1 / 41

Detouring the Mass Exodus: Housing as an Economic Development Strategy

Detouring the Mass Exodus: Housing as an Economic Development Strategy. Barry Bluestone Dean, School of Social Science, Urban Affairs, and Public Policy Director, Center for Urban and Regional Policy Northeastern University Northeast Association of REALTORS Holiday Inn

derek-mccormick
Download Presentation

Detouring the Mass Exodus: Housing as an Economic Development Strategy

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Detouring the Mass Exodus: Housing as an Economic Development Strategy Barry Bluestone Dean, School of Social Science, Urban Affairs, and Public Policy Director, Center for Urban and Regional Policy Northeastern University Northeast Association of REALTORS Holiday Inn Tewksbury, Massachusetts October 3, 2007

  2. Presentation Outline • Employment Trends • Population Dynamics • Housing Prices • Cost of Living across U.S. Metro Areas • Impact of Housing Prices on Employment • Impact of Housing Prices on Migration • Housing Price/Vacancy Relationship • Chapter 40R & 40S

  3. Economic Activity Index: Massachusetts vs. U.S. (1993-2007) January 1993 – October 2001 Leading the Nation October 2001 – June 2007 Lagging the Nation

  4. Massachusetts Employment Picture 1996-2007

  5. U.S. Bureau of the Census

  6. Where did they go?

  7. The Cost of Living Challenge

  8. Single Family Home Prices (1996-2007 1996-2005: +139% 2005-2007: - 10%

  9. 2005Class A Apartment Rents Source: Forbes Magazine Calculations based on 900 Sq.ft. Apartment

  10. Housing Affordability in Greater Boston

  11. Source: Economic Policy Institute, “Family Budget Calculator, 2005”

  12. Boston $64,656 Universe: 304 U.S. Metro Areas Source: Economic Policy Institute, “Family Budget Calculator, 2005”

  13. Boston Family Budget – 4 Persons Among 304 U.S. Metropolitan Areas • Housing Costs: 7th Highest MSA • Child Care: 7th Highest MSA • Health Care: 7th Highest MSA • Personal Care: 6th Highest MSA • Fed/State Tax: 2nd Highest MSA • Total Cost: 1st Highest MSA Economic Policy Institute, Family Budget Calculator, 2005

  14. Top Decile: Metro Area Cost of Living Boston $ 64,656 Washington (D.C. portion) $ 61,440 Nassau-Suffolk, NY $ 60,780 Stamford-Norwalk, CN $ 60,720 Lawrence (Mass. portion)$ 59,280 New York, NY $ 58,656 Barnstable-Yarmouth, MA$ 58,236 San Francisco, CA $ 57,624 Worcester (Mass. portion)$ 55,704 Springfield, MA$ 55,320 Minneapolis-St. Paul, MN $ 54,948 Nashua, NH $ 54,852 Santa Cruz-Watsonville, CA $ 53,808 Oakland, CA $ 53,412 San Jose, CA $ 52,800 Pittsfield, MA$ 52,632 Rochester, MN $ 51,288 Monmouth-Ocean, NJ $ 50,736 San Diego, CA $ 50,088 Newark, NJ $ 49,992 New Haven-Meriden, CN $ 49,848 Honolulu, HI $ 49,824 Philadelphia (Pa. portion) $ 49,716 Boulder-Longmont, CO $ 49,596 Bridgeport, CN $ 49,272 Manchester, NH $ 49,152 Santa Rosa, CA $ 48,924 Albany-Schenectady-Troy, NY $ 48,900 Hartford, CN $ 48,684 Trenton, NJ $ 48,576 Rochester, NY $ 48,540 Universe: 304 U.S. Metro Areas Economic Policy Institute: Family Budget Calculator

  15. Boston Monthly Housing $1,266 Monthly Food $ 587 Monthly Child Care $1,298 Monthly Transportation $ 321 Monthly Health Care $ 592 Monthly Other Necessity $ 500 Monthly Taxes $ 824 Monthly Total $5,388 Annual Total $64,656 Raleigh-Durham-Chapel Hill Monthly Housing $ 779 Monthly Food $ 587 Monthly Child Care $ 866 Monthly Transportation $ 358 Monthly Health Care $ 368 Monthly Other Necessity $ 369 Monthly Taxes $ 350 Monthly Total $3,677 Annual Total $44,124 A Tale of Two CitiesBasic Budget2 Parents, 2 Children A Tale of Two Cities Source: Economic Policy Institute, “Family Budget Calculator, 2005”

  16. Boston ($1,266) Source: Economic Policy Institute, “Family Budget Calculator, 2005”

  17. New Housing Research • New England Public Policy Center • Alicia Sasser, Bo Zhao, and Darcy Rollins • The Rappaport Institute for Greater Boston • Edward L. Glaeser • The Center for Urban and Regional Policy • Barry Bluestone

