One would think that with the national housing market bust, the issue of affordable housing in Massachusetts is on its way to resolution. Well, maybe not so quickly.
The New England Public Policy Center and the Federal Reserve Bank of Boston recently produced a discussion paper: The Housing Bust and Housing Affordability in New England by Robert Clifford, Research Associate.
The paper looks at affordability in the New England states and the rest of the nation. The results show that although New England’s housing prices have declined and affordability has returned to the pre-housing crisis levels of the early 2000s, owner-occupied housing in Massachusetts is still less affordable than in the rest of the nation. Clifford remarks:
The affordability measures explored here point to lingering sources of concern pertaining to the high cost of homeownership in New England. In four of the six New England states (all but Maine and New Hampshire), recent drops in home prices have not been large enough to make the median-priced home affordable for the median-income household. Or—to present the same results from a different angle—the weak economy has prevented middle-income households from augmenting their incomes enough to allow them to afford the median-housed home in their state. The difference in affordability between New England and the nation is especially acute in Massachusetts.
The study also shows that more of the region’s households are becoming cost-burdened, particularly low- and middle-income homeowners.
Unfortunately, what this means for the Massachusetts economy is that, as the recovery begins nationally, job opportunities in other states will start attracting young families out of the region and into areas that are more affordable, leaving us yet again with a declining skilled workforce.
Once and for all, we need to develop a serious policy that allows for the construction of smaller, denser, affordable, starter homes.