Governor Deval Patrick put down a huge marker on housing last week. He said the state needs to build 10,000 new apartment and condominium units every year until the end of the decade, and he tied this mark to the state’s ability to sustain and grow its economy. Never mind the fact that the benchmark Patrick announced is enormously ambitious — according to the US Census Bureau, Massachusetts has only topped the 10,000 mark three times in the past three decades, and not once since 1987. If the state is going to ramp up new construction and ease the crippling housing-price spikes that drive workers out of state, it has to convince the cities and towns, which control the pace of new development, to actually believe in supply and demand.
Massachusetts struggles to turn the students it educates into workers and taxpayers because the state doesn’t have any power to dictate housing policy. Cities and towns, which control the pace of new construction, only permit new housing construction in fits and starts. As a result, during the last housing boom, prices jumped twice as much in Massachusetts as they did in the rest of the country. They’ve remained high in the bubble’s aftermath. Boston-area rents climbed steeply during the recent recession, and are now higher than they’ve ever been.
The state’s economy revolves around industries that depend on a steady influx of young talent, but the approach most cities and towns have taken toward building housing chases young, talented workers out of state. Development fights in two neighborhoods that are normally friendly to the governor show how maddening it’s going to be to hit Patrick’s housing production goal. Jamaica Plain in Boston and Central Square in Cambridge are both highly educated, liberal enclaves where activists have put basic economics under siege.
The neighborhoods sit on mass transit lines and are adjacent to important employment clusters (Kendall Square and the Longwood Medical Area), which makes them ideal places to grow. But vocal groups of residents in both neighborhoods are fighting new housing development tooth and nail. The Jamaica Plain set is lining up against several new market-rate apartment developments, while the Central Square activists are agitating against upzoning to accommodate new construction. Among other things, they are arguing that building new housing will raise prices and push existing residents out of town.
The gulf between supply and demand is enormous. According to a recent report by Northeastern University’s Dukakis Center for Urban and Regional Policy, the Boston metro area would need to double its current rate of housing development just to meet population growth; to accommodate stronger economic growth, the rate of development would need to triple, to nearly 19,000 new housing units per year. By that measure, Patrick’s benchmark of 10,000 apartment and condo units per year looks modest. But census data show the state hitting just a quarter of those 10,000 units last year. State officials believe the census figures, which show Massachusetts missing the 10,000-unit benchmark every year since 1987, under-count some construction projects, but they still admit they’ve set the bar high.
The surest way to drive housing prices higher is to choke off new supply.
Patrick’s new proposal specifically targets apartments and condos because, even when municipalities have been willing to allow new construction, they haven’t allowed the types of dense multi-family developments that actually take some of the strain off housing prices. More than 70 percent of the new homes Massachusetts has built since 1980 have been single-family dwellings. The governor would ease this imbalance by offering cities and towns priority access to state infrastructure funds, and relief from state affordable housing regulations.
What the new state incentives can’t do, however, is force cities and towns to look at housing as a math problem, rather than a narrowly fought identity war. Wealthy urban neighborhoods are inflating housing prices by mobilizing against new market-rate developments, while in the suburbs, single-family zoning artificially restricts developers’ ability to build housing for working-class residents. For every town like Reading, Easton, Burlington, and Somerville, all of which have recently embraced new housing development, there are suburbs like Hingham, Belmont, Mansfield, Harvard, and Ayer moving to preclude housing development of any significant scale. They’ve done so, even though the surest way to drive housing prices higher is to choke off new supply. And until Patrick can make cities and towns grasp that basic link between new supply and demand, any new construction target is set up to fail.