In 1990, Massachusetts faced declining home values and rising foreclosures as the 1980s Massachusetts Miracle came to a crashing end. By 2000, rapidly rising housing prices, dwindling vacancy rates and a growing affordability gap prompted calls for a significant increase in housing production. In 2010, Massachusetts was suffering from the worst foreclosure crisis in generations. Now, in 2020, we once again face a booming market with tight supply, skyrocketing prices and tens of thousands of families unable to afford a safe and stable home. With each cycle it seems to get worse. So, will we continue to face such boom-and-bust cycles over the next decade?
Sadly, the answer is probably yes if we don’t address the dysfunctions in our housing market. Those dysfunctions include: the legacy of racism and legalized housing discrimination that has produced and sustained our segregated landscape; outdated zoning laws that artificially curtail housing supply, reinforce segregation, and encourage sprawl; growing income and wealth inequality that exacerbates housing inequities; and capital markets that favor speculators and investors over first-generation homebuyers and tenants.
If we do not take bold action, today’s problems will worsen:
- The housing affordability gap is likely to grow;
- Housing segregation will persist with dozens of cities and towns in Greater Boston remaining almost exclusively white;
- Gentrification and displacement will accelerate;
- Market forces will likely spur more development in mixed use, transit-oriented locations, but low-density sprawl will also continue to eat up our landscape;
- Carbon emissions from the housing sector will decline but not fast enough; and
- Our boom-and-bust housing cycle will likely continue, with lower-income families bearing the brunt of the pain at each point along the way.
The housing crisis is getting more and more attention from the media, policymakers and voters. But we can’t just talk the talk, it is time to walk the walk. Here are six steps to get us started.
Step One – Protect tenants facing eviction and displacement
Tenants – especially those with modest incomes and no government subsidy – need protection from eviction and displacement. We need legislation to provide tenants with a right to legal counsel in eviction cases, the right to band together and purchase their buildings when they go on the market (like they have in Washington, DC), and increased funding for programs that provide emergency financial support to families facing eviction.
Step Two – Preserve and build significantly more income restricted housing
Under any plausible future scenario, thousands of Massachusetts households will not be able to afford market rate housing, especially low-income seniors, people with disabilities, young families and minimum wage workers. The only solution is to preserve and build housing that offers affordable rents and home prices. Cities and towns should adopt the Community Preservation Act, implement linkage and inclusionary development programs and be given the authority (by the state Legislature) to enact transfer taxes to fund affordable housing. At the state level, the Legislature should pass legislation to double the deeds excise tax which could generate $150 million per year in new funding for housing and a similar amount for climate investments. And the federal government needs to step up in a big new way to finance affordable housing – something nearly every Democratic candidate for president has pledged to do.
Step Three – Fix our zoning and land use laws
One prediction of which I am confident – we can’t solve our housing shortage without more housing. We need to fix our outdated zoning and land use laws, and this must start with passage of Governor Charlie Baker’s proposed Housing Choice legislation, which would make it easier for cities and towns to make the necessary changes. We also need cities and towns to take the next step to adopt zoning laws and policies that allow more housing development – especially multi-family rental housing – in smart locations near transit and town centers.
Step Four – Restore abandoned and poor-quality housing in weak housing markets
While much of our state faces rapidly rising home prices, some Gateway Cities and rural communities struggle with weak real estate markets, where low rents and declining values make it difficult to maintain an aging housing stock. We need a comprehensive statewide initiative to put older properties back to use as safe, high-quality housing which in turn can take taking market pressure away from neighborhoods facing gentrification.
Step Five – Close the racial homeownership gap
To close our shameful racial homeownership gap, we need tools to overcome the racial wealth gap that is the legacy of housing discrimination. Therefore, we need to build more affordable starter homes and limited equity homeownership projects that don’t require large down payments, while expanding access to affordable mortgages, downpayment assistance and homebuyer education. Governor Baker recently took an important first step with the announcement of $60 million to help build 500 homes that will be affordable to first-time and first-generation homebuyers.
Step 6 – Respond to the Climate Crisis
Over the next decade, we need to transform the housing sector to reduce its carbon footprint while also preparing for the impacts of climate change. This transition is already well underway, but we need state and local policy to help accelerate this process and to ensure that lower income households benefit along with everyone else. Policy makers will need to mandate higher building standards, create market incentives through carbon pricing and provide subsidies to help soften the cost of this transition.
So where will all of this leave us in 2030? We have learned the hard way that making predictions about future housing markets is risky business. But it is not nearly as risky as failing to take the steps necessary to build the housing market we need to support our economy, our families and our future. It is time to act!
Joe Kriesberg serves as the president and CEO of the Massachusetts Association of Community Development Corporations. Kriesberg has served as president since July 2002; he joined the MACDC as vice president in 1993. Along with creating some new programs at the MACDC and helping to pass related laws through the state legislature, Kriesberg has also taught at Northeastern University’s Center for Urban and Regional Policy as a visiting lecturer. Kriesberg holds a bachelor’s degree from Binghamton University and a juris doctorate from Northeastern University.