AIMING HIGH ON HOUSING:
A Comprehensive Approach to Addressing Massachusetts’ Affordable Housing Crisis
Let’s Aim High
I believe housing is a human right. Everyone in Massachusetts should have access to housing that provides shelter, stability and security for their families. Because market forces alone do not result in this outcome, government must play a critical role in ensuring everyone’s access to housing.
We need affordable housing options for all incomes, family sizes and ages. This means options for those struggling with poverty to those in the middle class and everyone in between; options well-suited for young new members of the workforce to new families to empty nesters to senior citizens; options for those wanting to rent or buy, live on their own or in shared facilities, or live in urban or rural areas.
We need a transportation system that conveniently and efficiently connects more homes to job centers through more transit-oriented housing development, expansion and improvement of public transit and less traffic congestion. This will not only provide better access to housing that is affordable, it will relieve market pressure on housing prices where demand is high and supply is limited.
We need a fairer, nondiscriminatory housing system that provides home ownership opportunities for everyone, regardless of race and ethnicity, and that eliminates barriers to affordable housing options for people of color in communities across the state.
We need to make sure that wealthy investors and speculators, development and other market pressures do not push out long-standing members of the community.
We need to reduce homelessness across Massachusetts.
Making it possible for all to have access to housing they can afford will result in stronger families, stronger communities and a stronger economy.
Not Satisfied with the Status Quo
One of the most frequent complaints I hear when traveling around Massachusetts is that housing is simply too expensive. 61% of Massachusetts residents identify the cost of housing as one of biggest problems in their lives. One in every 10 homeowners is extremely cost burdened, spending more than 50% of their income on housing, and the same is true for one in every four renters. Too few people can afford a good home to raise their families, and too few seniors on fixed incomes can afford to stay in the communities they have always called home. Many people cannot afford a home at all.
Our state’s housing system is in crisis. People cannot get the housing they need at costs they can afford, and at locations convenient to where they work. This problem affects us all; economic growth declines when housing costs as much as it does across Massachusetts. The housing crisis is the result of a few related problems.
First, too little of the housing that exists is affordable. The median home price in Massachusetts is now around $405,000; the median home price in Boston is now $612,000. A house is out of reach for many aspiring first-time home buyers. The situation is no better for renters. The average rent in Boston exceeds $3,000 per month, while the average monthly rent in Worcester is $1,315 per month. Of the five fastest-growing job categories in Massachusetts, only three provide enough income for an employee to afford rent in Massachusetts. No wonder that 62% of state residents, when polled, expressed concern that Amazon’s potential arrival in Massachusetts would drive up housing prices. Sky-high housing costs don’t just hurt those struggling with poverty—due to high rents, it’s nearly impossible for those earning good incomes to make ends meet and still save for a down-payment.
Second, there is too little housing. The Metro Boston Area alone needs to build 350,000 new homes by 2040 to simply meet demand and keep the housing crisis from getting worse. Although the city of Boston has increased the rate of housing development, the rest of the Metro Boston Area approved 7% fewer housing units in 2017 than in the year earlier. In the Berkshires, meanwhile, demand for housing has increased dramatically, but without offsetting housing development to keep prices stable. The barriers to increasing the supply of affordable housing are significant all across the state; even a modest and much needed affordable housing proposal in Nantucket faltered under intense lobbying pressure. No wonder the home ownership rate across Massachusetts has dipped sharply over the last four years, to only 60%.
Third, our broken transportation system exacerbates the housing crisis by making it too difficult to commute to and from major job centers, like Boston. Massachusetts is 47th in the nation in commute times. The average one-way commute time to Boston is more than 31 minutes—meaning that many Massachusetts workers log one of the longest average commutes in the entire United States. The commute times for more than one-quarter of all commuters in Massachusetts exceeds one hour each way. Because it is hard for commuters to get from their homes to their jobs, it increases demand – and prices – for housing that is closer to and more easily accessible to job centers.
