Business

Construction drops amid restrictions on home building

Symes Associates Inc. has begun construction on a 52-unit condo project (top and above) at the site of the former Danvers Hospital.

Suzanne Kreiter/Globe Staff

Symes Associates Inc. has begun construction on a 52-unit condo project at the site of the former Danvers Hospital.

SUDBURY — After Raytheon Co. announced last year it would close its longtime research facility here, town officials outlined their vision for redevelopment of the 50-acre site: a mixed-use project of retail, office space, and homes, including rental units to meet state affordable housing requirements.

But there was a catch. Sudbury officials wanted as many units as possible to have age restrictions that typically limit tenants to those over 55. They also welcomed senior housing, such as assisted living facilities to minimize the effect “on our already burdened school system and provide additional housing diversity for our growing senior population.”

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Sudbury’s approach to developing a significant tract of property captures what is happening across Massachusetts, contributing to a housing shortage that is driving up prices, shutting out young workers and their families, and threatening the state’s economic future as employers face the challenge of replacing an aging workforce.

Cities and towns, frequently citing added school costs, continue to either oppose new housing or accept it only reluctantly, allowing just enough to meet state affordable housing mandates and imposing restrictions that limit the types of homes that can be built. More than six years after the last recession, the state is building only about half the housing it did in 2005, the peak of the last boom.

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Perhaps more troubling, the lagging construction is part of a long-term trend that has seen housing production diminish through each economic cycle. During the tech boom of the 1980s, the state was adding an average of about 30,000 units a year, according to the US Census; through the tech boom of this decade, the state has built an average of just 10,000 homes a year.

“It’s impossible for us to sustain a strong economy if we continue to obstruct new housing and make it difficult for young workers to settle and raise families in Massachusetts,” warned Clark Ziegler, executive director of the Massachusetts Housing Partnership, a public nonprofit that promotes construction of affordable housing. “At some point, a day of reckoning is coming, when young people will decide they can no longer afford to stay here.”

Greater Boston has some of the highest housing costs in the nation, with a median home price of $420,000, compared with $229,000 nationally, according to the National Association of Realtors. Already, Census figures show, Boston is losing workers to other innovation hubs with more robust housing construction and lower median home prices, such as in metropolitan Atlanta ($179,000), Dallas ($210,000), Denver ($353,000), and Portland, Ore. ($319,000). In all, the Boston area has lost population in recent years to 11 of 19 metropolitan markets with dynamic, tech-oriented economies, according to the Massachusetts Housing Partnership.

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Metro areas like Atlanta, Dallas, and Denver have much more undeveloped land than Boston, which contributes to lower land and housing prices. Still, housing industry officials say, Massachusetts’ local zoning restrictions make land and homes even more expensive here.

Limits on lot sizes, density, the number of bedrooms per unit, and age restrictions are all tools used by communities to limit the amount and type of housing, industry specialists said.

In 2015, the number of housing permits issued in the state is on track to end the year at about 14,000, or approximately the same as in 2014 and 2013, well below the prerecession peak of 24,500 permits. Construction industry officials say the state of housing production is even more grim than the numbers suggest.

About half of the 13,000 housing permits issued so far this year in Greater Boston are in just three cities: Boston, Chelsea, and Everett. And many of those units, especially those in downtown Boston, are luxury units well beyond the means of working- and middle-class residents.

“Housing construction has just gotten worse and worse and worse in Massachusetts,” said Jeff Rhuda, the business development manager at Symes Associates Inc., a Beverly home builder. Symes is completing a 52-unit condo project at the site of the former Danvers Hospital in Danvers, but Rhuda said his business, in terms of housing units built in Massachusetts, is down about 40 percent since 2005.

Bob Ernst, owner of FBN Construction in Hyde Park and president of the Builders and Remodelers Association of Greater Boston, said new home construction accounted for about 40 percent of his business 20 years ago; today, only 15 percent of his business is new construction, with the rest comprising remodeling.

Many suburban towns balk at new housing developments because of concerns about the influx of school-aged children, the costs of educating them, and the pressure to raise property taxes to cover those costs.

“Every community worries about the impact [of new housing] on its schools,” said Peter Abair, a member of Sudbury’s planning board. “It’s a major concern in any town, no doubt.”

It’s not as if Sudbury hasn’t been growing — and building homes. In 1950, the town, located about 20 miles west of Boston, was largely a farming community with a population of only 2,600. Sixty-five years later, its population has ballooned to 18,000 as families fled cities over the decades for suburban space and jobs with employers such as Raytheon, which has been in Sudbury for more than 50 years.

Suzanne Kreiter/Globe Staff

Symes Associates, which is building condos in Danvers, said business is down since 2005.

Raytheon recently agreed to sell its Sudbury site, located along the Boston Post Road, to National Development, the Newton real estate development company. As expected, National Development and its partner, the Virginia real estate company AvalonBay Communities Inc., have unveiled tentative redevelopment plans that closely follow Sudbury’s stipulated housing guidelines: 250 rental units, of which 87 would be affordable and an unspecified number age-restricted; a memory-care facility; and possibly 40 to 60 age-restricted (55 years old and up) condominium units.

Since National Development and AvalonBay have closely followed Sudbury’s redevelopment wishes, their plan is being tentatively supported by town officials, who say the Raytheon site along the Boston Post Road, also known as Route 20, is an appropriate place for a dense, mixed-use development.

The town, however, was caught off guard earlier this year when another developer proposed a second major housing project located about 2 miles away, near Sudbury’s town center. Called “The Village at Sudbury Station,” the project proposes 250 apartments, including 87 affordable units. But Sudbury officials have expressed “grave concerns” about that project’s potential effects on traffic and its close proximity to the historic district.

In Sudbury, where the median home price is $780,000, about 6 percent of housing is considered affordable. Sudbury officials say they’re doing as much as they can to add more affordable housing, noting that two projects built in the town over the past five years created more than 90 affordable units (though the majority are age-restricted rental housing).

In a forthcoming paper prepared by Public Policy Center at the University of Massachusetts Dartmouth, researchers examine the effect of various housing developments on community finances. Among other things, the study will show that in some cases new housing developments do put an extra financial burden on towns and city services, said Michael Goodman, the center’s executive director.

But he said the study, expected to be released before the end of the year, also shows that towns that have recently seen a decline in school-aged children don’t financially suffer when developments bring in more students. Those “under-capacity” school systems can often absorb new students without hiring new employees, he said.

The public-policy solution, Goodman said, is perhaps to get the state to defray the additional public-service costs tied to new housing developments and, in the process, lessen local opposition to new housing projects across the state.

“Housing construction has just gotten worse and worse and worse in Massachusetts,” said Jeff Rhuda, the business development manager at Symes Associates Inc.

Suzanne Kreither/Globe Staff

“Housing construction has just gotten worse and worse and worse in Massachusetts,” said Jeff Rhuda, the business development manager at Symes Associates Inc.

Jay Fitzgerald can be reached at jayfitzmedia@gmail.com.
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