Housing costs in Boston and Massachusetts have soared since the mid-1990s, and today, Metro Boston is one of the least affordable metropolitan areas in the US for both renters and  homebuyers.  While home prices fell slightly by 2% in 2006 for the first time since the early 1990s, housing costs remain comparatively high.

• The National Low-Income Housing Coalition’s 2006 report  Out of Reach found that in Metropolitan Boston, a full-time worker would have to earn $26.27 per hour to afford a two-bedroom apartment. This places Metro Boston as the sixth "least affordable" metropolitan area for renters, behind only: Stamford, Connecticut; San Francisco, California; Westchester County, New York, and two other California metro areas. In state rankings, Out of Reach found Massachusetts to be the third most expensive, behind Hawaii and California.
• According to the 2005 American Community Survey, 47% of Greater Boston’s renters pay more than 30% of their income to rent, with 23% paying more than 50% of their income to rent. Housing affordability is usually defined as 30% or less of household income.
• According to The Boston Foundation-sponsored  Greater Boston Housing Report Card 2005-2006, in only 19 of Metro Boston’s 148 municipalities could a household making that community’s median income afford the median-priced single-family home in 2005. For the first half of 2006, this increased to 27 municipalities.
• In the City of Boston, the 2005 median income of $46,392 was only enough to afford a $210,871 home, which was only 54% of the median home sales price of $390,000. While lower sales prices bring with them the promise of more affordable homeownership opportunities, prices have only fallen 2% from 2005 to 2006.

Permits for new housing units in Greater Boston continued to rise from recent low levels in the early part of the decade, but with a weakening housing market, declined in 2006.  The number of new units built rose to 15,423 in 2004 and an additional 12% to 17,442 in 2005, but fell 18% to 14,342 in 2006.Despite this drop, this is still a significant number compared to 2001 and 2002, when less than 10,000 units were permitted annually.  The drop in production from 2005 to 2006 has hit the single-family market hardest, with a 24% drop in the number of units permitted.

Boston’s dormitory building boom continued.   Between 1990 and 2006, more than 8,000 dormitory beds were constructed in Boston—the equivalent of building 2,000 new housing units. A 2006 Boston Redevelopment Authority study calculates that there are now 29,875 dorm beds at Boston’s colleges and universities. Almost 13,000 undergraduates and 11,000 graduate students live in Boston off-campus housing with 4,390 additional dorm beds in the production pipeline.  These numbers should continue to fall as more students (especially undergraduates) move on-campus.

In Massachusetts and in Boston, the number homeless family cases continues to rise.  Massachusetts Office of Health and Human Services monthly reports reveal that there was a 16% increase in the average number of homeless family cases in 2006 compared to 2004. Boston’s annual census of the homeless population undertaken each December found a 10% increase in the number of homeless persons from 2004 to 2006. Of 6,413 people counted in Boston’s 2006 survey, 24% were children.

While homeownership rates among people of color and newcomer immigrants in Greater Boston are increasing, the gap in homeownership rates between whites and people of color has also increased.

• The Census Bureau reports that in Greater Boston, from 2002 to 2005, households headed by people of color who were homeowners increased from 22% to 25% while the homeownership rate among white/non-Hispanic households increased from 39% to 44% widening the gap from 17 points to 19.
• Between 1990 and 2000, Boston lost 1,700 white homeowners while the number of black, Latino and Asian homeowners increased, with Latino homeowners doubling. Harvard University’s Civil Rights Project found that while Metro Boston’s suburbs suffer from deepening racial segregation, Boston "showed notable progress in reducing segregation," with the number of ethnically-mixed neighborhoods increasing between 1990 and 2000 (See indicator 6.7.1).
• The trend of low mortgage foreclosure rates in the late 1990s and early 2000s reversed in 2005 and especially in 2006.Boston mortgage foreclosures hit an all-time low of 25 in 2004 but increased dramatically to 260 in 2006.  While this is a small number compared to the region’s 1991-1994 housing recession, the increase is highly concentrated in the Boston neighborhoods of Roxbury, Mattapan and Dorchester, which are predominantly of color.  In its annual mortgage lending study, the Massachusetts Community & Banking Council found that from 2004 to 2005, the number of home purchase loans increased 25% for African-American households and 18% for Latino households. Though increased lending might seem to be good news, the additional loans were made by “subprime” lenders.  Almost all foreclosures represent loans made by sub-prime lenders. Research by the Boston’s Department of Neighborhood Development indicates that the number of foreclosures is likely to increase.

