Unlocking Affordable Housing: Sources and Solutions for Cost Crisis

Hubwonk Housing Crisis with Andrew Mikula

[00:00:00] Joe Selvaggi: This is Hubwonk. I’m Joe Selvaggi.

[00:00:02] Today we’re going to be talking about the greater Boston housing market. The housing market in Greater Boston has become a battleground of skyrocketing prices and dwindling availability. In November 2023, the median down payment for a home reached an astounding $105,300, surpassing the region’s median household income.

[00:00:24] Rents aren’t any better. As of June 2023, the average monthly rent in Boston topped $3,000, and Massachusetts has been named the most expensive state to rent a one-bedroom apartment with a median price of $2,500. But it’s not just about affordability. The number of active home listings has plummeted by 55 percent over the past five years, making homes increasingly scarce.

[00:00:49] The impacts are widespread. Young adults are stuck renting or living with relatives. Retirees can’t afford to downsize. Homelessness is on the rise, and many families are struggling to keep up with housing costs. The crisis is driving young professionals out of the area and deterring talented newcomers from moving in.

[00:01:09] Is this affordability challenge merely an unfortunate result of our thriving economy and local quality of life? Or is it a man-made problem, one created by historical bad choices, which can be tackled with useful policy interventions? My guest today is Pioneer Institute’s Housing Fellow, Andrew Mikula, who will discuss the findings of his recent paper, Supply Stagnation, the Root Cause of Greater Boston’s Housing Crisis and How to Fix It.

[00:01:34] In our conversation, we’ll explore the foundations of this crisis, tracing it back to a long-term trend of under building and the resulting intense competition for available housing. We’ll break down the demographic data, examining the causes of the decline in housing production, from soaring construction costs and interest rates to regulatory hurdles. And  analyze why many proposed solutions have failed to address the core supply demand imbalance. So, without further ado, I want to welcome my guest back to Hubwonk, Andrew Mikula. Welcome to Hubwonk, Andrew. Thanks so much for having me back, Joe. All right, well, you’ve been on the podcast before, and you and I have talked at great length about the high cost of housing, and we’ve talked about local zoning as one of the major problems.

[00:02:14] I want to address all the issues that you cover in your paper, but what I always like to ask, my guests before, we dive into the facts, the data, is for our listeners thinking about high cost of housing, why should our listeners care that it costs so much to live in the greater Boston area?

[00:02:31] Andrew Mikula: Well, housing is one of the biggest, well, often the biggest household budget item for most families at a time when cost of living has really had a huge impact. detrimental impact on the economy. Where you can afford to rent or buy a home affects everything from where you send your kids to school, to the kinds of job opportunities you have, a whole host of kinds of health and social related outcomes. So it should really be concerning for pretty much everybody that housing is not as widely or broadly attainable for most households as it used to be. in the 1970s, the ratio of the median household, the housing price to household income was about 3. Today it’s more than 6.

[00:03:16] Joe Selvaggi: So that’s, I’m sure our listeners are aware things have changed, but this didn’t really sneak up on us. When do you see, you mentioned 1970, those, essentially the ratio of prices to income has doubled. When did this begin and, how long has this sort of been creeping up on us? Right.

[00:03:32] Andrew Mikula: It is a long and insidious process. I think the 1970s, a lot of housing researchers will point to that, especially Greater Boston. Because you saw this kind of. A perfect storm of kind of new regulatory constraints and a shifting attitude on what property rights meant in a lot of communities. People wanted to say in not just what to do with their own property, but how homes were developed around.

[00:03:56] Joe Selvaggi: So of course we’re going to talk about basic economics. I think all our listeners get a treat from Hubwonk, a little lesson in economics in each episode. So, we’re going to be talking about supply and demand for housing. Let’s start with the supply side of the equation. Um, when you talk about, in your paper, how available, houses are, we talk about Boston, Greater Boston, what are you talking about in there? Are we, is it just downtown? Are we inside 128? Or is it Greater Massachusetts?

[00:04:23] Andrew Mikula: It’s a lot bigger than most people realize. So, the definition I use in the paper is, is a seven-county region, five in eastern Massachusetts, two in southern New Hampshire. Sometimes I only use the five counties in Massachusetts due to data constraints, but basically, it’s everything in the kind of I 495 corridor. Plus, Portsmouth and some towns around it in New Hampshire that are within commuting distance of Boston.

