1. Housing the Missing Middle
Karen E. Kelleher, Deputy Director NCSHA Annual Conference & Showplace Miami, September 26, 2016

2. Rising U.S. Rents Squeeze the Middle Class
Housing boom isn’t hitting Boston suburbs
By LAURA KUSISTO
May 8, :18 p.m. ET
By Tim Logan  GLOBE STAFF  MAY 14, 2016
In Boston, median asking rents have increased at an annual rate of 13.2% since 2010, far outstripping the 2.4% average annual increase in income. Mayor Marty Walsh has pledged to build 20,000 units of middle-income housing through a mix of initiatives such as rezoning neighborhoods further from the city center and offering tax breaks to developers who build more moderately priced housing.
“Nobody has figured out how to build housing the middle class can afford,” said Barry Bluestone, a Northeastern University professor who studies the region’s housing market. “We’ve got to come up with some new answers.” 2

3. City of Boston Median Income ($54,485)
Affordability Crisis
The median Boston household can’t afford median rent in any neighborhood
Median Rent:
Affordable at:
$1,362: Affordable rent for
City of Boston Median Income
($54,485)
Zillow data

4. Growing Income Disparity
Report: Boston Ranks No. 1 For City Income Inequality
In 2013 Boston’s 95/20 ratio was 15.0, and it was then the third most unequal big U.S. city. From 2013 to 2014, Boston’s poor got poorer, and its rich got richer.
There has been a reduction in middle-income Bostonians while lower-income and upper-income residents have grown dramatically 4

5. Growing Income Disparity
Draft for Policy Discussion Only
Growing Income Disparity
Half of all MA multifamily (5+ units) housing production in past decade concentrated in 10 cities & towns
207 of 351 cities & towns did not permit any multifamily housing in past decade

6. Draft for Policy Discussion Only
High Development Cost
Middle income households paying 30% of income for housing can afford a home that costs approx. $225/square foot to build
Construction Costs in metro Boston range from $200 to $500 per square foot

7. The Middle Is Shrinking
The number of middle income working households declined by 2.2%
High- and low-income working households grew by 40% and 33%
The middle income share dropped from 37% to 26%
Data Sources: U.S. Census Public Use Microdata Sample 1990 and

8. Working Households at All Incomes
26% of Working Households are Middle Income
1.3 million households
Income range of $50K - $120K, depending on household size
26% of all “Working Households”
25% of all working households are low income
25% of Working Households are Low Income
Data Sources: U.S. Census Public Use Microdata Sample

9. What are “middle Income” jobs?
Percent of Middle Income Working Households
Principal Earner 2%
Police & Fire 6%
Education & Training
37% of protective service workers head up a high-income household,
34%
Office/Admin, Management, Sales

10. Housing Shortage at All Incomes
Middle-income housing needs represent almost a quarter of the new workforce housing need over the next 15 years 10

11. Housing Shortage at All Incomes
Projected supply gap, after accounting for turnover
108,000 units
21,000 units
73,000 units

12. Decline in Household Size
Massachusetts should increase production of multifamily units to reflect demographic trends.
MAPC studies suggest 17,000 units annually
Demographic projections do not suggest a significant growth in population, but a decline in household size.
23% Decline
MAPC

13. Increase in Cost Burdens
Data Sources: U.S. Census Public Use Microdata Sample 1990 and

14. MassHousing’s Workforce Housing Program
Program Goals
Create housing options for those not served by the market or by traditional affordable housing programs—
Fuel continued economic development
Incentivize new production
Invest in diverse markets across the state

15. MassHousing’s Workforce Housing Program
$100 Million Fund
New Resources
Target 61% - 120% of AMI
Focus on Rental Production
Soft Debt - $100,000/unit
- $5 million/development
30-Year Use Restriction
Governor Baker announcing the program in May, 2016. 15

16. MassHousing’s Workforce Housing Program
Attract affordable and market developers
Set-aside $25 million for transformative projects, i.e. leverages state-owned land, TOD, housing in neighborhoods of opportunity

17. Hard Questions
How to determine the appropriate level of affordability in different markets?
How often should tenants be required to recertify?
What happens if a resident becomes over-income?
Should we fund workforce housing units required by inclusionary zoning?
How do we keep it simple enough to attract market rate developers?

18. Workforce Housing Program Guidelines available at MassHousing.com

19. Massachusetts Statewide Income Limits FY 2016
Draft for Policy Discussion Only
Massachusetts Statewide Income Limits FY 2016
Massachusetts FY 2016
Statewide Income Limits
Household Size
Area Median Income (AMI)
1 person
2 person
3 person
4 person
5 person
6 person
7 person
8 person
30%
$18,060
$20,640
$23,220
$25,800
$27,864
$29,928
$31,992
$34,056
50%
$30,100
$34,400
$38,700
$43,000
$46,440
$49,880
$53,320
$56,760
60%
$36,120
$41,280
$51,600
$55,728
$59,856
$63,984
$68,112
80%
$48,160
$55,040
$61,920
$68,800
$74,304
$79,808
$85,312
$90,816
100%
$60,200
$77,400
$86,000
$92,880
$99,760
$106,640
$113,520
120%
$72,240
$82,560
$103,200
$111,456
$119,712
$127,968
$136,224
From data prepared by the Economic and Market Analysis Division, HUD