Fourth, the racial gap in homeownership is unacceptably wide. Compared to the rest of the United States, Massachusetts has the third lowest homeownership rate for Latinos (26%) and people of color generally (34.6%). Even more concerning, Massachusetts has one of America’s largest gaps between white and Hispanic/Latino homeownership rates, as well as between white and black homeownership rates.
Fifth, in cities experiencing significant development and market pressure, long-standing communities are being displaced or are at risk of displacement. Due to high-end development, residential housing supply being taken off the market by investors just parking their money in unoccupied units and high demand for units in desirable areas like Boston, rents and home prices are skyrocketing and long-standing communities across Massachusetts are being displaced. Investors and the wealthy are benefiting from these market dynamics, while regular people are getting squeezed out. Research shows large swaths of the Boston Metro Area are at risk of long-standing community displacement. Experience backs this up, particularly in Boston and surrounding communities like Cambridge and Somerville. And while the impacts are not limited to communities of color, the data suggests they are suffering the consequences. The number of black homebuyers receiving a home purchase mortgage in Boston has fallen from 674 in 2007 to 345 last year, a decrease of nearly 50%. In recent years, black and Latino borrowers make up approximately 12% of those receiving home purchase loans in Boston despite being 34.7% of the households.
Sixth, Massachusetts has far too many people suffering from homelessness. Massachusetts has one of the highest median household incomes in the entire country, yet Massachusetts has an exceptionally high increase in its homelessness rate over the last decade (16%) compared to the rest of the U.S. The current administration has done too little to address this worrying trend. Although it trumpets the lower number of homeless families in motel/hotel shelters, this decrease is deceptive; instead of actually helping the homeless find homes, the administration has made it more difficult to enter shelter, increased the supply of traditional shelter beds that are simply being used in place of motel/hotel beds, and failed to expand permanent supportive housing options.
Principles and Policy Proposals
Because the housing crisis results from a number of related problems, no silver bullet policy will fix everything overnight. Current efforts—which are both too disjointed and too timid—are insufficient.
We need to recognize that we have a collective responsibility to deal with the housing crisis. If housing costs continue to spiral out of control, workers will no longer be able to afford to live and work in Massachusetts. If workers leave, businesses suffer and the economy shrinks. Business will be less likely to locate or expand here. Everyone loses. Thus, every community across Massachusetts must be a part of the solution to the affordable housing crisis.
As Governor, I will take the following actions to address our housing crisis:
- Create a Cabinet Level Position Dedicated to Housing. I will elevate the Department of Housing and Community Development to its own cabinet-level Executive Office overseen by a Secretary of Housing and Community Development (instead of a Secretary of Housing and Economic Development currently dedicated to both housing and economic development). Due to the severity of the affordable housing crisis across the state and the significant risk it presents to the strength of our economy, communities and families, I believe we need to prioritize the work of state government in addressing the crisis. This reorganization will reflect that prioritization and ensure we have a cabinet secretary singularly focused and engaged in driving our housing agenda.
- Empower Regional Housing Planning Agencies. We need a regional approach to planning and coordinating our affordable housing strategy in Massachusetts in order to make progress. The affordable housing crisis manifests itself in different ways in different parts of the state, with different market dynamics, challenges and potential solutions. There can’t be a one-size-fits-all approach. There also can’t be 351 cities and towns across our state all acting in isolation – or not acting at all – to address the crisis that threatens to drag us all backwards. We need to strike the right balance between accounting for local community interests while expanding housing supply and taking other steps to achieve our housing goals across the state in a thoughtful, coordinated and strategic way. That also means the various public housing authorities and other affordable housing agencies need to be making investment and regulatory decisions in a manner that is consistent with a common strategic plan in each region.I will seek authority for the Executive Office of Housing and Community Development (EOHCD) to establish regional housing planning agencies (or to designate existing regional planning agencies to serve as regional housing planning agencies)—with representation and input from local municipal officials—that will be charged with doing the following and have the following authority:
- Define the Problem – Diagnose and define the scope of the affordable housing crisis in the region in enough detail to understand the specific deficiencies, challenges and opportunities for addressing it.