[00:04:47] Joe Selvaggi: So, we’re also, again, when we talk about supply, how do we measure supply? How many people or how many units do we have, and how do we measure changes in that supply? I’ve often heard the term thrown around, housing permits, but not so much housing, actual construction. I’m always interested in saying, well, it’s one thing to permit a house, another entire, or a condo, or a general. It’s another thing to actually build it. How do we measure supply and the change in supply? That’s right.

[00:05:11] Andrew Mikula: So, we do have a pretty historically high gap between the number of homes that have been permitted and the number of homes that are starting construction. And a big reason for that is cost. I’m sure we’ll get into that later. But when it comes to using data that’s up to date, cities and towns will often report kind of building permit data to the federal government or the Census Bureau. But it’s getting data on actual completed units. You really only get that sort of picture, with either kind of surveys the census conducts that’s not directly reported from cities or towns, or the decennial census. So it is a little trickier. I use building permit data as a proxy for that reason.

[00:05:51] Joe Selvaggi: Sure. Okay, fair enough. It’s a hard thing to measure. one hopes towns don’t game the system by reporting permits and not actual building, but we’ll talk about that. Let’s move to the demand side. We have an incumbent population. We have people who are living in homes, enjoying their homes. and we’re going to measure demand in the sense of the people who want homes that can’t find homes. What’s the estimate for the demand? Effectively, people aren’t here yet, so how do we measure an unmet demand when we’re talking about housing?

[00:06:19] Andrew Mikula: That’s really tricky. So, for context of the last few years, this 7 county region I mentioned has added about 14,000 or had the building permits to allow 14,000 or so, on average, housing units per year. That’s taken a dip a bit in 2023, largely because of, again, the high construction costs, interest rates, et cetera.

[00:06:43] But at one point, so this was before the pandemic, the UMass Donahue Institute. out in Western Mass projected or estimated that Greater Boston needed to create about 20,000 new units of housing per year to keep up with demand. But that was based on a kind of projection of the number of households in the region. That we had, in 2025, so they were drawing this out to 2025, and we had already surpassed that household kind of number by 2020. So, it’s hard to pin down that number, but I’d say that 20, 000 is really a big number base or interim goal.

[00:07:19] Joe Selvaggi: So, we, again, we’re using basic economic principles. We talked about supply, and we talked about demand. The demand is so far outstretched, outstripped the supply. In that situation, again, basic economics, when we have such an imbalance between the demand for housing and the supply for housing, how is that manifest in the, reflected in the data? How does, undersupply of housing and an oversupply, perhaps, of demand, I guess you can’t really say it’s oversupply of demand, but how does that imbalance, make itself evident in the, in the data?

[00:07:46] Andrew Mikula: I think the first thing that shows up, Joe, is lower vacancy rates. So, economists consider, a healthy vacancy rate, the kind of ratio between, housing units that are not occupied to the total number of housing units.

[00:08:01] To be about 5 to 8 percent in the rental market and 1 to 2 percent in the kind of for sale market, that’s to facilitate turnover and housing over time. People want, people who are looking for new housing want to have options available, but eventually If there’s a supply demand imbalance that continues for a long time, you’re going to see, because of the low vacancy rates and the low availability, landlords will have and sellers will have more leverage to increase prices, and eventually people who can’t find what they’re looking for over a given period of time will either not come here in the first place or leave if they can.

[00:08:37] Joe Selvaggi: Indeed, we see that outflow, unfortunately. Now, you and I are both, at least amateur students of economics, and we know that when there’s an imbalance between supply and demand, prices do go up, as you just mentioned. But generally, that’s a signal to the suppliers to say, okay, people are willing to pay a lot for a house, let’s make a lot more of it. We know this works for almost all products. Why is it, this is perhaps the crux of our, our issue today, why is it that the demand hasn’t driven a greater supply of new homes?

[00:09:07] Andrew Mikula: Yeah. Now we’re getting to the meat of the issue, something I spend most of the paper talking about. So, over the last five years, that’s for a wide variety of issues, wide variety of reasons.

