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 Employment

7. 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. Population Decline

8. Massachusetts Domestic Net-Migration and Foreign Immigration

9. Percent Change in Population by Age Cohort, Massachusetts v. U.S., 2000-2005 Population Decline

10. Flat or Falling Incomes in Greater Boston... Year2000200220042005% Change 2000-2005 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 59,91358,88268,68768,038 +13.56%

11. 1995-2005: +156% 2005-2007: -6% Yet, Housing Costs Remain High Median Price of Single Family Homes and Condominiums 2000-2005: +61%

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

13. Shift to Higher Rents 2000-2005 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 20002005 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. YearTotal Units % Change from Prior Year Units in Single Family Structures % Change from Prior Year Single Family as %of Total Units in 2-4 Unit Structures Units in 5+ Unit Structures % Change from Prior Year 199810,846 8,639 79.7%5741,633 199910,662-1.7%7,775-10.0%72.9%7462,14131.1% 200010,342-3.0%7,102-8.7%68.7%7012,53918.6% 20019,701-6.2%6,313-11.1%65.1%6862,7026.4% 20029,520-1.9%6,4081.5%67.3%7642,348-13.1% 200312,12127.3%6,020-6.1%49.7%1,0935,003113.1% 200413,55611.8%7,00016.3%51.6%9945,56211.2% 200515,561 14.8% 7,270 3.9% 46.7%1,0157,276 30.8% 200613,759 -11.6% 5,429 -25.3% 39.5%1,2247,107 -2.3% 2007 est. 9,950 -27.7% 4,094 -24.6% 41.1% 7135,228 -26.4% Single Family v. Multifamily Building Permits in Greater Boston Housing Production in Greater Boston

16. Quarter# of Sales Median Price 1Q 20054.5% 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 20072.8% -1.1% 2Q 2007-5.4% -1.4% Recent Sales and Price Changes Change in Massachusetts Home Sales and Price by Quarter (Year over Year)

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

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

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

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

21. 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) 20021,4278152461,6811,1811,927 20031,8891,5125102,7581,3793,268 20041,9972,0066383,1601,3593,798 20052,5083,0951,2052,9311,3034,119 20062,4222,1247752,8901,6473,665 New Affordable Housing Production The Commonwealth has continued to produce affordable housing at a rather strong pace, down only slightly from 2005.

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, 2003-2006

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. 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) Percent Affordable 199814892%11672% 200010163%8754% 20018653%4226% 20027748%1711% 20035937%53% 2004 2717%1<1% 2005 1912%00% 2006 3019%1<1% 2007* 4629%64% Summary of Affordability Gap Analysis Number of Affordable Communities

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. Total DHCD Spending, 1989-2008Total State Funding for Housing, 1989-2008 State Support for Affordable 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. Category Target Production20022003200420052006 Change 2005-2006 Market Rate 14,000 8,09310,23211,55913,05311,337 -1,716 % of Need 57.8%73.1%82.6%93.2%81.0% -13.1% Subsidized New Construction 3,000 1,4271,8891,9972,5232,422 -101 % of Need 47.6%63.0%66.6%84.1%80.7% -4.0% Student Housing 1,000 429516357581880 299 % of Need 42.9%51.6%35.7%58.1%88.0% 51.5% Total, 3 Categories 18,000 9,94912,63713,91316,15714,639 -1,518 % of Need 55.3%70.2%77.3%89.8%81.3% -9.4% Meeting New Paradigm Targets 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