I have been reading the Greater Boston Housing Report Card (warning, PDF file), released earlier this year by The Boston Foundation.

The report includes a bunch of data about renters and homeowners in the Greater Boston metropolitan area.

I am finding fault with their conclusions, however.

First, they don’t do a very good job of separating the state of housing in the city of Boston from the state of housing throughout the Commonwealth.

In some cases, I don’t think they’re comparing apples to apples.  A lot of times they say “Boston, MA” but they really mean “Greater Boston”, which includes places like Chelsea and Weston, two towns that couldn’t be any more different, from each other, and from Boston.

Here is one very glaring example of how they are using accurate data to draw a meaningless conclusion:

Boston:

estimated median household income: $45,482
median single-family house price: $370,000
maximum home price affordable to median income household: $206,737
maximum home price affordable to first-time homebuyer: $137,069

Okay, that sounds bad.  The median income (half of all households above, half of all households below) is $45,482.  If a person should only be spending 33% of his/her gross income on housing costs, then that person could only afford to buy a $206,737 home, but the typical single-family home costs $370,000!  I can’t argue with that data – or can I?

Here’s where the authors of the study mess up.  First, Boston Proper is almost all condos, with a sprinkling of single-family homes that cost $1,250,000 or more.  The outside neighborhoods (Hyde Park, Roslindale, West Roxbury) are made up almost exclusively of single-family homes that cost $300,000 – $500,000.  Likewise, those living in the downtown condos may make significantly more in salary than those in the “outer-boroughs”.

You cannot lump all those neighborhoods together if you want to get an accurate picture of the cost of housing.  You cannot lump all those neighborhoods together if you want to get an accurate picture of the median income.  You cannot lump all those neighborhoods together if you want to get an accurate picture of what it takes to buy a home in Boston.

Here’s a bigger mistake

taking median household income and using it to determine whether or not someone can afford to buy the median-priced home.  How many households in Boston are in government-subsized housing developments?  I think it is over 30,000.  You cannot include these residents’ incomes when determining median household income, because 1) they are receiving public assistance (food stamps, WIC) and, 2) their rents are either subsidized or paid for by the city or state (section 8 vouchers).  You have to remove these people from your pool (sorry, could someone send me the right words to use when discussing statistics?).  Otherwise, you skew your results.

If you want to do an analysis of income to housing costs, you have to use accurate data, accurately.

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