We well know that the housing crisis in Greater Boston has only deepened in the years since the pandemic first struck. Home prices have soared, housing production has remained stagnant, and inequality has deepened. But the latest version of The Boston Foundation’s annual Greater Boston Housing Report Card, published on Wednesday, gave us an even clearer picture of just how bad things are right now.
Here are six key takeaways from the report:
Home prices have reached unprecedented heights, and not just at the high end
This isn’t news to homebuyers here, but it is a painful truth. Home values in Greater Boston have soared since the outset of the pandemic, and that growth is just now beginning to slow. The Greater Boston Association of Realtors’ most recent housing market report pegged the median price of a single-family home in the region at $763,000 in September, 26 percent more than it was in the same month of 2019.
And its not just higher-end homes in Boston’s wealthy suburbs that have seen sharp price increases. Greater Boston’s “regional urban centers,” defined in The Boston Foundation report as towns like Peabody and Methuen with higher-density cores surrounded by more suburban residential neighborhoods, for example, saw the value of low-tier homes jump some 15 percent between 2020 and 2021. In “metro core communities” like Somerville and Cambridge, low- and mid-tier home values grew eight percent over the same period.
Boston has some of the highest rents in the nation
A fact with which we are all too familiar. There’s some disagreement among firms that measure rental data about where exactly Greater Boston stands among the nation’s most expensive rental markets — a recent Zillow report, for example, had Greater Boston at fourth-highest in the United States, while others have placed the region as high as second — but it seems fairly clear that we’re squarely among the top five.
After some communities saw a dip at the very beginning of the pandemic, rents have risen unceasingly across every neighborhood in the state, now sitting at record highs in many places. That’s thanks to the pandemic, the report says, and the ways in which it shifted demand for rental housing. For example, the rise of remote work attracted people to lower-cost regional urban centers like Marlborough, where they could find more space for less money.
The bottom line: rents are sky-high just about everywhere in Massachusetts.
Housing inequality has deepened significantly
While eviction moratoriums and other renter protections staved off the wave of evictions and homelessness some feared the pandemic would bring, housing inequality has only deepened in the last couple of years, largely thanks to soaring rents and home prices.
The statistics in the Boston Foundation report are stunning. About 45 percent of renters in Greater Boston spend more than 30 percent of their income on rent — “cost-burdened,” in housing parlance — and the share of renters of color that fall into that category is even greater. About 52 percent of Black renters and 53 percent of Latino renters are considered cost-burdened. Ultimately, the report found, the pandemic has driven the largest single-year increase in cost-burdened families, about a six percent uptick in 2020, since 2006.
What’s more, the report found that over the last decade, the rise in housing costs has fallen harder on the region’s poorest residents. For Greater Boston’s lowest-earning 10 percent, housing costs increased 19 percent, the same rate as their overall income between 2011 and 2021. The wealthiest 10 percent, meanwhile, saw incomes grow three times as fast as housing costs.
Housing production is up, but still well below where we need to be
New construction in Greater Boston has started to tick up over the last decade, albeit slowly. The region permitted around 15,000 new units in 2021, roughly 2,000 more than the pace set over the previous few years. And over the last decade, almost every community type in the region has increased the number of new units they permit.
But there’s one key outlier: Boston’s wealthy suburbs. Those towns and cities have seen their share of permits issued in comparison to the rest of the region slowly decrease. At the start of the decade, these areas, identified in the report as the “maturing suburbs,” were responsible for about 34 percent of the permitting in the region. In 2021, they accounted for just 12 percent.
And while production is up, it is still well short of the pace needed to address the region’s profound housing shortage. In 2018, the mayors of 15 cities and towns close to Boston established a goal of permitting 185,000 new housing units by 2030. By 2021, those municipalities had permitted just 38,639 new units, less than half what they needed to keep pace with their goal.
The wealthy suburbs lag behind on housing affordability efforts
Boston’s wealthy suburbs aren’t just behind in overall housing production, they hold by far the fewest subsidized housing units for low-income families. Just about 1 in 20 homes in the suburbs are subsidized, as compared to the “metro core” communities like Somerville and Cambridge, where that number is more like 3 in 20.
That is largely due to the fact that these suburbs tend to permit single-family homes at a pace far greater than apartments or other unit types that are more commonly used as rentals. In turn, these communities have far fewer rentals available, and far less opportunity for subsidized housing. And it means that, as a whole, these suburbs are less affordable for working class families than anywhere else in Greater Boston.
Need a place? Good luck finding one, at any price
Greater Boston consistently has some of the lowest rental and homebuyer vacancy rates in the country, a stark sign of the region’s supply shortage. The rental vacancy rate, which sat around 4.5 percent in 2021, is comparable only to metro New York City and Los Angeles. The homeowner vacancy rate was around 0.5 percent that same year, by far the lowest of the major metropolitan areas in the United States.
The impacts of those consistently low rates are seen in regional housing costs, but also in how homes and rentals fly off the market. In May of this year, the typical home sold in Greater Boston was listed for just 16 days before going under contract. In New York, it was 43 days.