- Develop the Plan – Based on the assessment of the problem, set the goals for the region and the plan for achieving the goals. The plan will be developed with consultation and input from all of the municipalities in the region, EOHCD, all public housing authorities and affordable housing agencies, and all other relevant affordable housing stakeholders.
- Coordinate Execution of the Plan – All municipalities and public housing authorities and other affordable housing agencies must execute and support decisions and investments related to housing development, especially affordable housing development, in accordance with the regional plan. The regional housing planning agency will coordinate the various stakeholders in executing the plan and ensure that they are acting in a manner consistent with the regional plan.
In addition to better coordinating regional solutions to the affordable housing crisis and more effectively leveraging the resources of different affordable housing agencies in furtherance of a common strategic plan, one of the objectives of this approach will be to streamline and expedite the permitting and approval process for affordable housing development consistent with the regional plan.
- Invest More in Affordable Housing.
- State Capital Investments. One of the main ways the state invests in affordable housing is by borrowing money through the issuance of housing bonds to make capital investments in public housing authorities and state subsidized private affordable housing developments. The amount the state has historically borrowed and invested for affordable housing projects each year (~$200 million annually) is too low. I will double the amount borrowed and invested – otherwise known as the amount of “bond cap” allocated – for affordable housing projects to $400 million annually by the end of my first term, and I will invest at least $50 million of the affordable housing capital budget over the course of my first term in homeownership for first-time homebuyers. This would ensure that the $1.8 billion authorized in recent legislation is spent on housing over the next 5-6 years, rather than over the next 9 years.
- State Rental Assistance Programs. I will work to significantly increase investments in rental assistance programs, including through the Massachusetts Rental Voucher Program, to give more low-income families access to affordable rental housing.
- State Match for Community Preservation Act. I will work to increase the state match for the Community Preservation Act to at least 50% of the amount raised locally by increasing deeds fees. This would mark a major change, given that CPA matching funds are projected to be at a record low this year. In return for providing communities with more money under the CPA, I will require communities to spend at least 20% of their CPA dollars on affordable housing, 20% on open space, parks and recreation, and 20% on historic preservation. Communities will also be required to spend CPA funds they allocate to affordable housing or the other required purposes within a reasonable period of time.
- Transfer Tax on High Value Property. I will advocate for a transfer tax on high-value residential properties. The proceeds would fund local housing trust funds that provide additional resources to support affordable housing.
- Strengthen and Improve Existing Regulations. I will seek to strengthen existing regulations aimed at increasing the availability of housing that is affordable, including multifamily housing and “starter” homes for new families. Zoning reforms like making it easier to rent accessory units and appeals reform to prevent meritless claims that delay projects are examples of reforms that can help increase the supply of housing. Cities and towns need to be part of the solution, not a barrier to the development of additional affordable housing. They also need the ability to ensure that additional affordable housing is developed in a manner that accounts for local, community interests and not just imposed on them. Through thoughtful regulatory reform and the regional planning process discussed above, I believe we can accomplish these objectives in a manner that works for local communities.
- Leverage Transportation as an Affordable Housing Solution. I will prioritize transit-oriented development of housing to increase the supply of housing that is conveniently connected to job centers and thereby relieve pressure on housing prices (and achieve other public policy benefits like environmental benefits). I will also invest in transit expansion projects that better connect affordable housing that already exists to job centers, like Boston. For example, if we create a high-speed rail link from Boston to western Massachusetts that makes it a commute from Springfield to Boston, it would not only spur economic development in western Massachusetts, it would also be an affordable housing solution for the Greater Boston area.
