Report: Massachusetts needs another 108,000 homes

MASSACHUSETTS NEEDS another 108,000 housing units to meet the demand, according to a new national study, which ranks Massachusetts 11th among states in its housing underproduction.

Up for Growth, a Washington, DC-based housing nonprofit whose members include housing developers and economic development organizations, released a report Thursday that examines housing underproduction nationwide.

The problem is national. The New York Times highlighted the report’s finding that housing underproduction is no longer a coastal phenomenon but is spreading across middle America.

Chris Herbert, managing director of the Harvard Joint Center for Housing Studies, recently testified at a congressional hearing that a shortage of new housing, particularly modest-cost housing, has led to record-high prices nationwide. He said land-use regulations limit the ability to build dense housing, and recent supply chain issues have extended construction timelines and raised the cost of materials. He said that already, before the pandemic hit, the large millennial generation was moving into their own homes. Remote work during the pandemic exacerbated the demand for larger, single-family homes.

California fares the worst, needing nearly 1 million new homes, according to the Up for Growth study. But Massachusetts’s problem is quickly growing, with the need for new homes doubling from 54,000 in 2012 to 108,000 in 2019. During the same time, the shortage of homes nationally increased from 1.6 million to 3.8 million, according to the report.

The Boston-Cambridge-Newton area ranked 14th nationally for the metropolitan area with the highest need for housing, with an undersupply of 77,000 units, the report found.

“Up for Growth’s Housing Underproduction in the US report shows that the country is facing a housing supply and affordability crisis – making it next to impossible for families in Massachusetts and around the country to buy their first homes or keep up with rising rent,” Sen. Elizabeth Warren said in a statement distributed by Up for Growth. Warren said there is a need to build and rehabilitate more affordable housing and eliminate restrictive zoning practices.

Massachusetts loosened zoning requirements in 2021 when Gov. Charlie Baker signed an economic development bill that let communities adopt zoning changes that promote housing development by a simple majority rather than a two-thirds vote. The governor has made increasing housing production a priority.

But Greg Vasil, CEO of the Greater Boston Real Estate Board, said the biggest problem is many municipalities don’t want dense housing. He pointed to communities that have been pushing back against the housing law’s requirement that communities near MBTA stations allow more multi-family homes. 

Vasil compared the current situation to the end of World War II, when GIs returning from war sought homes to start families, leading to the building of small, dense homes in places where people could easily commute to work. Many of those houses have been torn down and replaced by bigger houses. “We need more density, tighter communities, less sprawl,” Vasil said. “We’ve come full circle. This is what we should be producing but we don’t.”

Resistance to new housing in Massachusetts, particular more modest-priced starter homes, is nothing new. CommonWealth spotlighted the problem 20 years ago this spring. 

The latest report from real estate data firm The Warren Group found that the median price for a single-family home sold in May 2022 was $590,000, a 39 percent increase since May 2020. “The balance between supply and demand has been way out of sync for some time, and this is the manifestation of that imbalance,” said Warren Group CEO Tim Warren.