Housing boom isn’t hitting Boston suburbs
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These are boom times for building in Greater Boston. But really only in parts of it.
The epic surge in housing construction that is reshaping Boston and some of its immediate neighbors is largely bypassing many suburbs and the smaller cities that ring the region. And that, industry specialists said, is one reason why all the additional housing isn't doing much to dent the cost of living in one of the nation's priciest real estate markets.
It's the result of growing demand to live near the core of a vibrant city, especially among young professionals. But it's also the product of decades of decisions that dampened development in many suburban towns, making it harder to build in places beyond the crowded and increasingly costly city.
That dynamic is driving both developers and residents into the core of the region, adding to the upward spiral of housing costs. And it is threatening the future of the region's already shrinking middle class, housing experts say.
"Nobody has figured out how to build housing the middle class can afford," said Barry Bluestone, a Northeastern University professor who studies the region's housing market. "We've got to come up with some new answers."
This comes as Massachusetts is building more housing than it has in nearly a decade. There were more building permits issued in the state in 2015 than in any year since 2006, according to an analysis by the Massachusetts Housing Partnership.
But unlike 10 years ago, when new subdivisions spooled out past I-495 and development spilled into lower-cost cities such as Lowell and Worcester, this boom is intensely concentrated in Boston and a handful of neighboring communities. And much of the new construction is apartments. While permits for units in large buildings are at record highs, less than half as many single-family homes are under construction as were in 2005.
"All the new construction is in one piece of the market," said Stockton Williams, head of the Urban Land Institute's Terwilliger Center for Housing, which is hosting a conference on middle-class housing here this week. "The modestly priced, decent, single-family home has largely disappeared."
That's partly a function of demand. Developers build what they can make money on, and these days that's apartments for the influx of young adults with well-paying jobs who want to live close to Boston. There's a lot of profit renting two-bedroom apartments for $3,500 a month.
But it's also a function of zoning.
Boston and other cities such as Somerville and Chelsea have encouraged dense development, especially near T stations. But concerned about traffic and density, residents have pushed back in communities such as Brookline and Newton, where a 68-unit building on Austin Street in Newtonville triggered a lawsuit and fierce opposition before narrowly passing the Board of Aldermen in December.
Some towns — even those relatively close to Boston — have permitted virtually no multifamily housing in recent years and created rules that drive up the cost of single-family development.
That essentially shuts off the relief valve that suburbs have long provided, said Clark Ziegler, executive director of the Massachusetts Housing Partnership, which advocates for affordable housing. Closing off development in some towns drives up the cost of land and housing in the fewer places that are willing to allow development.
"Land costs are a function of zoning," he said. "If you could build, say, apartments on the Green Line in Newton Center, that would relieve pressure in places like Boston and Cambridge and Somerville."
Recent history gives some towns a reason to be wary. Suburbs such as Franklin and Easton that welcomed new development in the 1980s largely closed the doors after it became too much, veteran land use attorney Mark Bobrowski said, and they wrote new zoning and sewer rules that made it harder to build.
"Some of these towns were exploding at the seams. The schools were going to burst. Traffic was crazy," he said. "They managed to get a grip on that."
Three decades later, many of those rules are still in place, as are new ones, such as environmental protections. All those regulations drive down the stock of available land and make what a developer can build more expensive, said Jeff Rhuda, business development manager at homebuilder Symes Associates.
His firm — which has built dozens of subdivisions in the northern and northwestern suburbs — has responded by going smaller. Most of its projects these days include just a handful of homes: six in Beverly, eight in Lynnfield, five in Wakefield.
"In 2005, we only had three or four projects, but each was 30 to 50 units," he said. "We had to completely change our business model because it's just a much harder environment."
That dynamic has kept many large-scale homebuilders out of Boston, focused on markets with more land and lower costs where they can pop up houses, assembly-line style, at prices aimed more at middle-class buyers than the million-dollar mark.
One of the few national builders who does operate here is Pulte Homes, which has nine developments in Eastern Massachusetts and sells about 400 houses a year, said Geoff Rendall, the company's vice president for New England. But it's not an easy place to do business.
"The regulatory process is brutal," he said. "It's lengthy. It's cumbersome. And it differs so much from town to town."
Where Pulte can build, Rendall said, demand is no problem. A project in Plymouth is selling well, he said, and a new subdivision in Weymouth, part of the redevelopment of the South Weymouth Naval Air Station known as Southfield, has been getting 140 to 150 potential buyers a week coming through this spring.
"It seems to be very appealing right now," Rendall said. "For $300,000, you can buy new in Weymouth instead of renting in Boston."
When it's done, Southfield will hold nearly 3,000 homes and apartments, but there aren't many places like that available. More common in this boom are tight spots in Boston or one of its development-friendly neighbors, where a builder can squeeze a small apartment or condo project.
Those buildings fill part of the region's need for more housing, said Tim Reardon, data services manager at the Metropolitan Area Planning Council. But only a part.
His agency is issuing a report, as part of the ULI conference this week, on how high housing costs are squeezing the middle class out of Boston. The only way out of that trap, Reardon said, is building even more housing — especially the kind that more people can afford.
"This is a challenge our region has spent three or four decades creating," Reardon said. "It will take a long time to dig ourselves out."