Now that the Red Line service is back to normal (for now), it’s time to turn our attention to the other festering crisis — the high cost of housing.
It was the top issue voters wanted to talk about with Charlie Baker when he ran for reelection last year, and it has been top of mind for Boston Mayor Marty Walsh, who last week made an impassioned plea for more middle-class housing in his annual speech to Boston bigwigs.
“Housing is not a commodity; it’s a community. It’s where people build their lives,” Walsh told about 700 people at the Greater Boston Chamber of Commerce breakfast. “We have to be able to provide security and stability in our communities, and we have to be able to house our workforce.”
Harder to detect is the fallout from a housing crisis. We don’t see it when people can’t afford the rent, can’t buy the home they want, or can’t stay in the state because the cost of living is too high.
But with the median price of a single-family home in Greater Boston hitting $640,000 in August, the cost of housing is the evil twin of our broken transportation system. The two are inexorably intertwined. If we had a more robust T and less road congestion, there would be more places people could live without commutes lasting more than two hours each way.
Instead, prospective home buyers are fighting for the same properties in many cities and towns, driving up prices to record highs.
We know how to solve this problem: Create more supply.
That has been Baker’s approach. He’s doubling down on zoning reform and once again pushing for a bill that would allow municipalities to change some zoning designations with a simple majority vote by the local governing body, instead of the current two-thirds.
Here’s a statistic the governor likes to cite about why the Massachusetts housing market is a mess for everyone but the affluent: over the last 30 years, the state has produced half the housing it was creating in the 1960s, ’70s, and ’80s.
It wouldn’t matter so much if no one wanted to live here or if our economy wasn’t growing. But the Boston area is the place to be. Exacerbating the situation is a demographic shift: baby boomers are staying put in their suburban homes rather than downsizing, creating a housing shortage for millennials who are starting families and want to buy.
Beacon Hill didn’t pass Baker’s housing bill last year because it wasn’t bold enough. His legislation has broad support from real estate and housing advocacy groups, and while modest on paper, it would be the biggest change to zoning laws in decades.
If lawmakers can come up with something better, then let’s see it. But don’t putz around and let another session go by without housing reform. How about trying to pass Baker’s housing bill by year’s end? Speaker Bob DeLeo and Senate President Karen Spilka, you can make this happen. Think of zoning reform as a foundation to do more. If you need inspiration, look to California, which just passed a package of laws that would increase home production (such as effectively eliminating single-family zoning) and deal with displacement (statewide rent control).
Here in Massachusetts, there are consequences for inaction. An analysis done by the Metropolitan Area Planning Council of 100 cities and towns throughout Greater Boston from 2016 through the summer of 2019 found there were 146 proposed changes to zoning that involved housing production. Of those, 86 would have qualified for a simple majority vote if Baker’s bill had become law. Of those 86, 22 received a simple majority vote but failed because they lacked two-thirds support.
“I’d love to have those 22 amendments back. They would have helped us to build the housing people so desperately need,” said Marc Draisen, executive director of the council, which supports Baker’s bill.
Unlike many other cities and towns, Boston has been building homes at a good clip but not enough of them are affordable. On Walsh’s watch, the city has moved the needle on supply, creating more than 31,000 homes with another 27,000 units in the pipeline. At that pace, the city is on track to meet its goal of 69,000 new homes by 2030.
Walsh wants developers to create more middle-class housing, even if it means making less money. Talk to developers, and they will tell you that housing is expensive in Boston because construction costs are high. What if everyone took a haircut — from the city (free land) to developers (lower fees)?
Economist Barry Bluestone crunched some numbers for me to see what that would look like. It’s not pretty. Looking at the six basic costs that go into new housing (including land, infrastructure, construction, and financing), and if each component was discounted, a 2,000-square-foot single-family home would still cost about $442,000.
The median household with an income of nearly $89,000 in Greater Boston would still need to spend 41 percent of its pre-tax income on housing, far above the recommended 30 percent maximum.
Bluestone is a proponent of building a large supply of small units for students, millennials, and baby boomers, such as 300-square-foot studios, freeing up the older — and larger — homes they currently occupy.
The City of Boston, however, isn’t giving up on the idea of creating middle-class housing.
“There is never going to be enough public resources to solve our housing problems. We need the market to help shape a response,” Sheila Dillon, the city’s housing chief, told me last week.
More pointedly, she said, “How can the market respond without public resources?”
To that end, Dillon will work with chamber president Jim Rooney and meet with developers to take a new look at an old problem.
One obvious opportunity is the 12 acres in South Boston the state is slated to return to the city as part of a scaled-back expansion of the convention center. The city, under Mayor Tom Menino, had assembled much of the land by eminent domain for the convention center.
Getting housing built in South Boston has been notoriously difficult. Just ask developers Hilco and Redgate Capital Partners. Their plans to redevelop the former Boston Edison power plant were slashed from nearly 1,700 units to 750.
Dillon isn’t fazed. That part of Southie by the convention center is close to public transit and could become a new middle-income neighborhood.
“I’m excited about that,” she said.
Like transportation, the housing crisis has also reached a tipping point. It’s time for everyone to get serious about solving it.