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Issues of supply, affordability, and equity all contribute to an ongoing housing crisis in Massachusetts. Among U.S. metro areas with knowledge-based industries, metro Boston ranks near the bottom in housing production and near the top on development costs. Due to the latter, production of new affordable housing units has scarcely increased over the past decade. And largely decentralized authority over land use regulations, by 351 cities and towns, does little to foster uniform housing equity standards.
Clark Ziegler in MassBENCHMARK Journal vol.21 issue 1
For more information on the challenges of supply, affordability and equity, see the article. Clark Ziegler is the Executive Director of the Massachusetts Housing Partnership.
Written by Guest Writer
A study by Elise Rapoza and Michael Goodman shows that new housing construction in MA does not have an adverse affect on municipal or school budgets. And when it might, state funding covers the difference. This study contradicts the often heard argument against new housing development, especially multi-family housing, because it, the argument claims, it will have a negative fiscal impact on communities.
In the aggregate, development of new housing offers net fiscal benefit to both municipalities and the state. Additional analysis validates a second study which found that increased housing production does not predict enrollment changes in Massachusetts school districts. In the new study, a distinct minority of municipalities did incur net fiscal burdens—burdens that the net new state tax proceeds associated with the development of new housing are more than sufficient to offset.
Written by Guest Writer
(DRAFT – 7/11/2019)
Overview
Arlington Planning Department officials report on options for the Town to mitigate the effects of housing demolitions and housing replacements in neighborhoods.
Evidence suggests that lack of appropriate regulatory policies have led to incidences of “mcmansions” and other issues that concern neighborhood residents. This study looks at the data, the policy and regulatory options for Arlington. It also looks at how comparable nearby communities have managed similar circumstances.
This 42 page report covers a great deal of data and analysis of homes by zoning district, gaps in the effectiveness of the current regulatory structure, affects on affordability in Arlington by zoning district, information on housing prices and sales, etc.
“Best practices” include descriptions of demolition delay, expansion of local historic districts, neighborhood conservation districts, design review standards and guidelines and possible revisions to the regulatory framework in Arlington. The report also includes interesting case examples of how comparable communities near Arlington handle these issues.
This report was presented to the Arlington Select Board on July 22.
Read the complete report and see the available data and tables.
Written by Guest Writer
A few days ago, the Boston Globe ran an article titled “2021 set records in Boston Housing Market. What now?“. It’s not unusual to see stories about housing in the news — the market is highly competitive and the sale prices can be jaw dropping. Jaw dropping can take several forms: from the new (and used) homes that sell for over two million dollars, to the amount of money that someone will pay to purchase a small post-war cape (around $900,000, give or take).
According to the globe article, the Greater Boston Association of Realtors estimates that the median price of a single family homes in the Boston area rose 10.5% in 2021, to $750,000. Arlington is comfortably in the upper half of this median: according to our draft housing production plan the median sale price of our single family homes was $862,500 in 2020, and rose to $960,000 in the first half of 2021 (see page 39).
In June 2021, I got myself into a habit of sampling real estate sales listed in the Arlington Advocate, and compiling them into a spreadsheet. My observations are generally consistent with the sources cited above; Arlington’s housing is expensive and it’s appreciated rapidly, particularly in the last 6–10 years. It’s a great time for existing owners, but less so if you’re in the market for your first home.
We’re actually facing two problems, which are related but not identical. The first is high cost, which creates financial stress and a barrier to entry (though it is a boon for those who sell). The second problem is quantity; there are regional and national housing shortages, and that contributes to high prices and bidding wars.
Addressing these challenges will require collective effort on behalf of all communities in the metro area; this is a regional problem and we’ll all have to pitch in. There isn’t a single recipe for what “pitching in” means, but here are some for what communities can do.
First, produce more affordable housing. Affordable housing is a complex regulatory subject, but it basically boils down to two things: (1) the housing is reserved for households with lower incomes than the area as a whole, and (2) there’s a deed restriction (or similar) that prevents it from being sold or rented at market rates. Affordable housing usually costs more to produce than it generates in income, and the difference has to be made up with subsidies. It takes money.
