Greater Boston’s so-called “building boom” may be winding down. That’s not good news for the thousands of newcomers who arrive each year needing housing or for the many existing residents who spend more than half their income on it.
The Boston Globe recently reported that housing construction in the region may have reached a peak, citing declining numbers of building permits issued. The Globe article also reported that larger mixed-use projects — those containing buildings with both commercial and residential uses — were choosing to delay completion of the residential portion of the projects until the commercial spaces were generating income.
Around 59,000 units have been built since 2015, according to the Globe, leaving Boston 10,000 units short of Mayor Martin Walsh’s goal for 2030 — a goal that was revised upward only a few years ago because of faster than expected population growth in the city.
It is not just Boston, but the entire region that is falling behind on meeting predicted housing needs. The Metropolitan Area Planning Council predicted in 2014 that the Boston region may need as many as 400,000 new homes by 2040 (a figure that does not take into account the existing homes expected to go on the market as baby boomers retire, downsize, move away, or pass on.
According to the 2019 Greater Boston Housing Report Card, half of the housing in Greater Boston was built before 1960 and almost 25 percent before 1920, statistics that are unique among major metros. (In Philadelphia, which is comparable to Boston in age, 50 percent of the housing dates to before 1970 and only about 10 percent to before 1920. In Seattle and in Washington DC, which have roughly the same population as Boston proper, 50 percent of the housing was built before 1980 and only about five percent before 1920.) Boston’s high percentage of older housing is indicative of tight constraints on the supply side. It shows just how little building gets done in the region and is one reason why pro-housing activists view the characterization of officials and journalists that the last few years have seen a “building boom” as a bit of a joke. Another indication that supply remains constrained is that the vacancy rates for ownership (one percent) and for rentals (three percent) are both around half of what the report’s authors believe would indicate stability with respect to both.
The Globe reported that the slowdown in construction is the result of three factors: the high cost of land in Boston proper, high construction costs across the region, and restrictions on development in the suburbs. Cities like Malden and Revere have imposed moratoria on new multifamily construction, while opponents of new housing in Newton are attempting to use a ballot initiative to overturn the city’s approval of the redevelopment of a disused industrial site into housing.
To put things into perspective, The Greater Boston Housing Report Card 2019 reported that 43 percent of new multifamily housing in the entire Commonwealth of Massachusetts since 2014 was built in the City of Boston. Not in the Boston region, but in the city itself.
While suburban zoning rules are well-known for driving up housing costs, other regulations also play an important role. For example, Boston and its suburbs still require developers to build off-street parking, even in places where it makes absolutely no sense, such as across the street from a major train station, or actually on top of one. Not only does this encourage people to own cars, worsening the traffic that causes many people to oppose new housing, but it also drives up construction costs. A parking space can cost as much as $20,000 to build.
Then there is the approvals process itself, which is lengthy and complex. In Boston, projects must be approved by both the Boston Planning and Development Agency and the Zoning Board of Appeals, as well as receiving separate approvals that plans meet building and fire codes. Projects within one hundred feet of a park must be approved by a Parks Department commission. Ad infinitum. In 2018, the National Association of Home Builders and the National Multifamily Housing Council produced a study estimating that between 30 and 40 percent of the costs of a housing development could be attributed to complying with regulations. In Seattle, the Sightline Institute estimates that “every month’s delay costs as much as building and throwing away a free apartment.” The real estate listings service Trulia estimated that between 1996 and 2016, the average project in the Boston metro area took nine months to approve. It would not be surprising, based on my experience, if that average has increased since this estimate.
The community process that projects are subjected to also plays a role in making projects unaffordable. While it is only advisory, the zoning and planning boards and elected officials believe that the input of community groups echoes community sentiment (the fact that community groups are rarely representative of the neighborhood is another issue), so developers frequently work to appease the groups by decreasing the number of apartments allowed. Community groups also frequently work to increase the size of apartments, opposing studios and one-bedroom units out of a misguided fear of “transients,” and demanding “family-sized” three- and four-bedroom apartments. In practice, this just means that three or four single young professionals end up pooling their incomes as roommates to outbid families with only one or two incomes.
The best ways for policymakers to address the region-wide construction slowdown is to reduce barriers to housing growth: liberalize zoning in Boston’s suburbs (especially around train stations), permit buildings with more units to allow developers to take advantage of economies of scale, permit buildings with a greater variety of units that satisfy demand across multiple market segments, streamline the approvals process, and eliminate expensive requirements to build off-street parking.
Matthew Robare is a freelance journalist based in Boston.
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