[00:09:18] Home builders are facing construction cost increases over the last year, or last year. 5 years or so about 40%. We have interest rates that are much higher than it makes it feasible to build a lot of or finance a lot of new homes. And we’ve also had more long-standing issues like a construction labor shortage, which is particularly bad in the last few years because of Factors like a dip in immigration during the pandemic and the great kind of resignation of the last couple of years or the first couple of years of the pandemic.

[00:09:49] We also have longer standing issues that are, I’d say, particularly bad in greater Boston, like, the regulatory constraints around where and what typology of housing you can build, and also, local political opposition. is always a huge issue. People show up to, protest against new development in their neighborhoods and oftentimes local government bodies will, take a long time to approve projects or downsize them before they’re approved.

[00:10:15] Joe Selvaggi: So, you and I have talked about, the problems with the constraints on, zoning and new building in these towns. so, Again, we’re constrained here in Boston. We’ve got an ocean on one side, we’ve got old, an old city, and, limited, places to build, but people want to, or they’re attracted to the economy here in Boston, all the eds, the meds, or the biotech.

[00:10:36] People want to be close to where they work, what has been done, let’s say, in our region to help, encourage towns that perhaps are commutable, that have space, that could be building, what’s out there that might be working, encouraging this kind of development, and what, what’s not working? What’s dead in the water?

[00:10:53] Andrew Mikula: Yeah, so I think one thing you’re getting at, and we have seen some recent policy at the state level to encourage transit-oriented development. people facilitate easier commutes for people. The MBTA Communities Act. In particular, is a piece of legislation that’s aimed to facilitate some of that.

[00:11:11] And there are a lot of reasons why we would want to concentrate new housing around train and bus stations. It’s better for the environment, it uses existing public infrastructure more efficiently, and it also does improve access to jobs for people. but it’s not the be all end all of transit-oriented development in the region.

[00:11:28] And it’s gotten a lot of attention, in part, because of its kind of top-down nature. I personally like to see the state provide more incentives for infill housing development in existing areas that aren’t quite as heavy handed, don’t rely on the judicial system to enforce them.

[00:11:45] Joe Selvaggi: All right, so we’re talking about, I think, the acronym for this is NIMBYism, right? Not in my backyard. Many towns don’t want, this development, and they perceive Any sort of imposition from outside is top down. what then would you imagine would be more an organic way for bottom up? What can we encourage towns that could perhaps have more infill, more production, more homes per mile or square foot, than they do now? How can we I don’t know, discourage or encourage yimbyism, yes, in my backyard.

[00:12:12] Andrew Mikula: That’s something I’m certainly still wrestling with. I think that in the paper I mentioned the potential for capacity, political capacity building among people who do tend to be more pro-development or pro housing, renters, young people, some faith-based communities have been involved in that in greater Boston.

[00:12:31] But I also think it’s important to Start in places where it’s in places and typologies where it’s going to be more palatable for people. I’ve seen a lot of communities legalize accessory dwelling units, which are often kind of Small rental units that are, harder to discern from the outside, whether they’re in, a garage or an attic or backyard cottage.

[00:12:54] and I also think that it’s low hanging fruit in some places to, to put more units in kind of commercial areas that are apart from existing residential neighborhoods. But it’s also about education. Right, because, for example, people believe that a new multifamily housing development in their neighborhood is going to reduce their property values, and a lot of the academic research I’ve seen, at least, doesn’t really bear that out, right?

[00:13:19] It’s very minimal effect, in some cases even a positive effect, and most of the time it’s just not measurable when you’re talking about a single, project in a housing market that’s, 2 million units.

[00:13:32] Joe Selvaggi: Sure, again, I think the assumption is any change has to be bad change, right? That, that it may be the case in your research, some of your research, some of the footnotes in your research, reference studies that say, some of this new development in, let’s say, otherwise more rural towns actually may improve housing costs rather than dilute housing prices, right?

[00:13:49] They can actually be beneficial to the town that invites them. Your paper also cites some of the challenges, particular to Boston, that talk about the high cost of building materials. We know any of us who have hired a plumber or a carpenter to help improve our home knows they command a quite a high-cost wage, materials cost a lot here. How does a builder deal with these kinds of challenges to the cost of building a home?

