MARK LEFF
‘Precious little’
The number of building permits issued in Massachusetts jumped 17 percent during the first 10 months of the year, while permitting for single-family homes rose more modestly.
But according to some observers, the increase is doing little to put a dent in the housing crisis facing many of the region’s working families who cannot afford to live in the Bay State.
Economists, housing advocates and homebuilders long have argued that the state’s slow housing production has helped to drive home prices up. Zoning restrictions and strict land-use and homebuilding regulations have hurt housing production, they say.
“Although the numbers look like they’re up, we’re building precious little workforce housing for our families in Massachusetts,” said Mark Leff, senior vice president of Salem Five Cents Savings Bank.
A total of 19,728 building permits were issued through October, up from 16,837 a year ago, according to data from the U.S. Census Bureau. Some 12,124 permits for single-family homes were issued during those months, a 5 percent increase from the 11,524 permits issued a year ago.
Leff, who serves as senior vice president of the Home Builders Association of Massachusetts, attributes the increase in permitting to a number of age-restricted housing communities that are springing up throughout the Bay State and to the state’s so-called anti-snob zoning law, or Chapter 40B.
The law enables developers to seek approval for housing from local zoning boards of appeals under flexible rules in communities where less than 10 percent of the housing stock is affordable. In exchange, developers must set aside at least 25 percent of the units for lower- to moderate-income households.
More than 35,000 housing units have been built in more than 200 cities and towns under Chapter 40B, according to information from the Citizens’ Housing and Planning Association.
According to Leff, the census data can be misleading because permits for attached townhouses are counted as single-family permits, and many of the townhouse-style developments in Massachusetts have been designed for empty nesters.
Leff also pointed out that the sharpest increase in permitting activity has been in multifamily housing, which is a result of Chapter 40B projects initiated up to four years ago.
In fact, the number of permits issued for properties with two units or more jumped 42 percent from 5,573 during the first 10 months of last year to 7,901 through October of this year.
“The bottom line is that without Chapter 40B, this state would have an even larger housing problem than it does today,” he said.
‘Wasting Land’
Homebuilders and housing advocacy groups have expressed frustration in recent years over zoning in many communities that requires homes to be built on lots of one acre or larger.
The average lot size for single-family homes built in the Route 128/Interstate 495 corridor from 1998 through 2002 was 1.3 acres, according to a study conducted for the Massachusetts Housing Partnership that was released in September.
The study showed that only four communities in that region – Newburyport, Randolph, Norwood and Hull – had lot sizes less than half an acre. Meanwhile, 14 towns had an average single-family lot size of over 2.5 acres, including Sherborn, Lincoln, Essex and West Newbury.
Such zoning requirements have helped to push land and housing costs up, homebuilders and housing advocates argue.
The median selling price for a single-family home in Massachusetts was $327,000 last year, a 63 percent increase from 2000 when the median price was just $200,000, according to The Warren Group, parent company of Banker & Tradesman.
Condominium prices also have gone up dramatically. The median selling price for a condo reached $257,500 last year, which was 72.5 percent higher than the $149,262 median condo price recorded in 2000.
“Houses are expensive because we’re not building enough of them and because we’re putting them on big pieces of land,” said Finley H. Perry, owner of F.H. Builder in Hopkinton and president of the Home Builders Association of Massachusetts. “We’re wasting land.”
Studies have shown that housing policies in Massachusetts have been a key obstacle in housing development. Inconsistent, confusing and unpredictable regulations have helped to block housing production, according to a report released two years ago by the Pioneer Institute for Public Policy Research and the Rappaport Institute for Greater Boston.
However, one encouraging sign is that permitting activity in Massachusetts has climbed in the last few years, according to census data. A total of 22,477 units were permitted last year, compared to 20,257 in 2003, 17,465 in 2002 and 17,034 in 2001.
Permitting was up in Greater Boston, as well. Some 7,000 permits were issued for single-family homes in Greater Boston last year, reversing four years of decline, according to The Greater Boston Housing Report Card 2004, which came out in September.
However, the report, prepared by Northeastern University’s Center for Urban and Regional Policy, revealed that in most Greater Boston communities, single-family permitting activity still lagged behind the number of permits issued in 1998, when 8,639 units were permitted.
Leff said he isn’t so sure the year-to-year increases will continue. He anticipates that permitting activity may go up one more year and then level off or even decline because regulatory changes have made permitting under Chapter 40B more complicated and costly for developers.
And for homebuilders, a key barrier to increased housing development – excessive local regulation – has yet to be removed.
“That problem has not been addressed,” said Leff. “Until something is done about this we’re not going to produce reasonably priced, reasonably sized housing for our workforce.”
