Pace of multifamily housing permits slows in 2016
The apartment building boom looks to be taking a break in the Boston suburbs.
After a surge of construction earlier this decade, the number of permits issued for multifamily housing in the cities and towns that ring Boston dropped off steeply in 2016. What’s not clear is whether this is temporary, part of the normal ebb and flow of development, or the beginning of a longer trend that could put the brakes on desperately needed housing.
“I’m not quite sure I’d call it a downturn quite yet,” said Marc Draisen, executive director of the Metropolitan Area Planning Council. “Our production numbers are not bad; our permit numbers are not bad, historically, but I’m worried that we’re at the top [of the market] and we’re going to start slowing down production before we have met demand.”
In the 29 municipalities that ring Boston, permits for multifamily buildings — those with at least five units — dropped an estimated 53 percent in 2016 over the previous year, according to an analysis of US Census data by the Boston Foundation. Most cities and towns in and around the Route 128 corridor, where demand is greatest, experienced significant decreases, compared to 2015.
Boston itself, the epicenter of large-scale development, was not immune. After authorizing nearly 5,000 units in multifamily buildings in 2015, the city permitted 2,784 last year — about a 40 percent decline, according to the Boston Foundation.
Many of these municipalities have seen a significant increase in new housing — more than 13,800 units since the bottom of the most recent recession, mostly in multifamily developments, according to the foundation.
A recent study for the planning council estimated that metro Boston’s growing economy could attract at least 800,000 new workers by 2030. To prevent that from worsening the area’s already hyper-inflated rents and home prices, the council estimates, the metro region, which encompasses much of Eastern Massachusetts, would need 200,000 more housing units.
But some cities and towns immediately outside of Boston are already objecting to new building projects, from rejecting requests for special building permits to neighborhood opponents filing legal challenges to municipalities imposing all-out moratoriums.
“If anything goes up that’s more than two stories, people freak out,” said Rebecca Koepnick, the Boston Foundation’s director of neighborhoods and housing. “Because there are so many communities and they have so much control, it’s a question of do you see it in your self-interest to allow more housing. Some don’t see it that way.”
In Malden, voters in 2015 approved a one-year moratorium on multifamily developments after seeing some 300 new units authorized. The city recently extended the moratorium by several months to give officials time to review a study on housing density. Still, another 365 units that were approved before the moratorium are expected to come online this year.
Mayor Gary Christenson opposed the moratorium and is concerned it will kill proposals such as a $100 million project for 300 units at the long-vacant Malden Hospital site.
“There have been a couple [of proposals] that have been on the table for a little while that I’m not sure they will still be when the moratorium will end,” Christenson said. “But that’s the risk on the other side. It’s a balancing act.”
The town of Brookline is reviewing 10 proposals for affordable housing projects filed under a state law that allows developers to circumvent local zoning. Brookline had wanted a short moratorium on such projects, but worked out a deal with state officials that gives them more time to review individual proposals.
Collectively, the so-called 40B housing projects would add 970 units in Brookline. Among them is a proposed 21-story tower in Coolidge Corner that town officials recently petitioned the state to reject, based on its size and density.
“We do have a role to play in creating housing” in Greater Boston, said Brookline Town Administrator Melvin Kleckner. “There’s a great variety of housing in Brookline, but it’s very, very expensive, and that’s been our struggle. . . . So most developers are going to take the path of least resistance.”
In Newton, where Mayor Setti D. Warren has set a goal of building 800 affordable units by 2021, multi-unit proposals often face neighborhood opposition. Most recently, a 68-unit development proposed for a city parking lot has been tied up in a legal battle with abutters, while nearby a 160-unit mixed-use development plan for a project known as Washington Place is seeking a special zoning permit amid opposition from several residents.
Developer Robert Korff of Mark Development LLC said he has found getting Washington Place started in Newton, where he resides, “extremely challenging.” But even if the housing market shifts away from multi-unit projects, Korff said, Washington Place may still have a chance, given Newton’s shortage of apartments.
“Until more is built, not only in Newton but throughout the Commonwealth, the excess demand we have isn’t going to go away,” Korff said. “There will be peaks and valleys in the economy that may slow down development — rising interest rates, construction cost increases — but ultimately the cycle comes back.”
Draisen, the Metropolitan Area Planning Council’s director, said slowing construction during “a very hot moment of production” will only exacerbate chronic housing problems.
“We’re in kind of a desperate situation, in terms of the housing we need,” Draisen said. “Everybody wants a vibrant downtown where there are lots of jobs and people walking 24/7, but they fail to notice that in order to make that happen you need people to live there.”