Transcript The Greater Boston Housing Report Card 2002

The Greater Boston
Housing Challenge
Barry Bluestone
Center for Urban and Regional Policy
Northeastern University
WBZ
“Attaining the American Dream”
October 27, 2005
How is Greater Boston doing …
economically?
 By the end of 2004, employment in
Greater Boston was still down by more
than 160,000 from its pre-recession
peak
 Real median household income dropped
by 3.5% between 2000 and 2004
Employment Trend
United States
145
141.4
139.3
137.7
136.9136.9136.5
in Millions
140
135
130
125
120
133.4
131.5
129.6
126.7
124.9
123.1
120.2
118.8
117.7118.4
115
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05
Employment Trend
Massachusetts
3371
3400
3279
3300
in Thousands
3200
3200
3151
3165
3190
2994
3000
2800
3211
3083
3100 3044
2900
3270
2950
2875
2869
2795
2815
2700
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05
U.S. vs. Massachusetts
Employment Growth
Source: Bureau of Labor Statistics, Payroll Employment
4.0
% Change Since Year Earlier
3.0
2.0
1.0
0.0
-1.0
-2.0
-3.0
-4.0
Jan-99
Jan-00
Jan-01
Jan-02
U.S.
Jan-03
Massachusetts
Jan-04
Jan-05
Greater Boston MSA
Real Median Household Income
1969-1999 ($2004)
$65,000
$60,886
$61,796
$60,000
$55,000
$50,000
$47,371
$45,496
$45,000
$40,000
1969
1979
1989
1999
Greater Boston
Real Median Household Income
($2004)
$64,000
$63,546
$63,496
$63,500
$63,000
in $Dollars
$62,500
$62,000
$61,333
$61,500
$61,000
$60,784
$60,466
$60,500
$60,000
$59,500
$59,000
$58,500
2000
2001
2002
2003
2004
How do the demographics look?
 We are losing population to outmigration
 The largest net losses in population
were in the young prime age cohorts
Greater Boston Population
2000-2004
3350
3310
3311
3304
3300
3296
in Thousands
3275
3250
3200
3150
3100
2000
2001
2002
2003
2004
Massachusetts
Net Migration 2000-2004
50,000
32,268
32,244
31,555
31,535
30,000
10,000
-10,000
-14,244
-30,000
-28,074
-50,000
-47,776
-58,910
-70,000
2000-01
2001-02
2002-03
2003-04
Figure 2.3
Population Change by Age Cohort Boston PMSA
2001-2003
15.0%
10.0%
5.0%
-10.0%
-15.0%
Change 2001-2003
65 years
+
55 to 64
years
35 to 54
years
25 to 34
years
20 to 24
years
5 to 19
years
-5.0%
Under 5
years
0.0%
Where did they go?
Net Migration* Betweeen Massachusetts and Competitor States
1990-2002
WA
ME
MT
ND
OR
MI
MN
VT
ID
SD
WI
MI
WY
PA
IA
OH
UT
IL
CA
MD DE
IN
WV
CO
KS
VA
MO
KY
NC
TN
OK
AZ
SC
AR
NM
MS
State
Florida
New Hampshire
California
Arizona
North Carolina
Washington
NJ
NE
NV
Net Migration from State
*Thicker line represents more migration
-99,082
-78,201
-23,978
-11,033
-8,983
-4,516
TX
AL
GA
LA
FL
NH
MA
CT RI
NY
What’s doing with the Cost of
Living?
 According to a new measure of living costs, Greater
Boston has the highest cost of living of any metro area in
the United States
 A family of four needs $64,656 to pay for the costs of
housing, transportation, day care, health care, and other
basic necessities.
