $40,000 to $70,000
City of Boston median income: $31,000
(1998 American Housing Survey)

Boston has over:

  • 6,000 now homeless
  • 26,000 at risk
  • 14,000 wait list for 15,000 Boston Housing Authority units

Since rent control ended in l995, Boston lost 18,000 affordable units.

Unusable Section 8 vouchers tripled from l996 to 2000 in Mass.

WHAT'S HAPPENING AT THE BOTTOM OF THE LADDER?

Boston has 20% of the region's total housing, but 40% of the subsidized housing.

Almost 20% of Boston's housing (45,000 units) is subsidized, but it is unevenly distributed:

  • South End, Roxbury: nearly 40%
  • Back Bay, Beacon Hill, West Roxbury: under 5%

During the l992-l999 boom, Boston Housing Court evictions rose from 5,000 yearly to 7,000.

In the state, about 5% of renters -- at least 50,000 -- were evicted yearly as rents rose; residential mortgage foreclosures were 4-5 times that of the 1980's. About 20,000 lost homes to foreclosure yearly in the early 90's, and 10,000 in recent years.

A recent City estimate: 37,500 units are needed for high-priority housing needs, mostly renters paying over 50% of income for housing.

If suburbs met their 10% affordable housing requirements, 37,300 affordable units would be added to the region.

WHY AREN'T WE BUILDING ENOUGH HOUSING?

Federal/State support for multi-family and subsidized housing has declined since the'80's.

Mass. CDC's contributed to only 540 units yearly for 30 years. City linkage contributed to only 320 units yearly for 15 years.

Zoning and community opposition are major constraints on housing. Boston and the suburbs often allow less development in new projects than in existing context.

The issues: parking space, traffic, school costs, property values, and general concern about "density."

More profitable and easily permitted commercial development has grown instead.

Mass. housing funding fell

  • $220 million in l990
  • $125 million in l999

-- although the budget grew

Mass. ranks 47th in housing permits per capita; over 50 communities have restrictive laws limiting new housing.

Commercial vs residential growth, l995 - 1997:

  • Boston --95% to 5%
  • Mass. -- 47% to 53%

HOW MUCH HOUSING DO WE NEED TO BUILD IN THE FUTURE?
Boston's "Leading the Way" plan: 7,500 new units -- 2,500 per year -- between 2001 and 2003 (2,100 low/moderate income, 4,300 market-rate, 1,100 BHA rehabs). City Progress Report: from July 2000 to December 2001, 4,686 units were permitted; 7,000 units are in the planning stages.

Per the 2001 Archdiocese/Northeastern study, Greater Boston must produce:

  • 36,000+ homes above current construction levels over next 5 years
  • 20,000+ dorm beds on college campuses