[00:14:16] Andrew Mikula: Yeah, so I, I think it’s very hard to make those kinds of reforms that reduce costs, especially from a building materials or a interest rate standpoint at the local and regional level, as long as interest rates are controlled by the Federal Reserve and, some of the kind of policies that might bring building materials down, especially when they’re dependent on imported goods, might be, federal trade policy.

[00:14:42] But at the local level, I think, cities and towns have a lot of power over the process for approving new development. And what that looks like in practice often is You know, potentially, waivers for certain, desirable types of development when they’re going through the special permit approval process.

[00:15:01] A lot of projects that aren’t, single family homes in the suburbs, or families. Will require what’s called a special permit where, you have to, the applicant, the developer or investor will have to go to, before a board or committee, the town level, and they can, again, drag out the process, nitpick a lot of design details and whatnot. And that creates a lot of uncertainty for builders at a time when they’re trying to, they’re already dealing with risk on kind of the interest rate front, on the construction costs.

[00:15:31] Joe Selvaggi: I think that’s an important point in that, as you say, it’s risk, but of course time is money. It’s a cliche, but if it takes a very long time to permit a home, that adds risk, adds costs, and makes homes more expensive to build.

[00:15:45] Andrew Mikula: So, streamlining the approval process, even if the project can eventually approve, you’re still paying. Property taxes, insurance, financing costs, all the while it’s going that way.

[00:15:54] Joe Selvaggi: I see. So, your paper also, beyond mentioning the value of streamlining the approval process, talks about the requirements, such as minimum lot sizes or even parking requirements. I’ve read a lot about parking requirements being an onerous issue, given that, in a sense, particularly in these communities where you have access to mass transit, and we become less sort of car dependent in this Modern world. Are those parking requirements really driving up, helping to drive up the cost of homes and new homes?

[00:16:22] Andrew Mikula: Yeah, first I want to touch upon the minimum lot size thing, because I think this is an issue where there are really a lot of regional differences within the United States, and New England tends to have especially large minimum lot size restrictions. So suburbs in the South and West will often require that you need 5,000 contiguous square feet in order to build a home. But in most suburbs of Boston, you’re going to see minimum lot sizes like 20,000 square feet, which is about half an acre.

[00:16:56] Joe Selvaggi: Well, I saw in your paper, Texas has smaller lot size requirements. Then Massachusetts, right? And they’ve got a lot of land. So, that surprised me in your paper.

[00:17:06] Andrew Mikula: Right. And I also think, academic studies have shown that when you limit that, that policies like minimum lot size requirements, both limit new construction activity and also make it so that the homes that are built are more expensive.

[00:17:21] Because you need to buy more land before the home can be constructed. And the same is true for requirements like, like parking minimums. It’s essentially making it so that even in neighborhoods with excellent access to urban amenities or public transportation, you need to create more space.

[00:17:39] You need to pave over more land. And in places where apartments are allowed, you might even need to create that parking underground, which is, costs tens of thousands of dollars per space.so my philosophy is if the bank that’s funding the project or the developer might think that the tenants will need parking or want parking, that’s fine. But why should the government mandate that we pay more to Paradexy?

[00:18:08] Joe Selvaggi: Indeed. Perhaps even more controversial than requiring, or not requiring, parking is some of the other, standards for building. I’m thinking about environmental standards, meaning, they have to be, carbon neutral or, environmentally, better than what came before it.

[00:18:20] What about these requirements, even with low-income housing, where, either it’s an environmental requirement or, low income offsets. they may be well intentioned. We want builders to consider homes for people who have lower incomes. But what is the effect of, I’ll lump them together, environmental requirements and also low-income offsets on the cost of building homes?

[00:18:41] Andrew Mikula: Yeah, so I think what you’re getting at is a policy called inclusionary zoning. Inclusionary zoning is basically when a city or town requires a developer to set aside a certain number of units for those inclusionary in an otherwise market rate project. And that’s great for the lucky few people who can move into those homes.

[00:19:01] But it’s also, if the developer is able to do so, they’re probably going to just offset that by raising the cost of market rate units. And there’s also the risk that inclusionary zoning requirements, especially in an environment where we also have. Very high construction costs, very high interest rates, et cetera.