- Close the Racial Gap in Homeownership. I will focus more state resources on enforcing existing laws, like the Community Reinvestment Act and the Fair Housing Act, that bar local discrimination in housing. I will target state down-payment assistance programs to first-generation homebuyers using MassHousing and MHP loan programs. I will make more homes affordable by investing in the production of more “starter” homes for new families, including at least $50 million of the state’s capital budget over the course of my first term. I will expand the affordable housing policies that apply to Gateway Cities to apply more broadly across the state, including tax credits that encourage the construction of affordable homes. I will convene a statewide homeownership summit—with lenders, municipal officials, non-profit organizations, and other community leaders—to develop new strategies for closing the racial homeownership gap.
- Help Those Displaced or At Risk of Displacement by Market Dynamics. Too often, long-standing communities in and around our cities are being displaced by rising rents and home prices. These prices are driven up by a variety of factors. One especially troubling force behind price increases is the extent to which investors are buying homes as an investment, with no intent to actually live in (or rent) them and contribute to the local community. Instead, these investors look to sell—to ‘flip’—homes for a profit or just hold them unoccupied as an investment, thereby driving up prices for everyone. As Governor, I will be more proactive in helping communities that are dealing with rapidly rising housing costs resulting from development and market forces. I will work closely with these communities to ensure they have the tools they need to manage development and market forces in a manner that reduces displacement and otherwise protects and supports those affected. While no single solution would be best for every community, I will support the following initiatives:
- “Anti-Flipping” Tax. I will support proposals like Somerville’s home-rule petition for a 1% real estate transfer fee—an “anti-flipping tax”—to discourage speculation by those only interested in making a quick buck and contributing to the affordable housing crisis by taking the property off the market and not occupying it.
- Local Initiatives. I will support programs, like Neighborhood Of Affordable Housing in East Boston and Somerville Community Corporation’s 100 Homes Strategy, that purchase existing affordable housing stock in neighborhoods experiencing rising values and then rent those homes to the families already living there.
- First-Time Homebuyer Assistance. I will also support programs designed to help homeowners assemble down-payments, such as the matched-savings program for first-generation homebuyers offered by the Massachusetts Affordable Housing Alliance.
- Tenant Protection Programs. I will also support tenant protection programs, including those that provide relocation assistance (including coverage of some necessary costs) to those impacted by rising housing costs in their communities.
- Eviction Protections. I will support eviction protection efforts like the City of Boston’s proposal to ensure that tenants at risk of conviction have access to counsel.
- Reduce Homelessness. I will be more aggressive in fighting and reducing homelessness by pursuing the following strategies:
- Preventative Strategies – The best approach to reducing homelessness is to prevent it from happening to begin with. I will work to address life challenges that can lead to homelessness, like the availability of affordable housing (see proposals above) and access to mental health and addiction treatment services. I will also put systems in place to ensure different state and local agencies are collaborating to provide supports to people who otherwise are at risk of becoming homeless, like people discharged from prison or from psychiatric facilities and people at risk of eviction. Lastly, I will invest more in preventative strategies that can be implemented at the front door of shelters to help people avoid homelessness, like caseworkers who can work to reunify homeless individuals and families with other family members and flexible resources to cover costs that allow people to successfully stay in or move into their homes, such as deposits for first and last months’ rent.
- Permanent Supportive Housing – Chronically homeless individuals often struggle with mental illness, substance misuse and other issues, which makes finding and maintaining permanent housing more challenging. While working for Governor Patrick, I helped pioneer a program called “Pay for Success” that gives charities and private investors incentives to provide permanent supportive housing for chronically homeless people. This involves not only finding housing for these individuals, but also providing the support services these individuals need to address and manage their life challenges to stabilize their lives and successfully maintain their housing. The program only rewards investors if they help homeless people successfully transition to permanent supportive housing, which evidence demonstrates results in better outcomes for the individual and lower housing and health care costs for government. Based on the positive results of the program, I will work to scale up our investment in permanent supportive housing for chronically homeless individuals. Doing so will reduce homelessness, stabilize the lives of individuals and reduce costs for taxpayers.
 Massachusetts Association of Realtors (2018)
 Greater Boston Association of Realtors (2018)