1. The Greater Boston Housing Report Card 2006-2007
Bonnie Heudorfer and Barry Bluestone
with Chase Billingham and Lauren Nicoll
Prepared by the Center for Urban and Regional Policy (CURP)
Northeastern University
for
The Boston Foundation
and Citizens’ Housing and Planning Association (CHAPA)
October 2007

2. Key Points The Greater Boston Economy Demographic Change
Housing Prices and Rents
Housing Affordability
New Housing Production
Factors Driving Housing Prices
Foreclosures
Affordable Housing Production
Public Support for Housing

3. Economic Activity Index: Massachusetts vs. U.S. (1993-2007)
January 1993 – October 2001
Leading the Nation
October 2001 – June 2007
Lagging the Nation

4. Total Massachusetts Non-Farm Employment

7. Population Decline
Between 2000 and 2005, the five counties that make up the Greater Boston region lost more than 136,000 people (3.42%).
Since 2000, Massachusetts has suffered a net domestic out-migration of over 280,000 residents.
This outflow of people has been softened only somewhat by the arrival of about 186,000 foreign immigrants.

8. Massachusetts Domestic Net-Migration and Foreign Immigration
Population Decline
Massachusetts Domestic Net-Migration and Foreign Immigration

9. Population Decline
Percent Change in Population by Age Cohort, Massachusetts v. U.S.,

10. Flat or Falling Incomes in Greater Boston . . .
Year
2000
2002
2004
2005
% Change
Real Median Household Income
$62,481
$65,569
$64,060
$62,462
-0.03%
Real Median Homeowner Income
$80,995
$82,925
$80,936
$81,886
1.10%
Real Median Renter Income
$38,780
$39,602
$39,762
$35,748
-7.82%
Families Below the Poverty Line
59,913
58,882
68,687
68,038
+13.56%

11. Yet, Housing Costs Remain High
Median Price of Single Family Homes and Condominiums
: -6%
: +61%
: +156%

12. Effective Rents
Bar chart from Reis 1990 – 2007:I by year

13. Shift to Higher Rents
Erosion of Low Cost Rentals
41.2% of apartments rented for more than $1,000 per month in 2005.
In 2000, only 18.8% were this expensive.

14. Housing Affordability in Greater Boston
2000
2005
Renter Households paying >30% of Income
39.2%
50.1%
Renter Households paying >50% of Income
18.4%
25.0%
Owner-Occupied Households paying >30% of Income
26.7%
39.3%
Owner-Occupied Households paying >50% of Income
9.0%
13.9%

15. Housing Production in Greater Boston
Single Family v. Multifamily Building Permits in Greater Boston
Year
Total Units
% Change from Prior Year
Units in Single Family Structures
Single
Family as %of Total
Units in 2-4 Unit Structures
Units in 5+ Unit Structures
1998
10,846
8,639
79.7%
574
1,633
1999
10,662
-1.7%
7,775
-10.0%
72.9%
746
2,141
31.1%
2000
10,342
-3.0%
7,102
-8.7%
68.7%
701
2,539
18.6%
2001
9,701
-6.2%
6,313
-11.1%
65.1%
686
2,702
6.4%
2002
9,520
-1.9%
6,408
1.5%
67.3%
764
2,348
-13.1%
2003
12,121
27.3%
6,020
-6.1%
49.7%
1,093
5,003
113.1%
2004
13,556
11.8%
7,000
16.3%
51.6%
994
5,562
11.2%
2005
15,561
14.8%
7,270
3.9%
46.7%
1,015
7,276
30.8%
2006
13,759
-11.6%
5,429
-25.3%
39.5%
1,224
7,107
-2.3%
2007 est.
9,950
-27.7%
4,094
-24.6%
41.1%
713
5,228
-26.4%

16. Recent Sales and Price Changes
Change in Massachusetts Home Sales and Price by Quarter (Year over Year)
Quarter
# of Sales
Median Price
1Q 2005
4.5%
11.8%
2Q 2005
-5.4%
6.4%
3Q 2005
-1.5%
5.7%
4Q 2005
-8.1%
1.5%
1Q 2006
-6.5%
-0.9%
2Q 2006
-10.6%
-1.3%
3Q 2006
-23.4%
-4.9%
4Q 2006
-14.5%
-2.9%
1Q 2007
2.8%
-1.1%
2Q 2007
-1.4%

17. Vacancy Rates Homeowner Vacancy Rates, Boston Metro v. U.S.
Rental Vacancy Rates, Boston Metro v. U.S.

18. National Average 30-Year Mortgage Rates (January 2000 – July 2007)
Interest Rates
National Average 30-Year Mortgage Rates (January 2000 – July 2007)

19. Prime and Subprime Mortgage Delinquencies,
Rising Foreclosures
Prime and Subprime Mortgage Delinquencies,
Massachusetts v. U.S.