 This is more than $3,000 higher than in Washington,
D.C; $6,000 higher than in New York City; and $7.000
more than in San Francisco
 Monthly housing costs are 40% higher than in Austin,
Chicago, and Miami and 63% higher than in RaleighDurham-Chapel Hill
Figure 2.1
Total Annual Family Budget for a Family of Four
Boston, MA vs. Competitor Regions
$70,000
$64,656
$65,000
$61,440
$58,656
$57,624
$54,948
$55,000
$50,000
$47,520
$44,124
$45,000
$43,704
$43,584
$43,452
$40,000
$35,000
$30,000
$25,000
am
-C
ha
-D
ur h
igh
Ra
le
Region
L
Mi
am
i, F
,T
X
tin
Au
s
IL
o,
ag
Ch
ic
pe
lH
i ll,
NC
r, C
O
ve
De
n
MN
po
Mi
nn
ea
Sa
n
Fra
n
cis
co
lis,
,C
A
NY
Cit
y,
Yo
rk
Ne
w
Wa
s
hin
gto
to n
n,
,M
DC
A
$20,000
Bo
s
Total Annual Family Budget
$60,000
A Tale of Two Cities
Basic Budget
2 Parents, 2 Children
Boston
Monthly Housing
Monthly Food
Monthly Child Care
Monthly Transportation
Monthly Health Care
Monthly Other Necessity
Monthly Taxes
Monthly Total
Annual Total
Raleigh-Durham-Chapel
Hill
$1,266
$ 587
$1,298
$ 321
$ 592
$ 500
$ 824
$5,388
$64,656
Monthly Housing
Monthly Food
Monthly Child Care
Monthly Transportation
Monthly Health Care
Monthly Other Necessity
Monthly Taxes
Monthly Total
Annual Total
$ 779
$ 587
$ 866
$ 358
$ 368
$ 369
$ 350
$3,677
$44,124
Rents and Prices
 With a vacancy rate of 6%, average effective rents
remained relatively stable in 2004 (February 2005) after
declining from peak rents in 2000
 $1,748 for Class A Apartments (-5.1% since
October 2002)
 $1,187 for Class B Apartments (-3.7% since
October 2002)
 $967 for Class C Apartments
(-4.0% since
October 2002)
 From May 2004 to February 2005, rents have remained
largely unchanged
Source: Forbes Magazine
Y
o
B rk
o
S Ho s to
an n n
Fr olu
a
N nc lu
or is
t h co
er
N S nN
a s ta J
sa mf
u o
Lo - Su rd
s f fo
O
A
ng lk
ra
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S ele
a
e
C nJ s
ou
o
nt se
S y,
an C
A
D
W
i
e
as
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ng
l
t o a nd
R
n
iv
C ,D
er
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si
de Ph ntr C.
-S ila al
an de NJ
lp
B
h
er
na ia
B din
al o
t im
C ore
hi
ca
go
S
ac Mia
ra m
m i
en
to
N
ew
$2,000
$1,632
$1,677
$1,686
$1,745
$1,825
$1,579
$1,241
$1,316
$1,325
$1,439
$1,466
$1,517
$1,018
$1,043
$1,111
$500
$0
$987
$1,012
$1,000
$1,526
$1,500
$1,155
$2,500
$1,953
2005
Class A Apartment Rents
Affordability Problem Persists
for Renters in Greater Boston
 The number of cost burdened renters in 2003 increased to
nearly 50% of all renter households -- from 43.3% in
2002
 The number of severely cost burdened renter households
(those paying over 50% of income for rent) swelled to
nearly 25% -- from 21.5% in 2002
 Despite softening in area rents over past 2 years, rent
levels remain high throughout most of the region
 Although there were 34,000 fewer renter households in
the Boston PMSA than in 2000, 19,000 more faced severe
cost burdens
Median Single Family Home Price 1987-2004
$400
$376
$343
$350
$313
(in $thousands)
$300
$273
$245
$250
$210
$200
$186
$165 $168 $169
$150
$159
$152
$154
$146 $148 $150
$161
$168
$100
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Owner Occupied Housing
Affordability

By 2004, households earning the median income of their
city or town could afford its median priced single family
home in only 27 of the 161 towns and cities in the
region, down from 77 in 2002 and 148 in 1998.

In only 1 town in Greater Boston could first time
homebuyers earnings only 80% of municipal median
income afford a home that sold for 80% of the median
priced house … down from 17 in 2002 and 116 in 1998.
# of Communities with Median Single Family Sales Price
1998
2000
2001
2002
2003
2004
4
0
0
0
0
0
$100,000 - $199,999
82
41
14
5
0
0
$200,000 - $299,999
50
68
74
62
43
19
$300,000 - $399,999
16
32
42
52
61
74
$400,000 - $499,999
4
10
12
22
30
33
$500,000 - $999,999
4
9
18
19
25
33
$1,000,000 and Above
0
0
0
0
1
1
Below $100,000
% of Communities with Median Single Family Sales Price
1998
2000
2001
2002
2003
2004
Below $300,000
85.0%
68.1%
55.0%
41.9%
26.9%
11.9%
$300,000 - $499,999
12.5%
26.3%
33.8%
46.3%
56.9%
66.9%
$500,000 and Above
2.5%
5.6%
11.3%
11.9%
16.3%
21.3%
Is it any wonder then ….
