Still a housing crunch

Fourth in an occasional series on issues that are important in the race for governor.

EASTERN MASSACHUSETTS is notorious for expensive housing, but an MIT study in May found a few communities that stand out for affordability. One of them is Norwood. Steve Costello, the town planner, showed a visitor around town last month to explain why. ``If you are willing to work with developers," he said, ``they're willing to work with you."

Not every community can be like Norwood. But the next governor and Legislature need to cajole or pressure cities and towns to build enough housing to make the region competitive with other parts of the country. The study by the MIT Center for Real Estate praised Norwood for its mix of rental and owner-occupied housing that is affordable, and located near other job centers.

Today the downtown is being revived, with housing an important element. Some of it was built under the 40B state law intended to encourage the creation of housing for low-income people. In south Norwood, the town is using the 40R law to convert St. George Church into mixed-income housing. In neighborhoods zoned for single-family homes, the town encourages one-third and one-quarter-acre plots to allow reasonable density there.

Norwood's receptivity to housing recalls the time from 1945 to 1980, when communities routinely encouraged housing to accommodate growth in population. Over the past 25 years, many communities have approved restrictive zoning to inhibit growth. The result has been steeply escalating prices and a drag on the state's population.

Barry Bluestone, director of the Center for Urban and Regional Policy at Northeastern University, is working on its 2006 Housing Report Card, to be released next month. He sees two hopeful signs: a small drop in prices, and increased production of one- and two-bedroom apartments. But housing still retains most of the huge increases in value from the 1990s, and start-up homes are in short supply. ``I was able to buy a two-bedroom house in Newton for $44,000 in 1977," he recalled. That's $147,000 in today's money. Such a home price would be almost impossible to find in Newton today.

An Internet search reveals plenty of starter houses for that price and less in Raleigh, N.C., where Boston-based Fidelity Investments plans to locate a 2,000-job complex, or in Cincinnati, where Procter & Gamble is shifting 100 jobs from its Gillette subsidiary in Boston. Unaffordable housing puts the Boston area at a competitive disadvantage.

Of the candidates for governor, Kerry Healey hasn't articulated a policy yet, and neither has Green-Rainbow candidate Grace Ross. Healey does endorse the Romney administration's ``smart growth" program to locate housing in town centers and near transit stations. To further those goals, the Legislature approved the 40R and 40S laws that offer financial incentives to cities and towns.

But what comes next?

Independent Christy Mihos would double spending on the Massachusetts Affordable Housing Trust fund, to $40 million a year.

Democrat Tom Reilly wants to fund the 40R initiative adequately. It now depends on revenue from the sale of state surplus land, and the Legislature has not devised a permanent mechanism to dispose of the properties.

Democrat Deval Patrick favors a partnership between state and local governments to encourage housing production, especially near transit stations.

These are all good ideas, but Mihos's would have no impact on production, and the others may not provide enough incentives by themselves to overcome local inertia.

Democrat Chris Gabrieli, however, proposes to tell cities and towns that they would have to loosen zoning to get increases in the major local aid account. His plan, if approved by the Legislature, would certainly get the attention of local officials.

When Bluestone was buying his first house, prices in the area were not out of sync with the rest of the country. An adequate supply of housing facilitated the 1980s economic boom. Communities like Norwood, almost out of buildable land, can't be expected to shoulder the burden again. The next governor and Legislature need to use the power of state government to chip away at roadblocks in other communities that limit the housing necessary for economic growth.