Massachusetts Economic Outlook – The Role of Housing Barry Bluestone Dean, School of Social Science, Urban Affairs, and Public Policy Director, Center.

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Presentation transcript:

Massachusetts Economic Outlook – The Role of Housing Barry Bluestone Dean, School of Social Science, Urban Affairs, and Public Policy Director, Center for Urban and Regional Policy Northeastern University Real Share Boston Sheraton Boston Boston, MA May 16, 2007

Massachusetts Employment Trends ( )

2007 Massachusetts Statistics  January-March 2007: Employment up 8,000 jobs; unemployment down nearly 32,000  Unemployment rate down from 5.3% to 4.4%  … But Labor Force down by 24,000  The drop in unemployment of nearly 32,000 may have been due to unemployed leaving the labor force or leaving the state

February , , , ,224.7 Jan ’95 – Feb ’01: +422,500 Feb ’01 – Dec ’03: -205,800 Dec ’03 – Dec ’06: +57,600 Jan ’07 – Mar ’07: +8,086

November , ,500 89,400 Jan ’95 – Nov ’02: + 52,200 Nov ’02 – Dec ’06: -100 Jan ’07 – Mar ’07: -3,700

August ,100 33,200 20,200 Jan ’95 – Aug ’02: +10,900 Aug ’02 – Dec ’06: +2,100

U.S. Bureau of Labor Statistics

Massachusetts Population Trends

U.S. Bureau of the Census

U.S. Census Bureau

U.S. Bureau of the Census

Where did they go?

The Cost of Living Challenge The Cost of Living in Massachusetts is now a barrier to Employment and Labor Force Growth

Boston $64,656 Source: Economic Policy Institute, “Family Budget Calculator, 2005” Universe: 304 U.S. Metro Areas

Greater Boston Family Budget 4 Person Family with 2 Children  Housing Costs: 7 th Highest MSA  Child Care: 7 th Highest MSA  Health Care: 7 th Highest MSA  Personal Care: 6 th Highest MSA  Fed/State Tax: 2 nd Highest MSA  Total Cost: 1 st Highest MSA Economic Policy Institute, Family Budget Calculator, 2005 Among 304 U.S. Metropolitan Areas

Top Decile: Metro Area Cost of Living Boston $ 64,656 Washington (D.C. portion) $ 61,440 Nassau-Suffolk, NY $ 60,780 Stamford-Norwalk, CN$ 60,720 Lawrence (Mass. portion) $ 59,280 New York, NY$ 58,656 Barnstable-Yarmouth, MA $ 58,236 San Francisco, CA $ 57,624 Worcester (Mass. portion) $ 55,704 Springfield, MA$ 55,320 Minneapolis-St. Paul, MN$ 54,948 Nashua, NH $ 54,852 Santa Cruz-Watsonville, CA$ 53,808 Oakland, CA $ 53,412 San Jose, CA $ 52,800 Pittsfield, MA $ 52,632 Rochester, MN $ 51,288 Monmouth-Ocean, NJ$ 50,736 San Diego, CA $ 50,088 Newark, NJ$ 49,992 New Haven-Meriden, CN $ 49,848 Honolulu, HI $ 49,824 Philadelphia (Pa. portion) $ 49,716 Boulder-Longmont, CO$ 49,596 Bridgeport, CN$ 49,272 Manchester, NH $ 49,152 Santa Rosa, CA$ 48,924 Albany-Schenectady-Troy, NY $ 48,900 Hartford, CN$ 48,684 Trenton, NJ$ 48,576 Rochester, NY$ 48,540 Economic Policy Institute: Family Budget Calculator Universe: 304 U.S. Metro Areas

A Tale of Two Cities Basic Budget 2 Parents, 2 Children Boston Monthly Housing$1,266 Monthly Food$ 587 Monthly Child Care$1,298 Monthly Transportation$ 321 Monthly Health Care$ 592 Monthly Other Necessity$ 500 Monthly Taxes$ 824 Monthly Total$5,388 Annual Total $64,656 Raleigh-Durham- Chapel Hill Monthly Housing$ 779 Monthly Food$ 587 Monthly Child Care$ 866 Monthly Transportation$ 358 Monthly Health Care$ 368 Monthly Other Necessity$ 369 Monthly Taxes$ 350 Monthly Total$3,677 Annual Total $ 44,124 A Tale of Two Cities Source: Economic Policy Institute, “Family Budget Calculator, 2005”

Boston ($1,266) Source: Economic Policy Institute, “Family Budget Calculator, 2005”

Boston MSA (-4.9%) Economic Policy Institute, “Family Budget Calculator, 2005”; U.S. Bureau of Labor Statistics Universe: 245 U.S. Metro Areas

Low CostHigh Cost Economic Policy Institute, “Family Budget Calculator, 2005”; U.S. Bureau of Labor Statistics -0.21% 0.93% -0.02% 0.84% 1.06% 0.50% 1.09% 1.98% 0.62% 2.53% Universe: 245 U.S. Metro Areas

Economic Policy Institute, “Family Budget Calculator, 2005”; U.S. Bureau of the Census Boston MSA (-5.2%) Universe: 304 U.S. Metro Areas

Economic Policy Institute, “Family Budget Calculator, 2005”; U.S. Bureau of the Census Universe: 304 U.S. Metro Areas

Massachusetts Economic Forecast

Governor Patrick’s Jobs Goal  100,000 new jobs by 2010  If the ratio of construction jobs to total remains the same, this will mean 4,400 new construction jobs  Between January and March of this year, 8,086 new jobs  That’s a decent downpayment on 100,000  If we could keep that up, we would get more than 129,000 new jobs

But we face challenges  High cost of living could shortchange business and employment growth  $1.3 billion state deficit makes new projects hard to justify  Need 30,000 new homes over next 10 years … over and above current production levels to reduce housing price appreciation  Need to find a way to reduce health care costs

More Challenges  Are cities and towns ready to permit more housing … especially for younger families?  Are we willing to be aggressive in attracting new business investment to Massachusetts?  Are we willing to challenge the way we supply health care in the Commonwealth?

Housing Progress … A Good Start  Chapter 40R and 40S (Smart Growth Zoning Overlay Districts) have been adopted by 12 Massachusetts municipalities already and …. 30 more considering passage  These new overlay districts could provide 15,000 to 20,000 new housing units  Working on new legislation to provide incentives for rezoning residential areas for small “Starter Homes” for young families.