Where is the Next Generation Going to Live?

If you're reading this, you likely already know that we need to build more housing to meet the needs of the region, but a few recent facts paint a dire picture. 

For one, statistically, if a couple wants to buy a home in the Boston area, it will take them 40 years to save enough for a down payment. 

What's worse, this imbalance between housing demand and supply is driving nearly a quarter of our younger population to talk about leaving the region entirely in the next five years. A study from the Greater Boston Chamber of Commerce points out that the key factors driving this are the high cost of rent and the inability to buy a home. This isn't just about our children; it's about having a vibrant and dynamic economy for Newton and the region as a whole. Without housing, we risk losing our community.

“Our young residents are not only the future of the workforce, but also our current leaders and champions of our small businesses, downtowns, and workplaces,” said Chamber of Commerce president James E. Rooney in a press release. He called on us to "elevate the voices of young residents" as they struggle to navigate the region’s cost of living issues.

More Housing = Lower Rents

Of course, we know that building enough new housing to meet market demand can help us combat rising rents. A study, covered by Bloomberg CityLab's Sarah Holder, found that building housing does, in fact, put downward pressure on prices. Writes Holder: 

Six years after Auckland, New Zealand, rezoned three-quarters of the city to allow for denser housing and upped its housing stock by about 4.1%, rents for three-bedroom units citywide were 26% to 33% lower than in similar urban commuting zones, according to one 2023 study. 

Another study on German municipalities between 2010 and 2017 found that when yearly new housing supply increased by 1%, average rents fell by 0.2%, and that building market-rate housing eases cost burdens for renters across the income spectrum.

Redfin found that prices for residential sales and rentals in Austin dropped because new housing had been built there. A December study found that prices there are down 6.2% year over year, even as those in other similarly situated communities increased. This is thanks, in part, to a massive increase in multifamily luxury properties. That doesn’t mean Austin is cheap, but it does show how development can impact prices. 

In some cities such as New Rochelle, NY and Minneapolis, MN rents have continued to rise even as new housing has been built, but studies point to a much lower rate than other locations. 

The Urban Land Institute agrees that lack of housing supply is driving up rents and prices, but cautions against focusing on just a few scapegoats. Its paper on the subject offers up some very modest and moderate changes that could drive up supply. 

It certainly worked in Minneapolis, where the Fed reported that, thanks to a chain of moves as availability increased, 100 new market-rate units led to 70 new vacancies in lower-income neighborhoods. 

We can do that here in the Boston area, but it will take our collective and collaborative efforts.