With an unemployment rate of 2.6 percent, a diverse economy anchored by health and education institutions, and a flourishing tech and life sciences sector, Greater Boston appears poised for continued growth, even with the specter of a potential recession on the horizon. But, like many other growing U.S. cities, the demand for housing far outstrips the supply. Much of the expanding workforce is in danger of being priced out of the market, as are many longtime residents.
“Right now, Greater Boston is in urgent need of a pro-growth agenda that thinks about how we add hundreds of thousands of new dwelling units to the region in a way that improves the quality of life for the people who live here,” said Amy Dain, researcher and author of The State of Zoning for Multi-Family Housing in Boston, a report released in June that analyzes the zoning bylaws and ordinances of 100 cities and towns in Massachusetts. “My main conclusion is that we do not have the zoning in place to meet demand for housing or to build it in a way that is worthy of Greater Boston’s greatness.”
Dain presented her findings at the recent ULI Boston/New England program “Building the Commonwealth One Zoning Decision at a Time.” The presentation was followed by a panel discussion that included Dain, Cambridge city councilor Jan Devereux, and Matthew Kiefer, director and land use attorney at the Boston law firm Goulston & Storrs. The panel was moderated by Susan Connelly, director of community assistance and strategic partnerships for the Massachusetts Housing Partnership (MHP).
Metro Boston added 245,000 jobs from 2010 to 2017, a 14 percent increase, but cities and towns issued permits for only 71,600 housing units during the same period, accommodating growth of only 5.2 percent. The increased demand has contributed to a housing market in Massachusetts in which 25 percent of renters and 10 percent of homeowners are “extremely cost burdened,” paying over 50 percent of their income for housing, according to the State of Zoning report. In Greater Boston, housing costs rank among the highest in the nation, with apartment rents—at $2,510 per month for a one-bedroom unit, according to Zumper—trailing only San Francisco at $3,550 per month and New York City at $2,970. The median sale price for homes is nearly $430,000 in Greater Boston.
Despite the demand, the Boston metropolitan statistical area (MSA) ranks just 18th among the nation’s 25 largest metropolitan areas in housing production. In 2017, Greater Boston issued permits for about 13,000 new housing units, with multifamily units accounting for 75 percent of that total—but that number pales in comparison with historical rates. Since 2010, cities and towns in Massachusetts have issued permits for new housing at less than half the rate they did in the 1980s, when housing production averaged nearly 28,000 units per year, according to the The Greater Boston Housing Report Card 2019.
One difficulty in getting adequate levels of housing built in Massachusetts is that each of the state’s 351 municipalities has its own zoning ordinances and bylaws, the majority of which seem geared to impeding multifamily housing construction. Notable exceptions are Boston, Cambridge, Everett, and Watertown, which accounted for more than half the new multifamily housing permits issued in the region from 2013 to 2017.
“In Greater Boston over the past two decades, the whole permitting approval system from municipality to municipality has been evolving to become more discretionary, ad hoc, reactive, political, unpredictable, slow, and flexible,” Dain said. Though she said the current system has some strengths—including flexibility and encouragement of negotiations between developers and the towns—“it’s problematic for planning infrastructure and services, reducing the high cost of building, and addressing an urgent housing crisis.”
Two principal hindrances to increasing multifamily housing production is that most municipalities have very little land zoned for multifamily housing, and there is a movement away from “by right” zoning to a system of project-by-project decision-making. So, though developers could theoretically increase density in residential areas, most municipalities have restrictions regarding height and number of dwellings units per acre, particularly in town centers. As a result, projects that do get approved are often located away from existing residential areas, with former industrial sites being an increasingly popular choice. And the project-by-project decision-making process—typically conducted by town meeting or city council—has become increasingly discretionary and political in the past 15 years.
In the report, Dain makes four broad recommendations for municipalities:
- Zone more land for multifamily housing, allowing for increased density;
- Reform the approval process for flexibility and predictability;
- Allow more housing in centers (and near transit), and plan connected growth nodes on the edges; and
- Allow multifamily housing next to mixed-use hubs.
Although daunting, implementation of the recommendations is achievable, Kiefer said. “Not to say that this is an easy problem, but we have the resources to solve it because we have a strong housing market,” he said. “And while that involves some market intervention, we have the tools to solve the problem.”
Keifer pointed to Boston as a prime example. The city recently announced it had reached the milestone of 30,000 units permitted toward its goal of adding 69,000 housing units at various income levels across the city, including nearly 16,000 new units of income-restricted housing. “In Boston, housing is being built everywhere, . . . from small infill projects in the neighborhoods, to former industrial areas, to low-density retail areas that are being densified,” he said. “And that demonstrates that it can be done. You just have to have the housing market to do it.”
Cambridge is another city demonstrating that change is possible: it has 1,800 housing units under construction and another 3,500 units of approved projects in the pipeline. But Devereux acknowledges the enormous challenge faced in changing public perception of the issue.
“The communities aren’t fully aware of what the problems are and what the solutions are and how we’re all in it together,” she said. “The average person actually has no idea what zoning is and how it works, . . . so I think that the more these conversations are out there for public discussion, the easier it will be ultimately to build consensus.”
The state is also taking steps to streamline the zoning process. Governor Charlie Baker is actively promoting the Housing Choice Initiative bill. If passed, it would let cities and towns adopt zoning rules related to housing by a simple majority vote of their governing body, bypassing the current requirement of a two-thirds supermajority. The move is being widely supported by housing advocates as a key first step in increasing production of multifamily housing.
But Kiefer believes that more dramatic statewide legislative action may be warranted because it is a regional issue rather than a local one. He proposes that the state consider directing aid for projects such as school construction or transportation infrastructure to cities and towns that zone for density.
“Solutions that rely on convincing everyone that development is good for them or giving up local control are going to be difficult,” he said. “So you have to give cities and towns and voters in those cities and towns reasons to support density, because frankly, it’s not in their interest. So how to change the zoning is not the hard part. It’s how to change the politics.”