  18. New England Public Policy Center • Region-wide Analysis of Housing Affordability • Owner-Occupied Housing is often not affordable and the problem is getting worse • Young professionals are having a more difficult time buying their first homes • Very low income families being squeezed out of the market by working and middle income families seeking housing • Easier access to mortgage money increased demand • Strict regulations on building is constraining supply • Need policies to increase supply of working and middle income housing

  19. Rappaport Institute Study • Limits on housing construction are responsible for the recent loss in population in Massachusetts • Restricting the production of housing leads to greater volatility in housing prices • Significant price increases associated with restricted supplies of housing subsequently appear to lead to declines in employment and incomes

  20. CURP Study of Housing, Employment and Population • Metro areas with highest cost of living are suffering slow employment growth or outright job loss • Metro areas with the highest cost of living are suffering net out-migration of domestic population • Paradox: The shortage of housing supply can lead to a future sharp decline in housing prices … as jobs and workers leave the state

  21. 2.91% 2.29% 1.49% 1.53% 0.95% 0.86% 0.68% 0.12% -0.62% -0.68% Low Price High Price Universe: 245 U.S. Metro Areas Economic Policy Institute, “Family Budget Calculator, 2005”; U.S. Bureau of Labor Statistics

  22. Boston MSA (-4.9%) Universe: 245 U.S. Metro Areas Economic Policy Institute, “Family Budget Calculator, 2005”; U.S. Bureau of Labor Statistics

  23. Monthly Housing Cost Employment Change (%) (2000-2004) %∆Emp(2000-2004) = -.1466 +.0000396 Housing Cost (4.07) -2.291E-007 Housing Cost SQ (4.04) N = 245 Adj. R Square = .056 Boston MSA

  24. 2.53% 1.98% 1.09% 1.06% 0.84% 0.93% 0.62% 0.50% -0.02% -0.21% Low Cost High Cost Universe: 245 U.S. Metro Areas Economic Policy Institute, “Family Budget Calculator, 2005”; U.S. Bureau of Labor Statistics

  25. Boston MSA (-5.2%) Universe: 304 U.S. Metro Areas Economic Policy Institute, “Family Budget Calculator, 2005”; U.S. Bureau of the Census

  26. Internal Migration (% Change) %∆Internal Migration = - .146 + .000399 Housing Costs (7.03) - 2.475E-007 Housing Costs SQ (7.39) N = 304 Adj. R Square = .153 Boston MSA Monthly Housing Cost

  27. Internal Migration (% Change) %∆Internal Migration = - .146 + .000399 Housing Costs (7.03) - 2.475E-007 Housing Costs SQ (7.39) N = 304 Adj. R Square = .153 Boston MSA San Francisco Stamford-Norwalk San Jose Boston Oakland Nassau-Suffolk Monthly Housing Cost

  28. 2.19% 1.54% 1.40% 1.04% 0.60% 0.41% 0.39% 0.16% 0.19% -2.12% Universe: 304 U.S. Metro Areas Boston Economic Policy Institute, “Family Budget Calculator, 2005”; U.S. Bureau of the Census

  29. What is the relationship between housing prices and housing supply?

  30. Housing Price Appreciation vs. Vacancy Rates Housing Price Appreciation (1995-2005) Universe: 75 U.S. Metro Areas Office of Federal Housing Enterprise Oversight; U.S. Census Bureau

  31. Housing Price Appreciation (1995-2005) Universe: 75 U.S. Metro Areas Office of Federal Housing Enterprise Oversight; U.S. Census Bureau

  32. Housing Price Decline – Metro Areas U.S. Office of Federal Housing Enterprise Oversight

  33. Chapter 40R and 40S New Steps to Solve the Massachusetts Housing Crisis … and protect the Commonwealth’s economy

  34. Amesbury Brockton Chelsea Dartmouth Grafton Haverhill Kingston Lakeville Lunenburg Lynnfield Natick North Andover North Reading Northampton Norwood Plymouth Total: 5,813 Units Chapter 40R Communities

  35. Belmont Boston Gardner Lawrence Total: 2,101 Units Holyoke Newbury Reading Westport Total 1,024 Units Grand Total: 8,938 Units Filed for 40R Filed for Technical Assistance

  36. Conclusions • The high price of housing in Massachusetts is indeed a significant factor in the decline in employment and population • The high cost of living beyond housing – including health care, day care, and taxes – contributes to the decline in employment and population • An increase in housing supply could “inoculate” homeowners against a long-term precipitous decline in housing values by improving the job climate and discouraging outmigration • Chapter 40R and 40S are the beginning of a solution • New Starter Home Legislation will help as well

More Related