[00:19:18] It’s just going to make projects not financially feasible to construct at all. As for the environmental standards, I’ll say that’s something that’s an object of current research of mine, and I’ll definitely have more to say about that down the line, but I do think that it’s not clear that the upfront costs of are putting in the new green infrastructure are able to be captured on the back end by the builders and the investors and the people who are, going to need a reason to build the units in the first place. And in part, that’s because you have in the interim lenders and appraisers who are not necessarily considering. the energy cost or energy efficiency or whatnot when they go to determine financing value of the home at the end of the day.

[00:20:06] Joe Selvaggi: Of course, right? if you have lower energy costs in the future, the net present value of that home is higher, but you just don’t realize it.

[00:20:13] Andrew Mikula: It’s not, yeah, it’s not clear that all kind of the industry is taking that into account at all levels right now. It’s just on the developers to.

[00:20:27] Joe Selvaggi: So, it’s fair to say, the more expensive we make homes to build, the more expensive homes will be to buy. Yeah, we’re not going on a limb with that one. All right, so, let’s, I want to shift our conversation a little bit to, thinking about, okay, now we’ve got expensive homes, we’ve outlined why they are expensive, and the imbalance between supply and demand, and there’s all kinds of creative, policy ideas for addressing the high cost. I want to go through some of the good ones, but let’s start with some of this humble host.

[00:20:52] Well, say, some that I consider less good ideas. I’m going to, let’s get this out of the way early on. Why can’t we just simply limit their rate of rent increases? Why can’t we have the government say, Okay, look, not everybody can afford half their income for rent. Why don’t we impose rent control or rent stabilization, whatever euphemism you want to use, to help people afford homes that they might not otherwise be able to afford?

[00:21:14] Andrew Mikula: Well, hypothetically, we could, we don’t require landlords to only increase their rent by a certain amount, every year. But the problem is we can’t force them to rent out those units in the first place. Intuitively, we would expect that landlords, if they had an alternative that was more profitable, would tend to gravitate towards that.

[00:21:34] And empirically, that’s exactly what we see. there was a study a few years ago out of Stanford, I think, that looked at San Francisco. And so we looked at rent control policies and found that once you, units that were subject to rent control, essential, or landlords who had units subject to rent control, reduced the rental housing stock by about 15%.

[00:21:56] And so in the long term, that means, well, maybe if you’re a tenant who was already there when rent control was passed, you might benefit. But if you’re trying to either move to a new unit or move to the city for the first time, you’re going to be dealing with the consequences of that lower availability, which, as we know, tends to raise prices over time, or at least market-based prices.

[00:22:18] Joe Selvaggi: Right, so we, rent control has the effect of reducing supply, which we’ve already established, lower supply means higher prices. So, it has the exact opposite effect of what its intent.

[00:22:27] Andrew Mikula: Right. And some researchers have even said you know, it’s a way of almost turbocharging gentrification because the people who can now afford to move into the city, are dealing with those.

[00:22:38] Joe Selvaggi: Indeed. What about ideas like low-income housing tax credits? Are these good ideas or are they effective in your research in helping reduce the cost of housing?

[00:22:51] Andrew Mikula: So, I’d say they’re effective in the sense that they do create a lot of units, at least how they’re currently constituted, but I’m not sure they’re the most efficient way of providing more attainable housing for low income.

[00:23:04] And so, so to back up, low-income housing tax credits, this program is an IRS initiative. It’s in the tax code. And basically, it would allow us, it’s administered by the states. It allows state financing, housing finance agencies. To essentially reduce the federal tax obligations of people who create low-income housing and so what will happen in practice is developers or investors or, well, whoever’s creating the housing will sell the credits to investors in order to fund the upfront costs of the development. And the reason why that’s a problem or can be inefficient is because even with LIHTC, you need to rely on a slew of other kind of government grants, low income, low, low interest loans, et cetera, to actually make that financially feasible at the end of the day, and all of those different programs are going to have different programmatic requirements.