 That we are losing young people who
can’t afford Greater Boston’s cost of
living
 That we are losing jobs because firms
have difficulty in finding sufficient
labor for their enterprises at
nationally competitive wage rates
New Housing Production –
Some Good News
 Building permit issuance increased by 12% in 2004 to
13,556 after increasing by 22% in 2003.
 For the first time since 1998, permits for single family
units increased ... to 7,000 in 2004 from 6,020 in 2003
 BUT, total permits remain well below peak years of the
1970s and 1980s when more than 20,000 units/year
were permitted
 And, single units permits are still well below the number
issued each year from 1998 through 2000.
Figure 3.1
Housing Units Permitted
Boston PMSA
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
5+ units
1-4 units
04
02
00
98
96
94
92
90
88
86
84
82
80
78
76
74
72
70
68
0
Year
Total Units
Permitted
1998
10,846
8,639
79.70%
574
1,633
1999
10,662
7,775
72.90%
746
2,141
2000
10,342
7,102
68.70%
701
2,539
2001
9,701
6,313
65.10%
686
2,702
2002
9,520
6,408
67.30%
764
2,348
2003
12,121
6,020
49.70%
1,093
5,003
7,000
51.60%
994
5,562
2004 13,556
Units in
Single
Family
Structures
Single
Family
Units as %
of Total
Units in 2-4
Unit
Structures
Units in 5+
Unit
Structures
Table 5.1
Units Built Under Chapter 40B Comprehensive Permits
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
2001
2002
2003
2004
Total Units in Developments Built Under 40B Comp Permits
Units that Count on Subsidized Housing Inventory
Estimated # of Units Restricted to Low Income Occupancy
Some Good News … but
Housing Production in the Boston PMSA vs.
Housing Goals in the New Paradigm Report …
Category
Market Rate
Paradigm
Target
Production
2002
2003
Change
2002-03
2004
Change
2003-04
9,860
5,952
7,525
26%
9,259
+23%
60%
76%
1,114
1,514
26%
35%
951
500
63%
33%
8,017
9,539
51%
61%
% of Category
Goal Met
Subsidized
New
Construction
4,300
% of Category
Goal Met
Student
Housing
1,500
% of Category
Goal Met
Total 3
Categories
% of Overall
Goal Met
15,660
94%
36%
1,678
+11%
39%
-47%
367
-27%
24%
20%
11,304
72%
+19%
Conclusion
 Greater Boston now has the highest living costs of any
metro area in the United States …. led by high housing
costs (as well as by high medical and day care costs)
 It is not surprising then that Greater Boston and
Massachusetts are losing population, especially among
young working families, to other regions of the country
 Housing production has improved in Greater Boston over
the past three years, but total production in 2004 was
still at only 72 percent of the level needed to slow
housing price appreciation to normal levels
 We still need to encourage more housing production as a
“moral imperative” and as an “economic necessity”
5 Solutions for Housing
Affordability
1. Zoning for Housing Affordability
 Comprehensive Permit Statute (Ch. 40B)
40% of all new production
80% of all new affordable housing in suburbs
 Smart Growth Housing Production (Ch. 40R)
Upfront bonus payments
School costs reimbursements
 Inclusionary Zoning (10-15% of market rate
developments)
2. Increased State Investments
 Affordable Housing Trust Fund for new
production
 Preservation of Existing Subsidized Housing
(public housing and expiring use)
3. Business Community Involvement
 Investments in state tax credits (housing,
historic preservation, brownfields)
 Employer assisted housing to increase
homeownership
 Support for local housing proposals
4. Compact Between State and
Municipalities
 Increased support for community planning
 Technical assistance for housing
development (Community Preservation Act)
5. Greater Public Awareness and
Education
Home@Last Campaign:
 Educate community members about the
benefits and importance of affordable
housing
 Video, posters, brochures, media and
advertisements
 Community presentations to civic groups,
municipal officials, and others
Conclusion: Ingredients for Success
1. Partnership between the public and private
sector
2. Leadership from the Governor and
Legislature
3. Greater local support and involvement