Boston housing prices: Why they’re so high

[Jean Powers]

This was shared on Facebook by Somerville Mayor Joe Curtatone:

https://boston.curbed.com/2018/5/30/17404868/boston-housing-why-high

Boston housing prices: Why they’re so high

Poor planning, perennially high demand, and horrid commutes are just a few of the reasons

By Tom Acitelli May 30, 2018, 10:36am EDT

Boston has some of the highest home prices of any major city in America. There are multiple reasons for this. (The city also has some of the highest residential rents in the nation. Here’s why that is.)

---

Perennially high demand. Boston proper’s population has been trending upward for nearly a decade. It’s still a ways from a peak of around 800,000 in the early 1950s, but it’s more than enough to fill the new condos and houses coming online. At the same time, the populations of surrounding municipalities such as Cambridge and Somerville have also bounced recently. A corollary to this is that, because demand is so strong and prices so high, generations tend to pass down housing in the Boston area more than in some other places. Hence houses spend several decades or more essentially off the market.

Helioscribe/Shutterstock

Too little supply. Boston and the Boston area’s inventory of available homes has long failed to keep pace with this high demand. Despite a brisk pace of construction—particularly in Boston proper, where thousands of new condos have come online during the past decade—the need for housing continues to outstrip the supply.

Too little supply of the right kind of housing. For decades, several towns and cities in the Boston area prioritized smaller multifamily for-sale housing or single-family houses, hoovering up available parcels with structures that in the end would not shelter that many people. Even in the City of Boston, larger-scale condo developments have historically been hard to come by. The very noteworthiness of the current building boom is proof of that.

Plenty of buyers who can afford the prices. This goes back to the first point. It’s not just population growth in the Boston region. It’s that many of these new residents make the kind of coinage that allows them to afford $700,000 one-bedrooms and $2.5 million colonials. Sometimes being one of the world’s economic engines has its drawbacks.

A.Ruiz/Shutterstock

Horrid commutes. Commutes in and out of—and around—Boston have worsened in recent years. The share of Boston-area commuters who travel more than 90 minutes to and from work increased 50.1 percent from 2005 to 2016, for instance, according to a recent report. Living that much closer to the workplace to offset some of this time-sucking awfulness has helped drive the demand for housing near core commercial areas that much higher.

High barriers of entry to the rental market. Hey, if the monthly costs of renting and owning are not all that different, why not take the plunge? That line of thinking has motivated more than a few buyers here.

History—a long, familiar history. Like just about every other sizable housing market in the U.S., myriad meta-trends and milestones influenced the evolution of the Boston area’s market to this super-expensive point. These trends and events include the post-World War II suburban building boom; the so-called white flight of residents from urban areas to those fresher suburban digs; the real estate industry’s racist redlining approach (that government mandates often abetted); tax policy that favored (and favors) ownership over renting; and periods of cheap, cheap mortgage financing—such as the one we’re in now, where mortgage rates are in the low to middle single digits.

Lack of longterm planning. See much of the above.

[lizbr...@aol.com]

One major issue that drives demand for housing and contributes to our extortionate housing prices is the fact that we have so many colleges and universities that do not house their students on campus. 

The article states "generations tend to pass down housing in the Boston area more than in some other places. Hence houses spend several decades or more essentially off the market" .  This is not necessarily a bad thing - for those fortunate enough to inherit a home or part of a home this makes it possible to stay in the neighborhood, otherwise they couldn't afford to live here. 

The "horrible commutes' reflect the Commonwealth's lack of investment in mass transit over many decades. The "Big Dig" was totally focused on automobile transportation and was a missed opportunity.  With a good mass transit system workers would not need to sit in cars for 90 minutes to get to work. If we are serious about aspiring to be "world class city" then we need a 21st century transit system and we need it NOW! West Station cannot wait until 2040.  

The article seems that we should just build, build, build, luxury apartments for new people who can afford $700K for a one bedroom, but where does that leave the vast majority of workers who earn $40-60K?  We need affordable 3-4 bedroom units for families. It seems bizarre and a poor use of our resources to build one bedroom units that will sell for $700K when families are unable to find a home they can afford. It is less costly to develop affordable units than luxury units. 

Housing is a very complex problem that requires a diversified approach but at this stage of the building boom in Boston it is time to focus on affordable home ownership and affordable rental opportunities to stabilize our neighborhoods. Gentrification is driving many long time residents from the city and the Commonwealth.  That will be to the long term detriment of our communities, our businesses our diversity and cultural life of the city. 

Thats my penny worth for today.

Liz Breadon

--
To post to this group, send email to AllstonBr...@googlegroups.com
For more options, visit this group at http://groups.google.com/group/AllstonBrighton2006?hl=en
---
You received this message because you are subscribed to the Google Groups "AllstonBrighton2006" group.
To unsubscribe from this group and stop receiving emails from it, send an email to allstonbrighton...@googlegroups.com.
For more options, visit https://groups.google.com/d/optout.