Second, simply produce more housing. This is the obvious way to address an absolute shortage in the number of dwellings available. Some communities have set goals for housing production. Under the Walsh administration, Boston set a goal of producing 69,000 new housing units by 2030. Somerville’s goal is 6000 new housing units, and Cambridge’s is 12,500 (page 152 of pdf). To the best of my knowledge, Arlington has not set a numeric housing production goal, but it’s something I’d like to see us do.
Finally, communities could be more flexible with the types of housing they allow. Arlington is predominantly zoned for single- and two-family homes. The median sale price of our single family homes was $960,000 during the first half of 2021, and a large portion of that comes from the cost of land. That’s the reality we have, and the existing housing costs what it costs. So, we might consider allowing more types of “missing middle” housing, where the per dwelling costs tend to be lower: apartments, town houses, triple-deckers, and the like.
Of course, this assumes that our high cost of housing is a problem that needs to be solved; we could always decide that it isn’t. In the United States, home ownership is seen as a way to build equity and wealth. It’s certainly been fulfilling that objective, especially in recent years.
Written by Steve Revilak
I recently came across a report from Arlington’s Department of Planning and Community Development, titled “Overview of Affordable Housing Challenges and Opportunities”. The report begins:
Greater Boston’s revitalization is provoking an unexpectedly severe housing challenge in Arlington. Throughout eastern Massachusetts, growth in regional demand has caused housing prices to soar. Additionally, Arlington’s neighborhood stability and recently improved accessibility makes the town particularly attractive. While this is an initial boon for property owners, it harms others.
The surge in demand and resulting tight housing market have restricted residential choice, currently locking many households into existing living situations, even as they enter new lifestages and their needs change. Although all income levels and types of households are affected, these changes tend to hit tenants harder than homeowners especially the elderly, the poor, young singles, along with growing families, minority groups, and those with special housing needs.
This report was commissioned for Arlington’s Fair Housing Committee, and presented to them in February 1988. Despite being written 32 years ago, it’s quite descriptive of the housing challenges facing Metro-Boston — and Arlington — today. These challenges include rising home prices, conversion of rental properties into condominiums, the phenomenon of being “house rich and cash poor”, pressures of speculation, and insufficient new housing production.
Figure F from the report provides a summary of what was required to purchase a median-value home in Arlington. I’ve reproduced the table here, with a few small adaptations.
| 1970 | 1980 | 1986 | |
| median value | $30,000 | $62,700 | $169,000 |
| 20% downpayment | $6,000 | $12,540 | $33,800 |
| Mortgage | $24,000 | $50,160 | $135,200 |
| Interest | 8.25% | 13% | 12% |
| Monthly Principal & Interest | $180.29 | $559.95 | $1391.21 |
| Monthly Real estate taxes | $75.00 | $110.00 | $140.00 |
| Total monthly cost | $255.59 | $669.95 | $1531.21 |
| Annual income required | $10,491 | $28,780 | $65,623 |
Here’s the same table, where all values are converted to 2020 dollars [1], and where I’ve added a column for 2020 [2].
| 1970 | 1980 | 1986 | 2020 | |
| median value | $204,739 | $207,902 | $397,784 | $771,900 |
| 20% downpayment | $40,948 | $41,580 | $79,557 | $154,380 |
| Mortgage | $163,791 | $166,322 | $318,227 | $617,520 |
| Interest | 8.25% | 13% | 12% | 3.25% |
| Monthly Principal & Interest | $1,230 | $1,857 | $3,275 | $2,687 |
| Monthly Real estate taxes | $511 | $365 | $330 | $711 |
| Total monthly cost | $1,741 | $2,222 | $3,605 | $3,398 |
| Annual income required | $71,597 | $95,429 | $154,460 | $135,920 |
This is an interesting comparison. Buying a house in Arlington today is actually less expensive than it was in 1986 (i.e., the annual income requirement is 12% less), but this is predominantly due to today’s lower interest rates. That said, the income threshold is significantly higher than it was in 1980 or 1970. (The report’s introduction refers to 1970’s home prices as belonging to a “bygone era”.)
What solutions were proposed in 1988? The ideas put forward included transfer taxes, accessory apartments (aka accessory dwelling units or ADUs), and encouraging models for cooperative ownership. While I’m unsure of what may have been done to encourage cooperative ownership, I’m pretty certain that the transfer tax and ADU options were never implemented. At the very least, they’re not a part of today’s bylaws.
