Housing v. Open Space

News Nuggets: Springfield, MA, Hot Real Estate Market | HOA Holiday Hate | ADU Draft Regulations | What Interest Rate Will Move Home Buyers?

Housing Report Card Examines Utilizing Public Land for Housing

A recent report on the state of housing in Greater Boston suggests that 85,000 housing units could be constructed using just 5 percent of available public land.

The 2024 Greater Boston Housing Report Card, a collaborative effort by The Boston Foundation, Boston Indicators, and Boston University's Initiative on Cities, analyzes the region's persistent housing crisis. A "special topic" analysis examines the potential and challenges of utilizing publicly owned land for affordable housing, revealing significant obstacles such as complex regulations, lengthy permitting processes, and substantial public opposition.

The report includes policy recommendations aimed at streamlining land disposition procedures, reforming funding programs to prevent misuse, providing technical assistance to municipalities, and implementing further zoning reforms to facilitate affordable housing development.

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Greater Boston Housing Report Card 2024 Key Findings

I. Housing Market Trends and Demographics

• Population growth has leveled off, with a slight uptick in 2023 due to international immigration. (Source: Brookings)

• Greater Boston is aging. Households are smaller, and senior homeowners occupy larger homes.

• Median incomes are high, but income inequality is also very high. Homeowner incomes significantly exceed renter incomes.

• Gains in median household incomes have primarily benefited Black homeowners and Asian and Latino renters.

II. Housing Supply

• Sales of newly constructed homes have decreased over the last three years.

• The Metro Mayors Coalition (MMC) is not on pace to meet its 2030 production goal of 185,000 new units.

• Permitting activity in MMC communities declined by over 40 percent in 2023, primarily driven by a slowdown in Boston.

• "Metro Core Communities" and "Streetcar Suburbs" have permitted significantly more multi-family housing than other community types.

• Rental and homeowner vacancy rates in Greater Boston remain critically low, ranking among the lowest nationwide.

III. Housing Costs and Affordability

• Home values continue to increase, with median sales prices surpassing $1 million in 35 municipalities.

• Sales activity is depressed due to interest rate increases, but recent data suggest a modest uptick.

• A significant proportion of renters (50 percent) are cost-burdened, with persistent racial disparities for both homeowners and renters.

IV. Subsidized Housing

• Metro Core Communities provide a disproportionately larger share of subsidized housing units than other community types.

• Suburban communities are more likely to restrict subsidized housing to seniors only.

• A "concerning trend" is the prevalence of smaller units (one-bedroom or less) within the subsidized rental housing stock.

• The state's Subsidized Housing Inventory (SHI) overestimates how many below-market-rate units are available, leading to an inaccurate assessment of affordable housing availability.

V. The Use of Public Land

Availability and Potential:

• Publicly owned land constitutes almost one-fourth of the land in Greater Boston, with a significant portion vacant and not designated for conservation.

• Repurposing just 5 percent of this vacant land for housing at a density of 15 units per acre could yield over 85,000 new units, significantly addressing the region's housing shortage.

Obstacles to Development:

• Complex Regulatory Processes: The combined burden of state procurement laws (Chapter 30B) and local permitting processes creates a highly discretionary and fragmented system that hinders the redevelopment of public land.

• Public Opposition: Widespread opposition to housing development, particularly multi-family and affordable housing, poses a significant obstacle. The discretionary nature of development review processes empowers small groups to delay or halt projects effectively.

"Weaponization" of Public Land:

• The report reveals a trend where municipalities actively purchase land to prevent housing development, often in response to Chapter 40B proposals.

• "Since 2010, we identify 13 instances where communities purchased property to stop a housing development, using over $50 million in public funds, including resources from the Community Preservation Act."

• This "weaponization" of public land undermines efforts to address the housing crisis. It often results in significant financial burdens for municipalities managing these acquired properties.

VI. Policy Recommendations

• Streamline the Disposition of Public Land: The report recommends simplifying and expediting the processes for declaring land surplus and issuing requests for proposals (RFPs). The report also suggests reducing the required legislative majority for surplus land declarations and considering exemptions for transfers to affordable housing trusts.

• Provide Technical Assistance: The state could offer guidance and support to municipalities in navigating the complex process of redeveloping public land for housing. The state could assist in conducting feasibility studies and crafting realistic RFPs that attract developers.

• Streamline Housing Permitting: Another recommendation is more changes to zoning regulations and permitting processes to reduce barriers to housing development on both public and private land. The report suggests implementing a statewide affordable housing overlay to expedite approvals.

• Reform State Funding Programs: The report recommends ensuring municipalities cannot use state funding programs to obstruct housing development. Programs should align funding priorities to increase the affordable housing supply.

While using public land for affordable housing may seem promising, the idea's potential requires overcoming substantial regulatory and political obstacles. One has to look no further than the MBTA Communities Act, which requires 177 Cities and Towns to establish "at least 1 district of reasonable size in which multi-family housing is permitted as of right." The law has faced fierce opposition in some communities.

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News Nuggets

Hot Housing Market: Realtor.com named Springfield, MA, No. 1 on its hottest housing markets list for November 2024. "Springfield's hotness means that high demand is met with low inventory as buyers claim available homes," Hannah Jones, Realtor.com senior economic research analyst, wrote in her report. Homes in Springfield attracted nearly three times the national average in views per listing and sold faster than in almost any other market. The appeal of living close to Boston drives demand. According to Realtor.com, for several years, many of the No. 1 hottest markets have one thing in common: proximity to Boston.

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HOA Holiday Hate: The holidays are a time of celebrations with friends and family, presents, and homeowners association complaints. Boston.com wrote about homeowners associations facing lawsuit threats over holiday decor. One attorney said the disputes can get nasty. "'HOA law makes divorce law look amicable,' said Jason G. Mahoney, an attorney and real estate broker in Boston, told Boston.com. 'Sometimes people can get divorced and be somewhat mature about it. But in an HOA, it seems like they're always looking to settle these small scores and grievances from years past, and now they have an opportunity to exact revenge.'" Read more.

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ADU Draft Regulations: A key provision of the massive $5.16 billion housing bond bill Massachusetts Governor Maura Healey signed in August allows accessory dwelling units (ADUs), or in-law apartments, by right in single-family zoned neighborhoods statewide. ADUs can be basement and attic apartments, home additions, or small detached dwellings. There are still rules and regulations, but the new law allows more flexibility and options. The Executive Office of Housing and Livable Communities has invited stakeholders to comment on proposed Protected Use Accessory Dwelling Unit (ADU) regulations through multiple opportunities, including written comments, webinars, and a public hearing. Read "Massachusetts Home Buyers Should Know About Accessory Dwelling Units."

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What Interest Rate Will Move Home Buyers?: Television personality and real estate mogul Barbara Corcoran told Fox Business host Neil Cavuto last week that "if mortgage rates drop to anywhere within the 5 percent range, it could trigger 'incredible' homebuying activity," Realtor.com reported. Boston area home buyers with good credit saw rates around 5.875 percent for a brief period earlier in the fall. Those rates did give the market a jolt of energy at the time. Compass CEO Robert Reffkin told CNBC on Wednesday, December 18, 2024, that his company expected interest rates in the 6 percent range over the next two years.

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