[00:24:03] It just becomes extremely difficult. Thank you. complicated and expensive, often more expensive than it is to construct a market. So, let me, sorry, I know I’m talking a lot. I think what LIHTC gets right is that it adds to the supply. We do need more supply. I think the problem is it’s, it’ll be more efficient if, we allow, market rate supply expansion, and then use, nonprofit grants or existing programs to buy older housing and preserve it as affordable. For the simple reason that new construction is inherently more expensive than buying an existing home.

[00:24:42] Joe Selvaggi: All right, I want to circle back to that idea. But let’s take the idea one step further. Rather than low-income housing tax credits, what about all, of course, what we knew about from, let’s say, the 60s and 70s? Actual government housing, where the government steps in and builds it itself and then invites low-income people to live there. I don’t want to color your, influence your answer, but why is this sort of, why is this out of favor, and why might it be a bad idea?

[00:25:06] Andrew Mikula: Yeah, it’s definitely out of favor in terms of how it’s, how many units we’re creating. LIHTC creates many more units than public housing these days, but in short, I think most government agencies are not well constituted to build and manage housing. There are a lot of self-imposed procedures, procurement, labor, pay rate requirements, et cetera, that are just too inflexible.

[00:25:30] But even in Europe, the actual kind of construction work of building these units is usually contracted out to the private sector. and in the United States, public housing is, managed by a thousand of different, like, often very small local housing authorities, and they just, they don’t have the resources or, the ability to scale up their operations in any effective way but the big reason I actually gave in the paper, I didn’t, I haven’t mentioned yet, why public housing is out of favor is because it’s just. not as efficient kind of dollar for dollar in providing benefit to low-income people relative to more demand side solutions.

[00:26:10] Joe Selvaggi: Okay. All right. Well, let me, I want to slip in here and I don’t know where a natural place to slip this question is. Recently, and very recently, there seems to be a new boogeyman out there that says, the reason rent’s so high is all our rental units here and across the country are being scooped up by corporate corporations’ investors, they’re, they’re not mom and pops, they’re these massive conglomerates of corporate investors who go in, jack up the rents, and, collect the money. Is there any merit to this sort of phenomenon, or, and indeed, not whether it’s happening, but does it really seem to have an influence on the market?

[00:26:44] Andrew Mikula: Rent and rent rates. I don’t have any hard data on that. I’d say that it’s reasonable to expect that, corporate landlords and institutional investors are probably disproportionately going to rely on algorithmic or otherwise impersonal methods to maximize their profits. But I also think that the idea that this is.

[00:27:06] We’re solving the problem by, banning them or limiting the scope of how many homes they can buy at a time is just out of whack with what the problem actually is, right? So, so it’s more of a symptom of the problem than anything else because we know that institutional investors are buying homes by the hundreds because they’re targeting areas that already are seeing high rent growth, already have a lot of constraints to adding supply, already have you know, job growth already have a market that’s out of whack.

[00:27:39] And so the solution to that is, we might have other reasons why we don’t like, corporations taking advantage of the problem, but, solving the problem needs more proactive solutions than just Banning certain buyers. Indeed.

[00:27:53] Joe Selvaggi: And of course, as you say, it doesn’t necessarily increase the supply. So, let’s, shift to more positive conversations about not, rather than what doesn’t work, what does work, your paper makes clear that there’s no silver bullet. This is not a simple problem. And as such, we’ll not have simple solutions. What are we doing right now? let’s say in the greater Boston area, some of the things that might actually be work that are being tried in, in, in reality and not in some academic paper or, in the classroom. What’s actually working in Boston that, that seems to, either affect, the cost of housing, the supply of housing, this kind of thing.

[00:28:24] Andrew Mikula: Yeah. So, I, we are seeing a few more communities take on process based reforms.

[00:28:31] I think the City of Boston is in the beginning stages of that. They’re, they’ve talked a lot about reforming the Article 80 process, which is the, Planning and Development Agencies, major process for essentially, facilitating, larger, housing development or a wide variety of types of development.

[00:28:49] But the problem is, when this Article 80 was first passed in the 90s, it only really applied to a select, group of projects that were relatively uncommon in their size and scope. and right now, in Boston, after a decade long building boom and whatnot, those projects are really the norm.

