June 2024 Newsletter
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.
NFE Event: How New Housing Can Help Bolster School Budgets
Newton’s schools are often cited as a primary reason why people move here, and keeping those schools from overcrowding is often cited as a reason to limit new housing here. It’s a big reason why many people push back on large multifamily properties, and why those buildings often have few, if any, three bedroom apartments. The theory goes that three bedroom apartments attract families, while studios, one, and two bedroom units attract either couples or families with fewer children.
The basic fear is that housing will draw heavily on existing city resources while not providing sufficient revenue to pay for those services.
But an event hosted in May by Newton for Everyone, attended by over 100 people in person and online, suggests exactly the opposite, that new developments could, in fact, provide a revenue boost to the city, which we could use to augment our school budget.
Guest speakers Elise Rapoza of MassINC and Luc Shuster, executive director of Boston Indicators, presented their research, which found that more housing means more revenue. In fact, the average municipal revenue increase across the state was just over $1600 per unit.
While this number represents just the potential from the housing itself, there are additional sources of revenue that come with additional housing, like increased commercial activity and both aid and incentives from the state.
As Schuster said in the talk, “The economic case for new housing is kind of a slam dunk.”
The whole video is worth a watch; check it out here.
Also, read coverage of the event in the Newton Beacon and in Fig City News.
Volunteering to Advocate for Diverse Housing
Thanks to all those who helped out at the Newton for Everyone table at recent village days and the Juneteenth celebration. Many new people heard about the importance of more diverse housing in Newton and signed up to stay in touch.
If you would like to find out how you can help advocate for more diverse housing, let us know.
Discover Our Current Reading List!
America’s Magical Thinking about Housing, Derek Thompson, The Atlantic, 2024. The solution to increasing rents and prices is pretty straightforward: build more homes. Austin is adding homes at more than twice the national average (based on its existing stock) and rents have come down 7% in the past year.
Minneapolis Land Use Reforms Offer a Blueprint for Housing Affordability, Pew Charitable Trust, 2024. “Rents stayed flat as more apartments were built, even as the rest of Minnesota saw increases.”
No, Really. Building More Housing Can Combat Rising Rents, Sarah Holder, Bloomberg, 2023. “Building more can slow rent growth in cities and free up more affordable vacant units in surrounding neighborhoods, without causing significant displacement.”
Upzone Update. A biweekly newsletter from Boston Indicators and Amy Dain that tracks and analyzes MBTA-C compliance efforts, including links to media coverage and upcoming events.
Newton for Everyone is dedicated to promoting housing opportunities for people of all ages, means, backgrounds and abilities in Newton. The housing shortage affects all of us. We believe that diverse housing options are crucial to fostering a thriving community, a sustainable environment and a robust economy.