Massachusetts Housing Production Lagging Behind Other States

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By Colin Young
State House News Service

Massachusetts lags behind 40 other states when it comes to increasing its housing stock, a new report said this week, and the pace of new construction last year was just barely ahead of where it was in the depths of the pandemic in 2020.

Construction Coverage, a web site that provides research and reviews related to the construction and real estate industries, ranked all 50 states and more than 300 metro areas based on the number of new housing units authorized per 1,000 existing homes in 2022. The measurement was meant to show which states moved to build the most new homes relative to their existing inventory as the scant supply of housing in some areas contributes to high prices and limits opportunities for homeownership.

Massachusetts ranked 41st on the list, having authorized 5.9 new units of housing per 1,000 existing units in 2022, about half the national rate of 11.7 new units per 1,000 existing units. That was up slightly from 5.8 new units per 1,000 existing in 2020, when the construction industry was bogged down by worker shortages and supply chain disruptions.

The states that authorized new units at a slower pace than Massachusetts in 2022 were Mississippi, New York, Pennsylvania, Michigan, West Virginia, Illinois, Connecticut, Rhode Island, and Alaska. Construction Coverage’s report was based on data from the U.S. Census Bureau’s building permit survey and Zillow’s home value index.

“Although supply is a challenge across the U.S., some locations are moving faster than others in authorizing new construction. Fast-growing states in the Mountain West, like Utah, Idaho, and Colorado, along with Sun Belt destinations like Texas and Florida, lead the U.S. in the rate of new housing development,” Construction Coverage said.

In total, there were 17,692 new housing units authorized in Massachusetts last year compared to 17,075 new units authorized in 2020, a 3.9 percent increase. By comparison, New Mexico saw a nearly 70 percent increase in the number of new unit authorizations between 2020 and 2022, Georgia saw a 38 percent increase, and Florida saw a 29 percent increase.

Among large metro areas, the Greater Boston region built the 13th fewest homes relative to the number of existing homes in 2022, the report said. But the capital region’s authorization rate of 7.1 new units per 1,000 existing units outpaced the statewide rate last year. The Austin, Texas area authorized new units at a much faster rate — 42.5 new units for every 1,000 existing homes, the report said.

Governor Maura Healey made housing a major platform of her campaign for governor last year and established a standalone Executive Office of Housing and Livable Communities this year to give specific attention to the chronic problems of a housing supply shortage and persistently high prices.

“The cost of housing is out of control for too many because we simply don’t have enough of it,” Healey said in her inaugural address earlier this year. “If we want Massachusetts to be a home for all, we need to build more places to live and we need to make sure those homes are within reach.”

Ed Augustus was sworn in June 1 as the state’s first Cabinet-level housing secretary in about 30 years, but the administration’s plans for increasing housing production in Massachusetts have not been fully fleshed out. Citing an “immediate” and “profound” need for more housing, Augustus said his mantra would be “more, faster.”

The shortage and unaffordability of housing in Massachusetts is also making things harder on the state as it tries to manage a growing surge of immigrant families coming to Massachusetts in search of shelter and work. When Healey rang alarm bells about the shrinking capacity of the state’s emergency shelter system and declared an emergency last week, she said that one of the reasons that “we find ourselves in this situation” is the state’s “long-standing shortage of affordable housing.”

Construction Coverage said that the lack of housing supply has been made worse by “significant underinvestment” in new housing since the Great Recession about 15 years ago.

“New housing authorizations tend to fall temporarily during economic downturns, but the collapse of the housing market in the mid-2000s and ensuing recession sent authorizations to historic lows. The number of new residential units authorized has recovered slowly over the last decade, but as of June 2023, new authorizations declined 26% after peaking in December 2021,” researcher Jonathan Jones wrote for Construction Coverage. “According to the National Association of Home Builders, persistently high inflation pushing up construction costs combined with elevated mortgage interest rates produced 12 straight monthly declines in builder confidence during 2022.”


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