A diverse and affordable housing stock that meets the needs of all residents is increasingly important to Greater Boston’s regional economic competitiveness.  From the early 1990’s to about 2000, Greater Boston’s hosing prices rose at about the same rate as Massachusetts economic activity—both Case Schiller Index and the Economic Activity Index rose about 55% between 1992 and 2000.  However, Greater Boston’s housing prices increased by 80% between 2000 and 2005—the last housing peak—compared to just a 6% rise in economic activity and the Greater Boston Housing Report Card has shown that the stagnation of Massachusetts’ economy is directly related to the loss of jobs and people stemming from Greater Boston’s high hosing costs.  Demographic shifts in the workforce underpin the need for not just more housing, but housing that fits the needs of the population, such as smaller, transit-oriented workforce or starter homes and an increased in affordable rental properties.  Through the year 2030, Greater Boston’s population will only increase among those ages 55 and older while the child and workforce population (aged 25 to 35) is expected to peak in 2010 and then decline.  Likewise, Massachusetts net population growth is being driven through immigration of foreign-born individuals and families.  Even despite a slight decline in Greater Boston’s home prices since the beginning of the recession and a slight increase in the production of housing, stagnated income and rising unemployment have kept Greater Boston relatively unaffordable for much of the region’s current and future workforce (see Indicator 6.2.1)

Driven by still-increasing rents and still-high home prices, Greater Boston remains one of the nation’s least affordable regions, despite the near-collapse of the housing market in 2008. Housing costs in Boston and Massachusetts have soared since the mid-1990s for both renters and homebuyers. Sales prices and volumes for homes in the City of Boston have declined since their 2005 peak.  According to the Department of Neighborhood Development, in 2008 the citywide median sales price declined by 6% over 2007 for one-to three-family homes and condominiums—the third consecutive year of a citywide median sales price decrease—and sales volumes decreased 18% between 2007 to 2008, and 37% since the market peak in 2005.  Rents are also rising. Greater Boston has the second highest median rental prices in the nation, just behind San Francisco, with the median rent eating up more than 50% of the median renter’s household income in 2008. According to the 2008 American Community Survey, 50% of renters in Boston pay more than 30% of their income to rent and utilities, the third highest proportion among all states 

The collapse of the financial and housing markets reversed a decade-long downward trend in foreclosures in Boston, highlighting discriminatory lending practices in particular neighborhoods of Boston and “gateway” cities in which large numbers of newcomer immigrants reside. City of Boston recorded 1,215 foreclosure deeds in 2008, up from 703 in 2007. However, the pace of activity declined slightly in early 2009, perhaps due to a new 90-day “right to cure” period in effect since May 2008.  According to Boston’s Department of Neighborhood Development, of the 64% of petitioned properties that ended up in foreclosure, 72% were Adjustable Rate Mortgages, and two-thirds were located in three neighborhoods—Dorchester (34%), Roxbury (20%) and Mattapan (12%)—where the majority of families of color with children reside. Roslindale experienced the greatest rise in foreclosures: jumping 135% from 2007-2008. Subprime lenders are the most prevalent originators of loans that have gone into foreclosure, often involving Adjustable Rate Mortgages (ARMs) and High Annual Percentage Rate (APR) loans, which can be indicative of predatory lending. According to the BRA, 72% of foreclosed mortgages in Boston were ARMs (see Indicator 6.7.2). 

The sluggish pace at which housing is being constructed in Greater Boston hinders job growth and with permitting for new housing in Greater Boston down sharply, which may lead to a lack of supply and sharp increases in prices when the economy rebounds.A report released in January 2009 by the Massachusetts Housing Partnership noted that Boston’s housing stock increased by about 6% in the 1990s, lower than the national average.  Constrained housing availability limits the possibilities for workers who might otherwise move to the region, thus keeping down job growth.  Northeastern University’s Greater Boston Housing Report Card found that even with a softening real estate market, prices remain unaffordable for middle-income families and that few of the new housing units are targeted to the “workforce housing” market. Northeastern University’s Dukakis Center for Urban and Regional Policy , in its The Greater Boston Housing Report Card 2009, found that the total number of units permitted in the region declined from over 15,000 in 2005 to about 8,000 in 2008—significantly less than their projections for the amount of housing needed to keep pace with population growth.

After decades of living large, more Massachusetts communities are implementing Smart Growth plans and zoning and committing to preserving affordable housing and open space. Sincethe passage of Massachusetts General Laws 40R/40S, 28 communities have adopted Smart Growth zoning districts which promote low-impact, high-density, transit-oriented zoning overlays.  Approved districts account for over 1,200 acres and 9,500 zoned housing units.  As of 2009, 950 housing units have been constructed in these smart growth districts of which 220 are affordable. As of March 2009, 140 communities in the Commonwealth had adopted the Community Preservation Act (CPA). From 2004 to 2009, the number of municipalities adopting the CPA increased 119%—from 64 to 140. The Community Preservation Act, enacted in 2000, allows communities to adopt a property tax surcharge and spend the resulting funds on affordable housing, open space and historic preservation; the state matches the local funds from a special trust fund (see Indicator 6.1.3).

