Pioneer Institute Releases Examination of  Metropolitan Housing Markets; Obtains Insights Into Improving Affordability 

Boston, Mass. – A Pioneer Institute review of reforms enacted in metropolitan areas across the country finds that to achieve more affordable housing in the coming decades, Greater Boston should focus on policies such as making it easier to build small multi-family projects, retrofit commercial areas with new housing, and loosen parking and minimum lot size requirements.

“A close look at metropolitan areas across the country reveals just how complex our housing challenges are,” said Andrew Mikula, author of “Sticker Prices, Elastic Supply, and Geography: A Cross–Metro Housing Affordability Analysis.”  “No one area has put all the pieces together, but we can glean best practices from policies enacted in various places.”

Greater Boston ranks sixth among the nation’s 50 largest metropolitan areas in the Zillow Home Value Index and prices are rising faster than in 36 of the 50 areas.  Rents are also very high, though market-rate rents have grown more slowly than the U.S. as a whole since 2015.

All told, the UMass Donahue Institute projected that Greater Boston would need to create 320,000 new housing units between 2010 and 2025 to meet demand.  As of 2023, the region was on pace to build just 55 percent of that goal.

Mikula finds three main reasons why Boston has struggled more than the rest of the country to build more housing.  The first is some of the nation’s strictest zoning laws and regulations.

The second is local politics.  Discretionary local reviews add delay and uncertainty.  Building permit approvals take 9.3 months on average, more than in all but 11 of the 50 top metropolitan areas.

Third is geography.  Just over a third of Greater Boston is undevelopable due to wetlands, steep slopes and other geographic constraints.  This requires more infill – building in already developed locations – which is often more expensive.

Case studies from three metropolitan areas highlight the complexity of housing challenges.  In Texas, Houston has done better than Boston at maintaining affordability, but it has the advantage of vast amounts of undeveloped land.  Austin is relatively affordable to large numbers of people who recently moved there from places such as California, but long-time residents have seen home values more than quadruple in a generation.

Here in Massachusetts, low incomes and a weak market make it hard for the Springfield area to improve availability of homes its residents can afford.

Mikula finds that there are three pillars to sustainable, broad-based affordability:

• Widespread availability of low-cost housing

• An elastic supply that can respond to shifts in demand

• The ability to overcome geographic constraints and concentrate new housing in infill locations

He examines several key reforms that could help achieve those goals in Greater Boston.  One is reducing the minimum lot size requirement, which is 1,400 square feet in most of Houston and as much as 9,000 square feet in Boston.  From 2007 to 2024, Houston took advantage of lot size reforms to build more than 34,000 townhomes that cost 38 percent less on average than other new single-family homes in the city.

In most communities in Greater Boston, more than eighty percent of available land area is zoned solely for single family homes. Zoning laws should be amended to allow several homes on each residential parcel.

Parking requirements should be eliminated for new developments.  It costs up to $50,000 per space to build underground parking, which can make projects unviable.

Development approvals should be streamlined for desirable projects.  In Los Angeles, administrative reviews of affordable housing developments must be completed within 60 days and public hearings can be waived for some projects.  South Bend, IN has issued a design catalog of small multi-family buildings that are pre-approved as long as developers make few or no changes to the architectural specs.

Cities should also make it easier to add a modest number of additional units to infill parcels.  Memphis has made changes that, for example, mean that new three-to-six-unit buildings no longer need to include multiple means of egress on upper floors, fire sprinklers or separate technical drawings for mechanical, plumbing and electrical systems.

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Andrew Mikula is a Senior Fellow on Housing at Pioneer Institute. Beyond housing, Andrew’s research areas of interest include urban planning, economic development, and regulatory reform. He holds a Master’s Degree in Urban Planning from the Harvard Graduate School of Design.

About Pioneer Institute

Pioneer Institute is a non-partisan think tank based in Boston. It develops and communicates dynamic ideas that advance prosperity and a vibrant civic life in Massachusetts and beyond.