Jessica Rinaldi/Globe Staff
Boston needs to build 53,000 housing units by 2030 to keep pace with rapid population growth that is already increasing prices and squeezing out low- and middle-income residents, according to a city report.
The report by Mayor Martin J. Walsh’s administration, previewed by city officials on Wednesday, calls for $21 billion in private and public construction that would increase Boston’s overall housing stock by 20 percent over the next two decades.
During that period, the city’s population is expected to jump by 15 percent, to 709,000 people, according to the report. That would be Boston’s highest level since the 1950s, when large numbers of people began to leave the city for surrounding suburbs.
Walsh wants to limit further real estate price inflation by creating 20,000 units for middle-income residents, largely built by private developers. His plan would loosen zoning restrictions and provide financial incentives to encourage construction of taller buildings in outlying neighborhoods. It would offer developers tax incentives and other assistance to help reach that goal.
He also wants to increase annual city funding for low-income housing by 65 percent, to $51 million, and require developers of downtown luxury complexes to pay more and build affordable units at other locations.
“This plan will allow people to buy homes and stay in their neighborhoods,” Walsh said, adding that he would seek to concentrate development around MBTA stations. “The quicker we create housing, the faster we stabilize the market.”
The 131-page report is the mayor’s first comprehensive attempt to address one of Boston’s most vexing problems — a widening income divide undermining economic diversity and pushing families out of neighborhoods where they have lived for generations.
Some of the proposals are similar to a smaller scale plan advanced by Thomas M. Menino, the former mayor, late in his administration.
In a press conference Wednesday, Walsh spoke about the issue in personal terms, describing the plight of a family forced to leave their home in the mayor’s own Dorchester neighborhood.
“They got a letter that they’re being evicted because somebody bought their house,” he said. “You can’t blame the new owner for wanting to condo-ize the building, but we’re losing the stability of having that family there. They raised four kids there and where do they go? That’s why we’re doing this plan.”
Rising rents and home prices are affecting neighborhoods across the city. During the past year, for example, a middle-income household earning $80,000 a year could only afford 1.7 percent of homes on the market in Downtown Boston. That family could afford only 4.7 percent of homes in South Boston, a traditionally working class enclave.
The number of people living in the city with earnings at or below median income levels is expected to increase in coming years, with senior citizens making up a large part of the demand. According to the report, an additional 14,600 units will be needed for people over 65 earning less than $50,000 a year, a 52 percent increase from 2010.
Prices have risen so much in some neighborhoods near downtown that Walsh and his aides concluded that building low- and middle-income housing there is no longer possible. Instead, they hope to spur construction in neighborhoods such as East Boston, Allston-Brighton, Dorchester, and Roxbury, where land is cheaper and more plentiful.
Part of the plan also includes construction of 16,000 units of student housing on campus by 2030, cutting by 50 percent the number of students living in private homes and freeing up that space for working individuals or families. The mayor said he would be receptive to private development proposals creating more housing for students by building student villages and other large complexes.
To produce more middle-income housing, the report proposes construction of large-scale housing complexes near MBTA stations, where developers could trim costs by building fewer parking spaces for residents. The city is also considering zoning incentives that would allow developers to construct taller buildings in select areas. Multiyear property tax breaks could also be added to make projects more profitable.
“We all know there is demand” for middle-income housing, Walsh said. “If we can create a market in these different areas, then people are going to come and build.”
Without financial incentive, the mayor’s report concludes, developers will continue to focus on building luxury complexes that command the highest rents and offer the best returns. More than 8,000 new apartments are expected to be completed in Boston during the next three years, but the vast majority are expected to rent for $3,500 a month or more.
Housing specialists said city officials must move swiftly to streamline building regulations and allow developers to take advantage of Boston’s thriving economy.
“We have to do this right and we have to do it big,” said Richard Taylor, director of the Center for Real Estate at Suffolk University. “Boston is a highly sought-after market by developers, but the complaints are that land is too expensive and the process is too complicated. Those are the areas we need to chip away at.”
The report proposes to help speed the city’s development review process, particularly for builders proposing new housing on small, privately owned parcels. That could help spur production in densely-packed areas, where building proposals often face long delays.
Some of the region’s largest housing builders are already increasing their investments in Boston. The city gained about 28,000 new residents between 2000 and 2010, then added the same amount over the following three years to bring the city’s population to 646,000.
“There is movement by a lot of people into great 24-hour cities, and Boston is certainly one of those,” said Michael Roberts, senior vice president for AvalonBay Communities Inc. Historically, the company has focused its investment in suburban areas, but it is now building more than 1,100 apartments in Boston.
While those units are targeted to wealthier renters, Roberts said the company “would be very interested in finding a way to make middle-income housing work.”
“The capital is there and the interest in that market is there,” he said. “Having a clear program to get us there is the key.”
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