Making Workforce Housing Affordable Again: A 21 st Century Approach - PowerPoint PPT Presentation

Making Workforce Housing Affordable Again: A 21 st Century Approach Greater Boston Real Estate Board/GBAR Forum Burlington, Massachusetts October 11, 2018 Barry Bluestone Northeastern University School of Public Policy & Urban Affairs www.northeastern.edu/dukakiscenter

The Problem • Greater Boston has become more successful at retaining and attracting young professionals – graduate students, medical interns and residents, and young professionals from tech savvy entrepreneurs and financial wizards to line-chefs in our best restaurants. This will help keep our region vital and prosperous … but it is causing a major housing problem for these young people and for the working families with whom they compete for housing. • To afford housing, many of these “Millennials” are doubling and tripling up, renting apartment units in what has been the region’s traditional workforce housing stock – “triple-deckers”, duplexes, and garden apartments. • As a result, working families in Greater Boston are being priced out of the rental market and cannot afford to buy into the condominium market in the older housing stock. • Given the exorbitant cost of building new “family-size” housing in the region, working families have fewer and fewer affordable housing options in Boston, Cambridge, and Somerville, let alone in many of the region’s suburbs. Dukakis Center for Urban & Regional Policy  www.northeastern.edu/dukakiscenter

Answer #1: The 21 st Century Village for Millennials • While we should continue to try to find ways of building housing affordable to working families, we need to find ways to develop a substantial amount of appropriately-sized and priced housing for the 20- 34 year old “millennials” sufficiently attractive to draw them out of the older housing stock, freeing up the older, robust stock of 2-4 bedroom housing for working families at more reasonable rents and prices. • This will take fresh thinking about the design, development, construction, and financing of this new housing … new developments which we might call “21 st Century Villages” . • To create a sufficient number of these new Villages will require a new collaboration between developers, architects, builders, the construction trades, universities, teaching hospitals, and state and local government officials. Dukakis Center for Urban & Regional Policy  www.northeastern.edu/dukakiscenter

Answer #2: The 21 st Century Village for Seniors • Beside a surge in millennials in Greater Boston, there will be a surge in aging Baby Boomers who are ready to downsize. • By providing new forms of appropriate housing for them, we can free up more workforce housing for younger families with children. • Many of these seniors need housing not unlike the housing for millennials. • The 21 st Century Village will be suitable for both age cohorts. Dukakis Center for Urban & Regional Policy  www.northeastern.edu/dukakiscenter

Meeting the Mayors’ Goals • On October 2, the mayors of 15 cities in the core of Greater Boston assembled and agreed to sharply accelerate the pace of home construction. • Arlington, Boston, Braintree, Brookline, Cambridge, Chelsea, Everett, Malden • Medford, Melrose, Newton, Quincy, Revere, Somerville, and Winthrop • The new goal: 185,000 new homes by 2030 , including 69,000 in the City of Boston. • A worthy goal … but how can this be accomplished? • We need a new approach to housing with new partners joining to meet the housing challenge • Let’s start with some history ….. Dukakis Center for Urban & Regional Policy  www.northeastern.edu/dukakiscenter

Historical Background Demographic Revolution #1 1870 -1920 Urban Development

City of Boston Population 1790-2013 801,444 800,000 748,060 1870-1920: Wave of Immigration 700,000 leads to tripling of 645,966 Boston’s Population 600,000 562,994 500,000 400,000 250,526 300,000 200,000 100,000 0 1790 1800 1810 1820 1830 1840 1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2013 Dukakis Center for Urban & Regional Policy  www.northeastern.edu/dukakiscenter

City of Boston Population 1790-2013 801,444 800,000 1870-1920: 748,060 The Solution: 700,000 645,966 The Classic “Triple Decker” 562,994 600,000 500,000 400,000 250,526 300,000 200,000 100,000 0 1790 1800 1810 1820 1830 1840 1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2013 Dukakis Center for Urban & Regional Policy  www.northeastern.edu/dukakiscenter

Demographic Revolution #2 1950 -1980 Suburban Development

City of Boston Population 1790-2013 801,444 800,000 748,060 1950-1980: 700,000 562,994 645,966 Postwar Flight 600,000 from the City 500,000 400,000 300,000 250,526 200,000 100,000 0 1790 1800 1810 1820 1830 1840 1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2013 Dukakis Center for Urban & Regional Policy  www.northeastern.edu/dukakiscenter

