The Greater Boston Housing Challenge, B Bluestone

Tags: Subsidized Housing, Greater Boston, Regional Policy, Employment Trend, Unit Structures, Greater Boston Housing, Housing Units, median income, Class C Apartments October 2002, Median Single Family Sales Price, renter households, median household income, Greater Boston Housing Challenge Barry Bluestone Northeastern University Recommended Citation Bluestone, Business Community Involvement Investments, housing costs, Housing Affordability, Inclusionary Zoning, Affordable Housing Trust Fund, working families, Dukakis Center Presentations, Northeastern University, care costs, Massachusetts
Content: Dukakis Center Presentations
Northeastern University Kitty & Michael Dukakis Center for Urban and Regional Policy
October 27, 2005 The Greater Boston Housing Challenge Barry Bluestone Northeastern University
Recommended Citation Bluestone, Barry, "The Greater Boston Housing Challenge" (2005). Dukakis Center Presentations. Paper 30. This work is available OPEN ACCESS, hosted by Northeastern University.
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
in Millions
United States
145 140
141.4 139.3 136.9136.9136.5137.7
135 130 125
133.4 131.5 129.6 126.7 124.9 123.1
120.2 120 118.8117.7118.4
115 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05
Employment Trend
in Thousands
Massachusetts
3400
3371
3300 3200 3100 3044 3000
3279 3200 3151 3083 2994 2950
3270
3211
3190
3165
2900 2800
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
% Change Since Year Earlier
Employment growth Source: Bureau of Labor Statistics, Payroll Employment 4.0
3.0
2.0
1.0
0.0
-1.0
-2.0
-3.0
-4.0 Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
U.S. Massachusetts
Jan-05
Greater Boston MSA Real Median Household Income 1969-1999 ($2004)
$65,000 $60,000
$60,886
$61,796
$55,000
$50,000 $45,000
$45,496
$47,371
$40,000
1969
1979
1989
1999
Greater Boston Real Median Household Income ($2004)
in $Dollars
$64,000 $63,500 $63,000 $62,500 $62,000 $61,500 $61,000 $60,500 $60,000 $59,500 $59,000 $58,500
$60,784
$63,546
$63,496
$60,466
$61,333
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
in Thousands
3350 3300
3310
3250
3200
3150
3100
2000
3311
3304
3296
3275
2001
2002
2003 2004
Massachusetts Net Migration 2000-2004
50,000 30,000
32,268
32,244
31,555
31,535
10,000
-10,000 -30,000 -50,000 -70,000
-14,244
-28,074
-47,776
2000-01 2001-02 2002-03
-58,910 2003-04
Figure 2.3 Population Change by Age Cohort Boston PMSA 2001-2003
15.0%
10.0%
5.0%
0.0%
Under 5 years 5 to 19 years 20 to 24 years 25 to 34 years 35 to 54 years 55 to 64 years 65 years +
-5.0%
-10.0%
-15.0%
Change 2001-2003
Where did they go?
Net Migration* Betweeen Massachusetts and Competitor States 1990-2002
WA OR ID NV UT CA
MT WY CO
AZ NM
State Florida New Hampshire California Arizona North Carolina Washington
Net Migration from State -99,082 -78,201 -23,978 -11,033 -8,983 -4,516
ND SD NE KS OK TX
ME
MN
MI
WI
MI
VT NH
NY
MA
CT RI
IA IL MO AR
OH IN KY TN
PA
NJ
MD DE WV VA
NC
SC
MS
AL
GA
LA FL
*Thicker line represents more migration
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
Total Annual Family Budget
$70,000 $65,000 $60,000 $55,000 $50,000 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000
$64,656
$61,440
Figure 2.1 Total Annual Family Budget for a Family of Four Boston, MA vs. Competitor Regions
$58,656
$57,624
$54,948
$47,520
$44,124
$43,704
$43,584
$43,452
Boston, MA Washington, DC New York City, NY San Francisco, CA Minneapolis, MN Raleigh-Durham-ChapDelenHivlle,r,NCCO Chicago, IL Austin, TX Miami, FL
Region
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
$1,266 $ 587 $1,298 $ 321 $ 592 $ 500 $ 824 $5,388
Raleigh-Durham-Chapel
Hill
Monthly Housing
$ 779
Monthly Food
$ 587
Monthly Child Care
$ 866
Monthly Transportation $ 358
Monthly Health Care
$ 368
Monthly Other Necessity $ 369
Monthly Taxes
$ 350
Monthly Total
$3,677
Annual Total
$64,656
Annual Total
$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 October 2002)
(-4.0% since
From May 2004 to February 2005, rents have remained largely unchanged
$1,953 $1,825 $1,745 $1,686 $1,677 $1,632 $1,579 $1,526 $1,517 $1,466 $1,439 $1,325 $1,316 $1,241 $1,155 $1,111 $1,043 $1,018 $1,012 $987
2005 Class A Apartment Rents $2,500 $2,000 $1,500 $1,000 $500 $0 SourcNee:wFYoorrbkBeossHtSMooannnaogFlruaalzunNicnoiesrtchoernSNNtaaJsmsafour-dSLuofsfoOAlknragneSgleaesnCJoousnetyS, CanADWieagOsohaiknlgatnRodniv,CeDre.sCniPdt.rheai-llSaNadJnelBpherianadBinaoltimoCrehicagoSMaicarmaimento
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
(in $thousands)
$400
$376
$350 $300
$343 $313 $273
$250
$245
$210
$200 $150
$186 $165 $168 $169 $159 $152 $146 $148 $150 $154 $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
Below $100,000 $100,000 - $199,999 $200,000 - $299,999 $300,000 - $399,999 $400,000 - $499,999 $500,000 - $999,999 $1,000,000 and Above
1998 2000 2001 2002 2003 2004
4
0
0
0
0
0
82 41 14
5
0
0
50 68 74 62 43 19
16
32
42
52
61
74
4
10
12
22
30
33
4
9
18
19
25
33
0
0
0
0
1
1
% of Communities with Median Single Family Sales Price
Below $300,000 $300,000 - $499,999 $500,000 and Above
1998 2000 2001 2002 2003 2004 85.0% 68.1% 55.0% 41.9% 26.9% 11.9% 12.5% 26.3% 33.8% 46.3% 56.9% 66.9% 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.
18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0
68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04
Figure 3.1 Housing Units Permitted Boston PMSA 5+ units 1-4 units
Year
Total Units Permitted
Units in Single family structures
Single Family Units as % of Total
Units in 2-4 Unit Structures
Units in 5+ Unit Structures
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
2004 13,556 7,000
51.60%
994
5,562
4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0
Table 5.1 Units Built Under Chapter 40B Comprehensive Permits
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 9,860
2002 5,952
% of Category Goal Met Subsidized New Construction % of Category Goal Met Student Housing % of Category Goal Met Total 3 Categories % of Overall Goal Met
4,300 1,500 15,660
60% 1,114 26% 951 63% 8,017 51%
2003
Change 2002-03
2004
Change 2003-04
7,525 76%
26%
9,259 94%
+23%
1,514
36%
1,678 +11%
35% 500 33% 9,539 61%
39%
-47%
367
-27%
24%
20% 11,304 +19%
72%
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"
Solving the Housing Crisis
Five 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
[email protected] 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

B Bluestone

File: the-greater-boston-housing-challenge.pdf
Title: The Greater Boston Housing Challenge
Author: B Bluestone
Author: Barry Bluestone
Keywords: Greater Boston, housing, demographics, population
Published: Sat Jul 28 03:01:59 2012
Pages: 41
File size: 0.47 Mb


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