Greg Vasil
Prospective homebuyers were likely filled with dread this past summer as headline after headline reminded hopefuls of the harsh reality that is the Massachusetts housing market.
Imagine you’ve worked hard for years, you’ve saved a decent amount of money and now you feel ready to make a significant investment – and then you see one of these facts come through your news feed.
The Greater Boston Association of Realtors revealed that the median price of a single-family home had surpassed $1 million for the first time.
The Boston Globe reported that Massachusetts possessed one of the country’s lowest rates of young adult homeownership.
Researchers at U.S. Data Labs found that the commonwealth issued new housing construction permits at one of the nation’s lowest rates in 2024.
Each of these headlines on its own reiterates a reason why Massachusetts is experiencing a housing crisis. Housing supply is nowhere near meeting demand, which is increasing costs and leading to once-unimaginable price tags as many buyers compete for a home.
Those who want to buy in Massachusetts but can’t afford it have no choice but to leave the state and raise their families elsewhere.
Fortunately, state and local leaders recognize that the status quo is unacceptable if Massachusetts wants to maintain its competitive edge and retain residents. As alarming headlines were published over the summer, elected officials continued to push housing solutions that have real potential to reduce barriers to housing creation and boost supply.
Red Tape Cut, Office Conversions Unlocked
In an effort to reduce red tape, Gov. Maura Healey recently announced a new effort to update the environmental review process for new housing projects that has the potential to save developers significant time and hundreds of thousands of dollars.
The administration is looking to shrink the review time from nine to 12 months to 30 to 60 days while meeting the state’s new requirements that crucially preserve environmental protection efforts.
A shorter regulatory process means less money spent on the state’s onerous guidelines, less money lost waiting to move forward with the project, as well as less vulnerability to long-term market changes that can flip a project from the black to the red.
Another key initiative by the Healey administration, announced just a few weeks before the environmental review updates, is an initiative to kickstart the conversion of unused office spaces to desperately needed homes.
The plan, passed as part of last year’s Affordable Homes Act, will offer up to $10 million in tax credits to projects that already have local approval and will create 50 or more units. Awards will range from $2.5 million to $3 million per project, and credits may cover 10 percent of eligible costs, which could mean the difference between launching a conversion or passing on it.
Zooming in on Boston, Mayor Michelle Wu’s administration recently took a big step in an effort to allow for the construction of apartment buildings up to 700 feet tall downtown.
Since the pandemic heralded the transition to remote work for so many office workers, small businesses across downtown Boston have struggled, and streets once filled with vibrancy feel chillingly sparse. Allowing for the creation of more homes downtown will bring life back to the area, bolster businesses already there, and encourage the creation of new businesses.
Massachusetts has a long way to go to address its housing crisis. Trimming one regulation, funding some office-to-home conversions and green-lighting residential skyscrapers in downtown Boston are not going to solve this extremely complex issue.
But steps like reducing red tape, investing in conversions and reforming opaque zoning laws will allow Massachusetts to create more homes, bringing down overall costs.
Greg Vasil is CEO of the Greater Boston Real Estate Board.