[00:29:08] And so it’s, we need a kind of broader scope of reforms that, that looks at, well, how realistic is it to go through a process that comes with its own environmental review and a lot of discretionary approvals of related design and whatnot, for all of these projects. And so, I think, cutting red tape in Boston will go through Kind of Reform Avenue.

[00:29:30] But in terms of addressing the kind of urgent needs of low-income households, I think most cities and towns probably don’t have the resources to do that scale. Boston has a kind of first-time homebuyers, down payment assistance program, which I think can help some people, but at a broader level, one solution that gives taxpayers a lot of bang for their buck Relative to things like public housing and LIHTC, is the Federal Housing Choice Voucher Program.

[00:29:58] Joe Selvaggi: Okay, so again, you’re singing our song, we want to talk about choice, right? So vouchers, you say, are something that might help, encourage, both, People to be able to afford units, but does it perhaps even encourage supply, by supply, with vouchers?

[00:30:14] Andrew Mikula: Maybe indirectly. I think, you’re definitely increasing the demand for housing with providing vouchers to people, but, I think you need a, the limitations on supply still very much apply, regardless of whether the potential buyer is someone with a voucher or someone who’s willing to pay market rate. If we have restrictive zoning and a lot of the kind of hurdles that make development infeasible in most contexts.

[00:30:40] Joe Selvaggi: So, we’re getting close to the end of our time, and I want to combine some of my final questions into one. Your paper makes some allusions to the fact that regional cooperation could be harnessed to encourage. more housing. We talked a little bit about top-down encouragement of housing or bottom up encouraging of housing. what, we, I don’t know whether it’s a carrot or a stick. What could regional cooperation do to ensure that we get the housing that we all want and deserve?

[00:31:10] Of course, the people who aren’t here yet can’t advocate for housing that doesn’t exist yet. They can’t be at the town meeting, so they don’t live there yet. What can we do to Proactively encourage these towns to voluntarily, cultivate more building, more homes, more supply.

[00:31:25] Andrew Mikula: Yeah, I think at its best, that’s a, that kind of regional collaboration is a kind of bottom-up alternative to state mandates that we’ve seen, with MBTA Communities Act and other, policies in the past.

[00:31:39] But I have seen recently, Chambers of Commerce and regional service providers related to housing really step up to bat on the policy side, in terms of bringing people together who have a direct stake in making sure we have enough housing for, to serve a wide variety of people and I just wanted to, I would be remiss not to mention, the kind of demographic shifts that have live their town.

[00:32:15] And so, arrangements like encouraging cottage courts to be created that have single level living opportunities for seniors would be great. And on the flip side, in cities, we have, we do, we have seen a lot of millennials move out of cities in recent years, but research suggests a big reason for that is because of the size and affordability of housing.

[00:32:38] And so finding ways via density bonuses or expedited permitting in order to encourage kind of family size units in places like Boston and Cambridge. I think would be great. But back, sorry, back to the regional issue. I think we have also seen a lot of, and, in part also to encourage arrangements like that, the Housing for Seniors and younger people who are starting to form families, we have seen a lot of organizations spring up at the local level in recent years that advocate for housing at a very local level. And I think that’s encouraging. I think there’s momentum there and ultimately, I hope that town officials will be accountable to those sorts of, desires.

[00:33:21] Joe Selvaggi: Indeed. Again, we talk about this more or less on an academic level. Of course, if we want our parents who age to age near us, they need to be able to afford it. We want our kids to be able to live near us after they graduate and get their first jobs. This is a problem for everybody. We, we can’t just simply say, I’ve got a house, we sorry, lower housing prices will benefit all of us, or more housing supply.

[00:33:42] I just, before I close, I want to make a, have you make a plug where, if we’ve, piqued the interest of our listeners, where can they find your paper that just came out? Your Supply Stagnation, the Root Causes of Greater Boston’s Housing Crisis and How to Fix it. Where can they find your paper?

[00:33:56] Andrew Mikula: Pioneerinstitute.org. we have a page on kind of housing. We have a page on economic opportunity. All that’s implicated. In the paper very much.

[00:34:07] Joe Selvaggi: Thank you very much, Andrew. I’m going to close the way I do my podcast. This has been another episode of Hubwonk. If you enjoy the show. There are ways to support Hubwonk and Pioneer Institute.

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