Between 1975 and 1991, Arlington’s Town Meeting voted in favor of a series of downzonings, and I believe the general sentiment during this period was one of anti-growth/anti-development. Apparently we studied the town’s changing demographics and increasing cost of housing, recognized there was was a problem, but never acted on the recommendations.
Two of the ideas for mitigating housing cost have come back in recent years. Accessory dwelling units were proposed in the 2019 town meeting (Article 15), but defeated by a vote of 137–82 (zoning articles require a 2/3’s supermajority to pass; although the majority voted in favor, that wasn’t enough). The 2020 town meeting may have the opportunity to consider a new ADU article (Article 37), along with the establishment of a real estate transfer fee (Article 20).
Here is a copy of the 1988 report to the Fair Housing Commission.
Footnotes
[1] Inflation adjustments derived from https://www.bls.gov/data/inflation_calculator.htm
[2] The 2020 median value is the median value of Arlington single-family homes, based on 2020 property assessments. The 2020 tax rate is $11.06/mil.
Written by Steve Revilak
Prof. Christophe Reinhardt runs the MIT Sustainable Design Lab. On Nov. 25, 2019 he gave a very interesting presentation, including talk and slides, that shows a pathway to make more housing, all kinds of housing, and greater housing density both more palatable in Arlington, and actually desirable. He also stressed the importance of paying attention to housing now in order to meet the climate change challenge. Charts (starting about 10 min in) show how drastically we need to reduce our carbon footprint to reach net zero by 2050. Buildings today account for about 40% of our carbon emissions world wide. What we build today will likely be around through 2050.
Paying attention to housing design is important to create a sustainable environment.
Here is the link for the Reinhardts talk and slide show:
http://scienceforthepublic.org/energy-and-resources/designing-sustainable-urban-development
or see it on youtube: https://youtu.be/YAeCvUZmUrI
He uses research, drawn from around the world and locally, to show what measurable attributes make local communities desirable to live in and what attributes of housing make residents happy.
Key attributes for success (slide is at about 18:15 min. in presentation):
1. Economic opportunities (proximity to work opportunities)
2. High quality living (daylight access for buildings, streets, walkable, mixed use, micro-units, vibrant public spaces, organic food, fitness opportunities)
3. Sustainability (comfortable work and play and living spaces, resource efficiency)
The presentation was arranged by the Robbins Library. It was developed and recorded by Science for the Public as part of it’s lecture series.
For more information on sustainability and cities, cities and local municipalities are beginning to recognize the important linkages between urban resiliency, human well-being, and climate change mitigation and adaptation activities. https://news.mongabay.com/2019/11/how-cities-can-lead-the-fight-against-climate-change-using-urban-forestry-and-trees-commentary/ Courtesy of Science for the Public Interest Weekly News Roundup.
(For more opportunities to learn about sustainability, buildings and cities, sign up for the FREE MITx “Sustainable Building Design” online course which starts January.)
Written by Barbara Thornton
Data in a Mass Housing Partnership report shows how far behind the Boston metropolitan area has fallen in meeting the housing needs of its citizens. There are four primary categories for measuring the inadequacies: 1. Availability, 2. Affordability, 3. L0cation and Mobility and 4. Equitability. See the full report for more data and examples. Two slides are shown below.
Written by Guest Writer
The City of Somerville estimates that a 2% real estate transfer fee — with 1% paid by sellers and 1% paid by buyers, and that exempts owner-occupants (defined as persons residing in the property for at least two years) — could generate up to $6 million per year for affordable housing. The hotter the market, and the greater the number of property transactions, the more such a fee would generate.
Other municipalities are also looking at this legislation but need “home rule” permission, one municipality at a time, from the state to enact it locally. Or, alternatively, legislation could be passed at the state level to allow all municipalities to opt into such a program and design their own terms. This would be much like the well regarded Community Preservation Act (CPA) program that provides funds for local governments to do historic preservation, conservation, etc.
This memorandum from the City of Somerville to the legislature provides a great deal of information on the history, background and justification for such legislation.
House bill 1769, filed January, 2019, is an “Act supporting affordable housing with a local option for a fee to be applied to certain real estate transactions“.
COMMENT:
KK: This article suggests Arlington may be likely to pass a real estate transfer tax: https://www.counterpunch.org/2019/12/19/boston-one-step-closer-to-a-luxury-real-estate-transfer-tax/
Written by Guest Writer