Despite reform efforts, inventory and price pressures continue to drag on housing market, 2024 Housing Report Card finds
Research suggests tapping into vacant public space to spark new housing opportunities but finds some communities have spent millions in development-oriented funds to halt projects
November 12, 2024
Boston – Greater Boston’s well-publicized housing challenges continue, even as communities work to change zoning rules to comply with the state’s new MBTA Communities requirements, according to the 2024 Greater Boston Housing Report Card. The Report Card, released today at the Boston Foundation, notes that a lack of new construction, high interest rates, and changing demographics continue to slow sales and increase costs. However, the report sees promise in new policy initiatives. In a special section authored by a team from the Boston University Initiative on Cities, the report highlights the opportunity presented by freeing up publicly owned, vacant or underused land for affordable development – and the obstacles that are keeping it from happening.
“The forces slowing the market are all too familiar for people working in the housing sector, and for anyone seeking an affordable home to buy or rent,” said M. Lee Pelton, President and CEO of the Boston Foundation. “But there are signs of promise – both signs that the price increases are slowing and a new generation of creative solutions through zoning, design, land use, and support for homebuyers that could unlock critically needed construction to house thousands of people across the region.”
The report card comprises two parts: a look at the current state of the market by Luc Schuster, Lucas Munson, Peter Ciurczak and Aja Kennedy at Boston Indicators, and a special report that explores the potential of using public land to develop affordable housing across Greater Boston by Katherine Levine Einstein, Maxwell Palmer and Danielle Mulligan of the Boston University Initiative on Cities.
Core Metrics: Trapped in a cycle of low supply, higher prices
The core metrics section of the report updates several recurring themes from past reports: housing prices continue to rise, exacerbated by high interest rates and an aging population of smaller households. One less-recognized consequence is that older homeowners can’t find homes into which they can downsize, further constraining the inventory of larger homes for families.
“Our housing story is still one of high prices and supply shortages – often building on each other,” said Luc Schuster, Executive Director of Boston Indicators. “First-time homebuyers can’t find affordable homes, growing families face challenges finding larger houses, and empty nesters are often challenged to find properties where they can downsize. Each group finds limited options, which means they cannot move and free up homes that are highly sought by other groups. In the end, prices rise as inventory stagnates.”
The continuing lack of new housing keeps Greater Boston’s rental and homeowner vacancy rates among the lowest in the country. While the 15 communities of the Metro Mayors’ Coalition have added more than 60,000 units of new housing since 2015, they remain well behind the pace to meet the goal of 185,000 new units by 2030. It’s also worth noting that 86 percent of the new housing built in the Coalition cities has been built in just six communities: Boston, Revere, Quincy, Cambridge, Everett, and Somerville.
The result of high prices and mortgage rates has been a startling rise in the annual income a potential homebuyer needs to afford their monthly payments. Since 2021, the annual income required to afford payments on a “mid-tier” home in Greater Boston has risen from just over $140,000 to nearly $223,000—an increase of almost 60 percent.
If there is “good news,” it is that average rent increases are slowing, even as the estimated income needed to afford a two-bedroom apartment in Greater Boston has risen to just under $111,000. Half of all renters and nearly a quarter of homeowners in Greater Boston are “cost-burdened,” meaning they spend over 30 percent of their incomes on housing. Notably, Black and Latino renters and owners remain more likely to be cost-burdened than Asian and White homeowners.
The report also explores a major tool for addressing cost burdens: subsidized housing. While metro core and regional urban centers—led by Boston, Lawrence, Chelsea, and Cambridge—provide the largest share of subsidized housing, Greater Boston suburbs not only provide fewer units but are also more likely to restrict access to seniors.
The remainder of the core metrics section looks at issues of housing instability: evictions, foreclosures, and homelessness. Despite the pressure on the market, Greater Boston and Massachusetts communities score relatively well in the number of eviction and foreclosure filings they see. However, homelessness remains a major concern. In addition to the sharp uptick in migrant families seeking emergency housing that has received significant media attention, the city and region have seen a rise in homeless individuals, with the highest rates among Black and Latino residents. Despite this, research finds more than 90 percent of the homeless population is able to access shelter – mainly due to the state’s Right to Shelter law.
Special Topic: The Use of Public Land to Build – and Block – Housing
With housing and spaces for development in short supply, the special topic of this year’s Greater Boston Housing Report Card explores the possibility of using publicly owned land to develop affordable housing across the Boston region. Researchers Katherine Levine Einstein, Maxwell Palmer, and Danielle Mulligan from the Boston University Initiative on Cities gathered data, interviews, and other research for this section. Data show almost one-fourth of land in Greater Boston is publicly owned, and much of this land is both vacant and not set aside for conservation. If just 5 percent of the state and municipally owned, vacant, non-conservation land could be redeveloped into housing at a density of 15 units per acre, the region could obtain more than 85,000 units of housing.
The research team also identified two major obstacles to accessing that land. First, the combination of public procurement laws and the housing permitting process makes the redevelopment of public land prohibitive in many cases. Beyond that, public opposition to development often uses the system to prevent development – in extreme cases, using millions of dollars in public funds to stop housing development. Using a database of public property, the Registry of Deeds, and newspaper archives, The research team identified 13 instances in which local governments purchased land expressly to stop a housing development since 2010. These purchases totaled over $50 million in public funds.
“Using a small percentage of municipal land holdings to build new housing represents a major opportunity to address our regional housing crisis,” said Katherine Levine Einstein of the BU Initiative on Cities. “But as we have seen in other issues, such as zoning reform, the regulatory process makes it harder and more expensive to build. Streamlining processes and ensuring public dollars intended for the development and preservation of housing cannot be weaponized against housing would be major steps in the right direction.”
The full report, several interactive data charts, and a map tracking the implementation of MBTA Communities zoning plans can be found on the report page at tbf.org/gbhrc2024.