Scott Van Voorhis
Not everyone wants to live in an apartment or condominium. In fact, plenty of people, young families included, still want that suburban home with the white picket fence but find themselves boxed out by a dire shortage of listings in the Boston area, victims of ridiculously restrictive local zoning rules designed to block out all new construction other than McMansions.
But the experts and activists who shape housing policy for our state take a very different view. Yes, there’s a housing crisis, but the big problem isn’t due to years of underbuilding when it comes to single-family homes. Rather, we need more apartments everywhere, with multifamily housing representing the future of the Boston market, as Millennials opt for urban living.
Of course, many who have tried to buy a home on a middle-class budget in the Boston area in the past decade or two may wonder if the big problem isn’t really a dearth of cool new apartments for footloose Millennials, but rather a complete lack of basic starter home that can be found in so many other American cities.
It is nothing short of a blind spot, and it is on full display in the latest Boston Foundation report on the region’s housing market.
A Multifamily Future
The title of the Boston Foundation report – the 2016 Housing Report Card – suggests a broad look at all parts of the region’s housing market. And to be fair, for the most part, it delivers.
However, the product of economist Barry Bluestone and other top state and nonprofit housing experts raises alarm bells over the slowing construction of new apartment housing while making just a passing mention that new home construction – or more accurately building permits – are up slightly.
There is significant discussion of rising home prices, declining homeownership rates and the plight of the poor, in one of the nation’s most expensive metro markets to live in.
But by far the major focus is new apartment construction, both market rate and affordable, with the report raising a big red flag over a projected 32 percent decline in the number of building permits issued for larger rental projects.
Most of the decline in permitting activity can be found in the region’s urban core – Boston, Cambridge and Somerville, the Boston Foundation report notes.
The drop, in turn, suggests the luxury rental market may be peaking, with developers struggling to get projects aimed at middle-class renters off the ground.
Yet you won’t find a single section in the 102-page report that deals with single-family home construction and the serious NIMBY challenges builders face trying to get new subdivisions approved – or the fact that new home construction in the Boston area and the state is just a fraction of what is was in the ’80s and ’90s, the last time it close to the national average.
There is some mention that permits for new single-family homes in outer suburbs are up, but that’s about it.
The reason for the seemingly major omission becomes apparent on a close reading of the report, which declares multifamily living, not the single-family suburban home, to be the future of the Boston area housing market.
“Throughout the region, permitting … is notably weak for the type of housing most needed by our young adults and aging Baby Boomers: multifamily units,” the report notes. “Ironically, permitting is slightly elevated for the one form of housing that will likely have less future demand: single-family homes.”
A Skewed Picture
As always, demographic changes – rising Millennials and hordes of retiring Baby Boomers – are cited as the reason for the need for tens of thousands of new apartments across the Boston area over the next few years.
However, a housing policy push centered on building new apartments for the very young and the very old, while all but dismissing the need for single-family homes, the type of housing most attractive to families with children, is missing a major piece, to say the least.
In fact, the 20-something Millennials and 70-something Boomers have an advantage that their Gen-X counterparts do not: mobility.
Sure, it would be nice if retiring Boomers with big suburban homes can find a nice new apartment nearby to downsize to, though the wealthiest of the aging “Me” generation are already doing a fine job snapping up multimillion-dollar condos in Boston’s growing number of uber luxury towers.
Still, it is a demographic, which, as it moves into retirement, will find it has a much wider geographic range to roam when it comes to selling their suburban digs, with no longer the need to stay within a 45 minute radius of a job out on 128 or in downtown Boston.
Likewise, young Millennials just starting out in a career are likely to find a way to stay if they find a job with potential, even if rents are steep.
But more rental housing does nothing for those older Millennials who have started to clamber up the career ladder and are starting to put down roots, or, for that matter, middle-aged Gen Xers with children who may want to move up from that cramped starter home.
For years now there has been little new construction inside 128 and even 495 of more moderately priced homes that would be attractive to the legions of young couples and families that make up the very large middle of the housing market.
(The only exception is towns like Needham and Wellesley where older capes, ranches and colonials are steadily being torn down to make way for $1.5 million and up McMansions.)
If you are trying to stay under $300,000 and not wind up in Brockton or Worcester, it can be a bleak market filled with run-down handyman specials and ugly homes worn out by decades of neglect.
A good part of that blame can be found in local zoning rules that require ridiculous 1, 2 or even 3-acre lots, ensuring that any new home that gets built will be very, very expensive while also chewing up valuable woodland and open space. It’s not a recipe for building lots of badly needed homes.
The shift in the latest housing numbers – toward more single-family construction and fewer new apartment projects – also calls into question the core premise of the Boston Foundation report that the future and market demand on the side of multifamily housing.
While there has been a small uptick in new home construction in Boston and its closest suburbs, it is more substantial when some of the outer suburbs and the rest of the state are taken into account.
Statewide the number of permits new single-family homes is up 11.7 percent in 2016 through the end of October compared to the year before, with a significant jump in new construction in towns along the I-95 Boston to Providence corridor, census bureau figures show.
This increase, which comes alongside record numbers of home sales and home prices that have shot past their bubble years peaks in many suburbs, certainly seems to me like evidence of strong demand for single family homes.
Now it’s certainly possible that the 32 percent drop in permits for new apartments in buildings with five or more units simply reflects a drop in demand for luxury units, as the Boston Foundation suggests.
Yet, as rents start to decline and stabilize in some Boston neighborhoods and big new apartment communities pop up in the suburbs, is it not possible that we are reaching a saturation point? Are we simply running out of people whose ideal living arrangement is a renting an apartment as opposed to a Cape, a ranch or a Colonial?
It’s just a thought. But to truly come to grips with Greater Boston’s long-standing, chronic housing market problems we’ve got to do a lot more than just blindly build apartments.