Percentage Change in Population for Greater Boston Municipalities 1950-1980 200% 180.6% Boston’s loss was the suburb’s gain as Central Cities emptied and suburbs blossomed 150% 112.0% 100% 70.1% 56.9% 50% 2.0% 0% Chelsea Boston Somerville Cambridge Newton Braintree Lexington Andover Sharon -21.1% -24.3% -29.8% -34.6% -50% Dukakis Center for Urban & Regional Policy  www.northeastern.edu/dukakiscenter

Demographic Revolution #3 1980-2010 Young Millennials Aging Baby Boomers

City of Boston Population 900,000 After 1980, Boston begins to grow again 801,444 800,000 Return to the City 697,197 700,000 641,071 636,479 625,087 617,594 589,141 600,000 574,283 562,994 500,000 400,000 300,000 200,000 100,000 0 1950 1960 1970 1980 1990 2000 2010 2011 2013 Dukakis Center for Urban & Regional Policy  www.northeastern.edu/dukakiscenter

Boston-Cambridge-Somerville • In 2000, 20-34 year-olds comprise 34.8% of the region’s total population • Between 2000 and 2010, 20-34 year-olds are responsible for 73.9% of the growth in the region Dukakis Center for Urban & Regional Policy  www.northeastern.edu/dukakiscenter

Triple Decker …. 1910 Dukakis Center for Urban & Regional Policy  www.northeastern.edu/dukakiscenter

Triple Decker …. 2010 … and these millennials are doubling, tripling, and quadrupling up in Triple Deckers … outbidding working families for what was traditionally working family housing Dukakis Center for Urban & Regional Policy  www.northeastern.edu/dukakiscenter

Annual Median Price of Homes in Two-Unit and Three-Unit Structures in Five-County Greater Boston Region, 2000-2016 (Through June) $500,606 $495,403 $492,182 $483,192 $500,000 $458,565 $454,028 105% Price Rise $443,084 since 2009 $412,859 $394,060 $400,000 $355,418 $347,050 $314,274 $244,172 $300,000 $275,885 $273,328 $263,289 $225,460 $200,000 $100,000 $0 Two-Unit Three-Unit Dukakis Center for Urban & Regional Policy  www.northeastern.edu/dukakiscenter

Average Market Rent Inner Greater Boston Core 2009-2016:II $3,100 $2,957 $2,900 … and persistently rising rents $2,667 $2,700 59% Increase since 2009 $2,500 $2,427 $2,367 $2,301 $2,300 $2,158 $2,100 $2,033 $1,859 $1,900 $1,700 $1,500 2009 2010 2011 2012 2013 2014 2015 2016: I & II Dukakis Center for Urban & Regional Policy  www.northeastern.edu/dukakiscenter

Pecentage Change in Greater Boston Rents (2000-2013) vs. Percentage Change in Median Renter Household Income (2000-2011) 30% Since 2000, effective rents have increased 50% 27% faster than median renter household income … 25% leading to skyrocketing housing cost burdens for Working Families 21% 20% 15% 13% 10% 5% 0% Median Renter Median Effective Rent Median Asking Rent Household Income Dukakis Center for Urban & Regional Policy  www.northeastern.edu/dukakiscenter

Rising Housing Cost Burden – Greater Boston 2000 2011 1990 2010 Renter-Occupied Households Paying More than 30% of Income 41.7% 39.2% 50.1% 51.3% on Rent Renter-Occupied Households Paying More than 50% of Income 19.6% 18.4% 25.4% 26.4% on Rent Owner-Occupied Households w/ Mortgage paying More than 30% of 28.3% 26.7% 39.5% 40.4% Income on HH Costs Dukakis Center for Urban & Regional Policy  www.northeastern.edu/dukakiscenter

Percentage Point Change in Share of All Boston Families at Various Points in the Income Distribution 1990-2010 8.0% The result: Working families with incomes between 2X ($44,000) and 5X ($110,000) forced from Boston 5.5% Pts 6.0% 4.0% 2.1% Pts 2.0% 0.0% <2X Poverty Line 2X to 5X Poverty Line > 5X Poverty Line -2.0% -4.0% -6.0% -7.4% Pts -8.0% -10.0% Dukakis Center for Urban & Regional Policy  www.northeastern.edu/dukakiscenter

Goal: Free up Triple-Deckers in the City and Homes in the Suburbs • By providing new housing opportunities for millennials, a substantial number of units in Triple Deckers and duplexes could be freed up for working families in the Inner Core cities of Greater Boston. • By providing new housing opportunities for aging Baby Boomers who currently live in larger suburban homes, we can free up more of the existing suburban housing for working families. Dukakis Center for Urban & Regional Policy  www.northeastern.edu/dukakiscenter