A Boston Foundation report out today paints a grim picture of a housing market with prices spiraling out of control - in which condo prices are reaching parity with single-family home prices, triple deckers are being snapped up by investors and families are struggling to stay afloat.
What has really exploded in price are the iconic "triple-deckers" in Greater Boston. Built for the most part between 1870 and 1920 when massive immigration tripled the city’s population, the median price of a single unit in a triple-decker was $244,172 in 2009. By mid-2015, the median sales price had shot up to $477,057 - an increase of 95 percent in the span of just six years. The demand for units in such buildings - driven in large part by undergraduate and graduate students, medical interns and residents and other young professionals who can pair up, triple up, and quadruple up to pay mushrooming rents - has made such housing an investment bonanza. Rental unit vacancy rates have fallen to 2.6 percent in Greater Boston, less than half the 5.5 percent that research shows is needed to stabilize rents so they rise no faster than normal inflation. Landlords compete aggressively to purchase such buildings and in doing so have pushed prices up to astounding levels.
The report says 25% of Boston-area renters now pay more than 50% of their monthly income just for housing.
Note that between 2010 and 2014, the total number of permits issued in the region was 40,735, far below the more than 67,000 new households added to the region during that same period. However, only 15,000 units of housing were actually built.
What's to blame? Land prices, especially in the suburbs, have rocketed, in part due to snob zoning, or as the report puts it, "a strong focus on preserving 'community character.'" Construction costs have gone up as well, although not as much as land costs.
What if we do nothing? Eventually our economy suffers as people who can't afford to live here go elsewhere for jobs.
The only slight glimmer of hope? Single-family homes could start coming on the market as baby boomers move away or die.
The report calls for looking at innovative ways to build housing - such as using modular construction of components built in factories - increasing state funding on affordable housing and convincing towns to donate land for new housing, and somehow, in some amazing stroke of incredible salesmanship, convincing suburban towns to allow the sort of denser multi-family development that would help families stay and attract the young workers the economy will need to survive.