Lack of Housing Production Threatens Local Economy – Greater Boston Association of Realtors

High housing costs and an inadequate housing inventory threaten Greater Boston’s economic competitiveness, according to a report released last week by the Boston Foundation.

According to the report, the Commonwealth must dramatically increase production of housing that would be attractive to young families and a growing workforce. It is estimated that 18,000 units per year over the next several years are needed in the 161 cities and towns covered in the report.

According to the report, permits for all housing in Greater Boston dropped 12 percent in 2006. Single-family housing starts declined by more than 25 percent in 2006 and are predicted to decline 29 percent in 2007.

The lack of entry-level housing and rapid rise in home prices earlier this decade, has led to a reported loss of 50,000-62,000 residents annually since 2004. Many of these young professionals, ages 20-34-years-old, are leaving Massachusetts for states with cheaper housing and better job opportunities.

Doesn’t a housing market slowdown achieve the same thing? Lower prices, more inventory? In a flat but healthy economy (such as we have now?), incomes are still rising, making a homebuyer’s buying power go farther.

Plus, define “entry-level”. Some groups in the state want to force towns and cities to accept higher-density housing so that the cost of building new homes is less, and want to pass the savings on in the form of lower prices.

The best “entry-level” home? It’s not a brand-new home in the suburbs. It’s a 1960’s Colonial in Peabody, or a two-bedroom condo in Medford.

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Updated: 1st Q 2018

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