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Evan Horowitz | Quick Study

Housing for middle-class families in Boston is a struggle

For many of us, housing costs represent the single biggest drain on our family budget. A growing number of Americans spend 30, 40, even 50 percent of their income on housing, according to the latest assessment from the Joint Center for Housing Studies at Harvard.

Bostonians are no exception. About one of every three middle-class families in Greater Boston spends over 30 percent of their income on housing. Nationwide, it’s more like one in five.

How expensive is housing in greater Boston?

Boston has the ninth most expensive housing market in the country. People here spend $1,458 per month on housing, whether in the form of a rent check or a mortgage payment. That’s way above the national average, which is less than $1,000.

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Then again, it could be worse. Housing in Fairfield County, Conn., costs several hundred dollars more, and if you’re looking for a roof in Silicon Valley you can expect to pay over $1,800.

Who has the highest housing costs?
Median monthly costs in the greater metropolitan region
San Jose, CA
$1,841
Ventura County, CA
$1,742
Fairfield County, CT
$1,730
San Francisco, CA
$1,670
Honolulu, HI
$1,670
Washington, DC
$1,670
San Diego, CA
$1,480
New York, NY
$1,460
Boston, MA
$1,458
SOURCE: JCHS

Cost isn’t everything, though. Greater Boston may have expensive housing, but we also have good wages and a high standard of living. So while there are other, cheaper urban areas — say Philadelphia or Chicago — folks there tend to earn less money. Think of it as a tradeoff: expensive housing and good wages, or cheaper housing and lower wages.

In the end, across most of the big cities in the US, housing costs tend to make up a similar share of people’s total income, somewhere between 21 and 25 percent.

Have Boston’s housing costs been climbing?

Not as steeply as you might think. Consider families right in the middle of the income distribution in Massachusetts. Back in 2000, they had to spend about 4.9 years worth of income to purchase an average home. Today, they’d need 5.2 years worth. That’s a slight increase, but hardly a bubble.

By contrast, the average family in San Francisco needs 9.3 years worth of earnings to buy a home. In Portland, Oregon today’s families have to spend twice as much as they did 20 years ago.

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Can middle-class families afford housing in Boston?

Middle-class housing is in particularly short supply in Greater Boston. And the result is that middle-class families who choose to live here end up spending a lot of precious dollars.

The chart below looks at how many middle class families are considered “cost-burdened.” We’re talking about families who earn between $30,000 and $75,000 per year and devote more than 30 percent of that money to housing. As you can see, the cost burden is substantially worse here in Greater Boston.

This is one reason why there are so few middle-class neighborhoods in the Boston area.

Source: American Community Survey

What about the city of Boston itself?

Thus far, I’ve been talking about Greater Boston, or more specifically the Census Bureau’s definition of metropolitan Boston, which covers a big swath of territory, from Plymouth all the way up into New Hampshire.

Things look rather different as you get closer to Boston proper. Between 2013 and 2014, rents in the Cambridge/Somerville/Watertown area climbed a steep 5.5 percent, and rents in Boston shot up 14 percent, according to the real estate research group Reis.

What is to be done?

Perhaps the most direct way to drive down housing costs is to build more housing, as Mayor Martin J. Walsh has promised.

Even then, there’s only so much new construction can do. True, when new housing comes on the market, it can drive down prices by increasing supply. But pretty quickly those lower prices start to attract more people, which can push the price right back up.

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If affordable housing is the goal, then construction probably has to be paired with rent controls or a more robust program of housing subsidies. Also, it would help for the US to tackle inequality and funnel more economic gains to lower-earning families.

Is there anything else to consider?

Boston’s housing stock — indeed America’s housing stock — wasn’t built with the needs of seniors in mind. Yet, between now and 2030, the population of seniors is going to surge, thanks to the aging of baby boomers.

Finding suitable housing — not to mention in-home care — for aging renters and homeowners is likely to become a major policy priority in the coming years. And the long-term effect on our housing market is very hard to predict.


Evan Horowitz digs through data to find information that illuminates the policy issues facing Massachusetts and the U.S. He can be reached at evan.horowitz@globe.com. Follow him on Twitter @GlobeHorowitz