Boston’s housing development and plans are increasingly green and transit-oriented, with a focus on creating healthy and sustainable homes and communities. In 2007, as a part of the Climate Action Agenda,Boston became the first US city to mandate LEED standards for most new buildings in 2007 and since then has added 81 LEED-certified buildings, many of which are mixed-income, transit-oriented housing communities such as Olmsted Green Community in Mattapan, Maverick Landing in East Boston—Massachusetts’s first model green, affordable multi-family housing develop­ment, adhering to “healthy homes” principles and achieving LEED certification.  Recently, $40 million in American Recovery and Reinvestment Act (ARRA) stimulus funding has been allocated to renovate and LEED-certify Boston Housing Authority properties including $10 million for Roslindale’sWashington-Beech as well as Old Colony in South Boston, Cathedral in the South End, Health Street in Jamaica Plain, and Amory Street in Upham’s Corner.  Other stimulus-funded projects slated to begin in 2009 include the installation of more energy-efficient lighting and heating at several housing developments ($5 million); upgrades to bathrooms in several of the housing authority's oldest developments ($10 million); heating and cooling system improvements ($5 million); and security camera installation ($1 million). (See Indicator 5.2.4).  BHA has also partnered with Madison Park Development Corporation to develop the final phase of the Orchard Gardens community,Twenty at Luma, will include 20 homes and feature energy-efficient homes. Sixteen of the 20 units will have solar panels.

Massachusetts has  lost 12,359 subsidized units as of 2008, and is at risk of losing 24,546 more by December 31, 2012 through “expiring use.”  From the 1960s through the 1980s, affordable housing developments were often supported through subsidies intended to lock in affordability for up to 40 years, but which included provisions allowing the owner to pre-pay the mortgage after 20 years to end restrictions on tenants’ income and rent.  Unless steps are taken, these so-called "expiring use" projects are at risk of being removed from Greater Boston’s already limited stock of affordable housing. Regional efforts could match those in the City of Boston, where 5,093 units have been preserved since 2000 while 554 units were lost.  The City of Boston has identified approximately 1,600 units at risk in 2008.

Community development corporations (CDCs) continue to play a critical role in neighborhood stabilization and promoting green, transit-oriented affordable housing. Nonprofit, community-based CDC’s are a critical piece of the affordable housing production network in Boston and throughout Massachusetts and are playing and even more critical role in stabilizing Boston’s neighborhoods hardest-hit by the foreclosure crisis.  In 2008, Urban Land Institute and the Massachusetts Association of Community Development Corporations convened a host of statewide public, private, nonprofit and community leaders to establish the Massachusetts Foreclosure Task Force to develop models of foreclosed property acquisition, redevelopment at mixed-income and affordable housing and to facilitate the clearing of the foreclosed property pipeline by matching properties with new home buyers.  Locally, in Boston many neighborhood CDC’s have begun the work of stabilizing neighborhoods and affordable housing:

With the encouragement of the City of Boston, Boston’s dormitory building boom has continued.   On average, more than 1,000 dormitory beds have been added annually in the City of Boston since 1990 as part of an effort by the colleges and universities to reduce competition for apartments between students and neighborhood families. The BRA estimates that almost 13,000 undergraduates and 11,000 graduate students continue to live in Boston off-campus housing.

Despite HUD-reported decreases in the number of chronically homeless people nationwide, the number homeless family cases continues to rise in Massachusetts and in Boston.   Massachusetts Office of Health and Human Services monthly reports reveal that there were the homeless individual caseload rose to 3,176 in December 2008, 188 more than in December 2007 and 355 more than in December 2005. The number of homeless families more than doubled, from 1,179 in December 2004 to 2,593 in December 2008.Boston’s annual census of the homeless population, undertaken each December, found 7,681 homeless people in 2008, an increase of 11% over 2007. The number of homeless children in Boston increased 24% over the past year, and the number of homeless families 22% (see Indicator 6.5.1).

The lack of available financing stemming from the economic recession has left many development plans in Boston—some of which were already underway—in limbo.  Harvard University unveiled a sweeping 50 year master plan for a 250 acre development expansion into the neighborhood of Allston that would bring student housing, public and retail space and museums with the anticipation that the first 20 years would create 5,000 new jobs.  However, in the wake of the recession and a 30% loss to the endowment, Harvard announced in 2009 that it would delay—and perhaps halt completely—the first phase of development, including a $1 billion science center.  In 2007 the Boston Redevelopment Authority approved a mixed-use residential and commercial structure that would preserve some of the façade of the historic building.  However, stalled development and a $700 million funding gap has left the Boston institution as a giant, walled-off hole in the ground.  Plans for major redevelopment of Columbia Point in Dorchester have been significantly reduced as the down economy has sapped potential financing for the major development proposals.  Boston’s waterfront and fan pier remain largely undeveloped.  Though Mayor Menino had announced plans to move City Hall to the waterfront, lack of funding is prohibiting the bold move as well as new commercial and residential property development.

Housing-related costs such as energy and property taxes are escalating.  Many low-, moderate-, and middle-income homeowners find it increasingly difficult to keep up with the rising costs of energy and taxes.  Between 1999 and 2009 Greater Boston’s fuel and utility costs have increased 77%and energy costs have skyrocketed by 152%.    Natural gas prices increased 5% from 2005 to 2006 and have fluctuated since then, peaking in July 2008.According to the annual Home Energy Affordability Gapreport, actual low-income energy bills exceeded affordability by $937 million at 05-06 heat­ing fuel prices and there has been an increase in the number of Massachusetts and Boston families reliant upon LIHEAP, Citizens’ Energy and other heating assistance program.  Statewide property taxes have also been increasing 12% over the last two years in Massachusetts and in December 2009, the City of Boston announced that property tax rates would increase for the first time in 3 years—by nearly $173 per month for the median-priced home in Boston.