Andrew Mikula

Much ink has been spilled over the high sticker prices and low availability of housing in Greater Boston. Formerly blue-collar towns are now rife with million-dollar homes, and the cost of living in Eastern Massachusetts is a major obstacle to attracting and retaining young workers. Building more homes in the immediate Boston area is imperative to alleviating these challenges.

But in many other parts of the state, housing quality can be just as much of an issue as housing quantity. Cities like Springfield and Holyoke have many existing homes falling into disrepair because the maintenance costs exceed the rents and/or the ability of the homeowner to pay. It is also often financially unviable for the private sector to build new housing in such places because construction costs would exceed the market value of the home upon completion.

At the same time, by some measures housing affordability in Greater Springfield is worse than it is in Greater Boston. In 2022, 38.9 percent of Springfield area households paid more than 30 percent of their income in housing costs, compared to 36.2 percent in Greater Boston.

Code Requirements Don’t Pay Off

Since renovating an existing home is usually less expensive than building a new one, Springfield should focus on directly addressing the adverse regulatory conditions around refurbishing existing buildings as an avenue for reform. New research from the Pioneer Institute presents some opportunities to make such improvements easier by amending state building codes.

One issue in this regard is that, in Massachusetts, renovations of at least 30 percent of the fair market value of a home trigger a requirement to bring the entire building into conformity with the state building code.

For the 74 percent of homes in Springfield that were built before 1970, meeting modern building code requirements is often very expensive and complicated, and national studies have found that resolving a code violation does not increase a home’s sale price.

By making upgrades and repairs more difficult, building code regulations are likely contributing to a cycle of disinvestment in such neighborhoods that takes housing off the market via abandonment and thus lowers property values for everyone else.

Further, the monetary threshold for triggering building code conformity requirements in Springfield is much lower than in Greater Boston for the simple reason that home values are lower in Springfield, elevating the risk of disinvestment in areas already most prone to it.

Ending this negative feedback loop could involve reforming state building code regulations to only enforce full code conformity in new buildings. If this is not possible politically, a more targeted approach could allow property owners to opt in to more flexible building code standards in certain neighborhoods.

Determining these more flexible standards would require a deliberate process with plenty of input from life safety experts, but ultimately could help preserve Springfield’s existing housing stock and improve living conditions.

Open Doors for New Homes

Further, such a reform approach could also make it substantially easier for property owners to bring new residential uses to older, non-conforming buildings in neighborhoods where the market fundamentals support new construction. For example, it could reduce the costs to a homeowner of adding an accessory dwelling unit in their basement or detached garage.

Small-business owners could also find it more economical to add a couple of apartments above or behind their storefront, or convert their existing single-use office or home into a live/work arrangement.

This approach is well-suited to city blocks with small parcels and disparate ownership, an arrangement that otherwise makes it difficult and expensive to execute new construction at scale.

Decades of low housing demand have obscured a fundamental truth about Western Massachusetts: Public policy is contributing significantly to home blight and abandonment. In part because of regulatory requirements, maintaining or improving an existing home is too difficult for the typical property owner. Building code reform is a promising opportunity to help realign the costs of providing housing with local market realities, but it can only occur at the state level.

Andrew Mikula is the senior housing fellow at the Pioneer Institute in Boston.