20. Rising Foreclosures in Greater Boston
2007 (estimate): 15,055

21. Affordable Housing Production
The Commonwealth has continued to produce affordable housing at a rather strong pace, down only slightly from 2005.
New Affordable Housing Production
Year
New Affordable Units
New Homeownership Units
Affordable Homeownership Units
New Rental Units
Affordable Rental Units
Units that count on Subsidized Inventory (40B list)
2002
1,427
815
246
1,681
1,181
1,927
2003
1,889
1,512
510
2,758
1,379
3,268
2004
1,997
2,006
638
3,160
1,359
3,798
2005
2,508
3,095
1,205
2,931
1,303
4,119
2006
2,422
2,124
775
2,890
1,647
3,665

22. 40B Housing Production
However, in producing this supply of affordable housing, Massachusetts has become increasingly dependent upon the 40B Comprehensive Permit.
In a softening market, tools like 40B are less effective, as fewer developments are proposed.
Through July 2007, only thirteen 40B site approval requests were submitted to DHCD, a 55% decrease from the same period in 2004.

23. Tools for Building Affordable Housing
Affordable Housing Production by Type of Public Support,

24. (Un)Affordable Communities in Greater Boston
Affordability has increased slightly in the region since 2005.
Still, only six communities in Greater Boston – Bellingham, Blackstone, Bolton, Southborough, Stow, and Townsend – are affordable for a typical first-time homebuyer in 2007.

25. Number of Affordable Communities
Summary of Affordability Gap Analysis
Year
Communities Affordable to Median Income Homebuyer Purchasing Median Priced House
(20% down payment)
Percent Affordable
Communities Affordable to First Time Homebuyer Earning 80% of Median Purchasing House Priced at 80% of Median
(10% down payment)
1998
148
92%
116
72%
2000
101
63% 87
54%
2001 86
53% 42
26%
2002 77
48% 17
11%
2003 59
37% 5 3%
2004 27
17% 1
<1%
2005 19
12% 0%
2006 30
19%
2007* 46
29% 6 4%

26. State Support for Affordable Housing
The Commonwealth’s support for affordable housing has grown every year since 2004, even as the Federal government has cut back support.
Funding from the state’s operating budget for DHCD programs rose another $17 million in FY 2008.
Much of this increase went toward improving public housing.

27. State Support for Affordable Housing
Total DHCD Spending,
Total State Funding for Housing,

28. Chapter 40R/40S Update
As of July 2007, 16 communities in Massachusetts towns not located in the region, have approved Chapter 40R “Smart Growth” districts. More than 30 others are considering such districts.

30. Chapter 40R Communities Amesbury Brockton Chelsea Dartmouth Grafton
Haverhill
Kingston
Lakeville
Lunenburg
Lynnfield
Natick
North Andover
North Reading
Northampton
Norwood
Plymouth
Total: 5,813 Units

31. Meeting New Paradigm Targets
Category
Target Production
2002
2003
2004
2005
2006
Change
Market Rate
14,000
8,093
10,232
11,559
13,053
11,337
-1,716
% of Need
57.8%
73.1%
82.6%
93.2%
81.0%
-13.1%
Subsidized New Construction
3,000
1,427
1,889
1,997
2,523
2,422
-101
47.6%
63.0%
66.6%
84.1%
80.7%
-4.0%
Student Housing
1,000
429
516
357
581
880
299
42.9%
51.6%
35.7%
58.1%
88.0%
51.5%
Total, 3 Categories
18,000
9,949
12,637
13,913
16,157
14,639
-1,518
55.3%
70.2%
77.3%
89.8%
81.3%
-9.4%
Estimated 2007 Production Percent of Target: 55%

32. Conclusions
The “Perfect Storm” – Anxious homeowners, declining production … but no improvement in affordability
The weak economy is linked to the continuing housing crisis
We still have a lot to do to get us back on track to economic prosperity equitably shared