Although the Boston housing market has experienced fewer foreclosures and increased housing production in 2013, rising home prices and a lack of affordable housing supply could challenge the market’s recovery, according to a new report.
Barry Bluestone, lead author of the Greater Boston Housing Report Card released on Oct. 10., said more multi-unit home construction would help Boston’s housing affordability problem.
“After a long drought of very little production, falling prices, lots of foreclosures, we seemed to have come out of the housing crisis,” he said. “On the other hand, we have a very serious affordability problem and that is because when home prices rise and with rent continuing to rise, household incomes have become stagnant or, for many families, declining. So, the cost of housing has increased for a large segment of the Greater Boston population.”
An influx of young professionals, college students and graduates strengthened the need for more multi-unit housing, according to the report. Bluestone said this increase in residents is an underlying factor causing the affordability gap.
“With so many students and young alums bidding for this housing stock, it drives up rent prices tremendously, forcing families and older households either to pay a huge amount of their income for rent or to leave Boston,” he said.
Dan Richard, professor of economics at Tufts University, said the affordable housing issue is a matter of income equality.
“The solution would be addressing inequality by focusing on the taxation system and education system,” he said. “We need to address job creation so people of lower incomes can move up the ladder and afford better housing.”
Bluestone said he and his team are in the process of uniting with Boston-area universities to create housing for young professionals and college students.
“Our project is to have them begin to work with private developers to build housing primarily for graduate students,” Bluestone said. “The universities and major hospitals can team up with private developers to build housing like apartments, leaving the older stock for older households.”
Despite the affordability issue, Bluestone said his positive findings are not overshadowed by the problem.
“In Greater Boston, you can certainly build new, very high-end housing for very wealthy people … and it’s still possible to have housing for low-income households because you have public housing,” he said. “We can take care of rich people, and to some extent, we can take care of poor people. What we do a bad job [of] is to keep affordable housing for everybody in between.”
Some residents said they are concerned about finding affordable housing in Boston
“The average Bostonian is barely skimming by,” said Viola Gonzalez, 66, resident of Boston. “The thing that concerns me the most is that usually affordable housing is located in neighborhoods that are less than safe, especially for someone like me at my age.”
Gonzalez says that she does not imagine a change in prices in the future.
“I don’t see it reasonably happening,” she said. “I wish it could. You could always hope.”
Ty Carleton, 23, resident of Boston, said he was lucky to find cheap housing.
“The great thing is that Boston is small enough that even if you’re looking for cheaper housing, you can still be proximate to the Financial District, Back Bay and the business district,” he said. “Unlike New York, where if you’re not making that much money, you’re going to be commuting all the time.”
Mark Monjeau, 24, resident of Boston, said the city has done a good job of keep housing prices reasonable for his demographic.
“For someone like me, entry-level, places like Brighton and Allston are not too bad,” he said. “It’s not too expensive.”