Housing advocacy has grown broader and more collaborative.  Producing more housing and moderating the cost of housing were cited as a priority in reports issued by researchers at groups ranging from the New England Policy Center at the Federal Reserve Bank of Boston to the Center for Regional and Urban Policy at Northeastern University and the Rappaport Institute at Harvard University to the Pioneer Institute and Greater Boston Chamber of Commerce, to the Massachusetts Technology Collaborative and MassINC. The Commonwealth Housing Task Force, coordinated by the Boston Foundation, brings together stakeholders from across the sector to develop a consensus agenda to move housing priorities forward. Increasing collaboration between private, public, and nonprofit entities resulted in innovative new Massachusetts smart growth zoning legislation, 40R and 40S, and helped to jumpstart large-scale development projectsin a number of locations including Jackson Square (Roxbury/Jamaica Plain), Chelsea’s Box District, and Olmsted Green on the site of the former state hospital site in Mattapan.

Demographic trends, increasing demand for housing located near public transit, and the new 40R/40S zoning overlay districts available to cities and towns are stimulating "smart growth" development.   A September 2004 study by Reconnecting America’s Center for Transit-Oriented Development found that more than 400,000 people in Greater Boston live within one-half mile of the MBTA’s 280 commuter rail and rapid transit stations. The study projects that the demand for such housing, especially among both aging empty nesters and families with children, could increase to nearly 840,000 households by 2025. Within the two years since passage of the new 40R/40s zoning overlay districts—that emerged from conversations among members of the Commonwealth Housing Task Force designed to encourage mixed-use development at transit nodes and in city and town centers throughout Massachusetts—12 communities have passed the new zoning, projected to add at least 4,000 new units, with more than twice as many considering passage. The Commonwealth Housing Task Force estimates that 33,000 new units could be built in such districts over the next decade.

Community development corporations (CDCs) have continued to play a critical role in the production and protection of affordable housing.  Nonprofit, community-based CDCs are a critical piece of the affordable housing production network in Boston and throughout Massachusetts. The Massachusetts Association of Community Development Corporations has set of goal of creating or preserving 2,700 affordable housing units statewide in a two-year period. Some 1,092 such units were created or preserved in the first year of this effort.

Massachusetts’ affordable housing zoning law, Chapter 40B, continued to be challenged in the state Legislature, and efforts were made to help towns use 40B more effectively.  Chapter 40B streamlines the permitting of affordable housing projects in communities where less than 10% of the housing is affordable. In 2000, only eight towns and cities in Boston’s Metropolitan Statistical Area had met this 10% threshold. By mid-2006, 22 towns and cities met this threshold. While these towns and cities only represent 17% of the metro’s municipalities. The Massachusetts Housing Partnership released guidelines in November, 2005 that assist local zoning boards in their review of 40B housing applications. In addition, in January, 2006, the Massachusetts Department of Housing and Community Development began to require that 40B Developments follow sustainable/smart growth development guidelines. Between 2000 and 2006, there was a 16% increase in 40B-eligible units in Boston’s suburbs.

Boston’s major institutions are building housing for employees and neighbors.  Boston’s colleges, universities, hospitals and medical institutions employ nearly 1 of every 5 jobs in Boston. Joslin Diabetes Center and Children’s Hospital Boston constructed a combined research facility and condominium tower in Longwood Medical Area, the YWCA created 184 units of housing in its renovated headquarters building at 140 Clarendon Street, and Harvard University is funding affordable rental development in Allston.

Market-rate housing construction has tended to focus on upscale studios and one- and two-bedroom condominiums in Boston and expensive single-family homes in the suburbs, and highhousing costs are driving younger people to leave the region.In general, homes are growing larger even as household size declines. Half of the land dedicated to new residential development is used for low-density, single-family housing with lot sizes of one-half acre or more, driving more affordable new development to the edges of the Metro region and failing to meet the needs of those not wealthy enough to afford high prices closer in—often young families, singles and empty nesters hoping to enjoy affordable city living and short commutes. The average living space for newly constructed single-family homes statewide increased 44% between 1970 and 2001 from 1,572 to 2,260 square feet, even as the number of single-person households rose to 30% of all households in Eastern Massachusetts and 37% of all households in Boston compared to only 25% nationwide. Lot sizes are also growing. On average, the typical new single-family home in Greater Boston now consumes twice as much land as an older home in the same community.