How do you solve a housing crisis? Because by nearly any measure, Massachusetts is in the midst of one. The average home price in the Commonwealth is a whopping $535,000, with prices in Greater Boston much higher. Renters haven’t fared any better; by some measures the city has edged out San Francisco to become the nation’s second-most expensive rental market.
Housing isn’t the only driver of the state’s stratospheric cost of living — Massachusetts also has some of the highest energy prices in the nation and the nation’s highest child care prices — but the cost of housing has especially pernicious ripple effects. High prices scare workers and businesses away from relocating here, and they put gentrification pressure on low-income neighborhoods.
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The basic solution is simple: build more housing, in line with the economic theory that increased supply will bring down the cost of buying or renting.
The state doesn’t generally build houses itself. But it can create the conditions for more housing construction to happen by offering subsidies and incentives, pressuring communities to accept more construction, and, if necessary, reducing the power of local officials to thwart development.
Governor Maura Healey kicked off her administration with a promise to tackle the housing crisis. Luckily for her, she inherited two important tools from the administration of former governor Charlie Baker. One allows municipalities to make zoning changes by a simple majority of a city or town’s governing body. The other — the so-called MBTA Communities law — requires communities served by the MBTA and commuter rail to zone for denser housing near transit systems.
The density requirement recognizes that local zoning, which in many suburbs requires single-family housing on large lots, often makes it impossible to build new homes at price points that are affordable to middle-class families.
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Under the law, 175 Massachusetts cities and towns are required to submit action plans by Tuesday to tell the state how they plan to comply. It falls to the Healey administration to make sure that deadline is met and that the submitted plans are acceptable. Next, the MBTA communities have until the end of the year to put in place the zoning changes that are needed to expand housing. Commuter rail communities have until the end of 2024 to do so.
By itself, the MBTA Communities law won’t solve all that ails the Massachusetts housing market. But how aggressively the new administration enforces it will be an early barometer of its willingness to confront the crisis and withstand criticism from the powerful constituencies that often stand in the way of housing growth.
Under the best of circumstances, though, it’s going to take patience and persistence to chip away at a housing shortage that has been several decades in the making. According to Rachel Heller, director of Citizens’ Housing and Planning Association, about 17,000 new homes a year are currently built in Massachusetts. That’s half of what was built in the 1980s. “We need to produce 200,000 by the end of the decade to stabilize home prices and rent,” Heller told the editorial board.
When it comes to new housing production, the Healey administration has not committed to any specific number. But the housing plan Healey outlined during the gubernatorial campaign noted that as of July 2022, Massachusetts had a shortage of 108,157 homes. Filling that gap over the next four years would mean building a little more than 25,000 new housing units per year.
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The good news is that Healey understands that producing new housing is an essential part of addressing the housing crisis and that doing so is essential to the Massachusetts economy. To underscore her commitment to the overall housing cause, Healey pledged to file legislation in her first 100 days to create a secretary of housing who would report directly to the governor. She also directed the secretary of administration and finance to identify state-owned land and facilities that could be turned into rental housing or homes within one year. Healey also promised to get help to first-time homebuyers and reduce costs for renters by expanding tax deductions.
She has a good partner in Lieutenant Governor Kim Driscoll. As mayor of Salem, Driscoll served on the Salem Housing Authority and championed a variety of housing initiatives — some of which encountered community opposition. “Any time you’re talking about growth, it can be a challenge,” Driscoll told the editorial board. But, she said, it’s all about balancing need against resistance while trying to find a middle ground that takes both into consideration. “We don’t start from the premise that adding housing is a negative,” said Driscoll. “That doesn’t mean build anywhere, any how, any size.”
That she understands the need to win hearts and minds is an advantage to the Healey administration. As Driscoll points out, the state “doesn’t build housing. It’s not out there with hammer and nails.” It needs a variety of tools to encourage others to do it, she said, including public-private partnerships, the loosening of some regulations, and an assortment of “carrots and sticks.”
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With the MBTA Communities law, for example, the carrot is the technical help the state is providing to local communities to work on their action plans and zoning proposals. The stick is that a community becomes ineligible for state grant programs if the Tuesday deadline is not met. Sticks will continue to be necessary because for many of the voters who turn out in town elections or show up for local zoning meetings, skyrocketing home values are no crisis at all.
In an ideal world, more housing would reduce the pressure on the existing housing stock, which is the root cause of displacement and gentrification. Indeed, low-income tenants in triple-deckers benefit from new housing construction too; build enough new housing and the economic incentive for landlords to evict tenants and turn their homes into condos disappears.
But it will take years or decades for the market to stabilize. In the meantime, the state will need to take steps to protect those low-income renters and provide more rental assistance and subsidized rental housing. One promising approach is a local option real estate transfer tax that allows communities the option to raise funds for subsidized housing by taxing high-value property sales.
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Meanwhile, housing advocates want a housing bond bill big enough to fund affordable rental and homeownership housing, special needs housing, elderly housing, and needed capital improvements to state-financed public housing. To really solve the housing crisis, said longtime housing activist Lew Finfer, “huge amounts of state dollars are needed” on the housing production and rental assistance side.
Healey’s first budget will show how much more money the new governor is willing to put behind her words of support. But for now, housing activists like Heller are happy to hear those words. “This is the first time the state is saying, ‘We need more homes,’ ” said Heller, while also saying to local communities, “We’ll work with you, but we need this.” “We have not had anything like that before,” she added.
It is notable that Boston Mayor Michelle Wu has also made housing a priority, underscoring the breadth of the problem. But the crisis is statewide, making the role of state government paramount. This is the moment to act on that need, and Healey has inherited the tools to start to meet it.
Editorials represent the views of the Boston Globe Editorial Board. Follow us on Twitter at @GlobeOpinion.
