Scott Van Voorhis

 

Crazy home prices and sky-high rents look increasingly to be a permanent part of life in Greater Boston across much of Massachusetts, not some passing phase.

Home prices and rents have more than rebounded, especially inside the 495 beltway, once again putting the squeeze on all but the most affluent.

Yet despite all the new apartment towers taking shape in Boston, new housing construction across the state now looks like it may never get back to peak levels, at least in this decade, the latest stats show.

Single-family homes are being built at less half the rate they were a decade ago in Massachusetts, while even the number of new apartments and condominiums coming online is just finally reaching peak levels, U.S. Census figures reveal.

So why care? Given the direct correlation between the amount of new stuff getting built and home prices and rents, this is far from some arcane statistical debate.

Barring a brutal recession, the only way that prices are going to settle back down to more reasonable levels over the long-term is to build more than we have in the past, and that’s just not happening.

“We as a state cannot afford this rampant price appreciation that is directly attributable to lack of supply,” said Jeff Rhuda, business development manager at Symes Assoc., a residential developer.

So far this year, everyone from national firms like Pulte to mom-and-pop builders have taken out a total of 13,620 building permits across the state for new homes, condos and apartments.

Sure, that’s an improvement over the 11,313 building permits taken out this time last year, and a major step forward compared to 2012, when cities and towns across the state granted permits to build anemic 8,190 new units of housing.

But it’s a far cry from what the numbers were a decade ago. Through the end of October 2005, builders had pulled permits for nearly 20,000 units, pretty much double what we’ve been seeing the last few years as the real estate market has heated up.

One of the most dramatic differences between then and now is the number of single-family homes being built.

There’s a lot of anecdotal evidence that we are seeing a lot less homebuilding in the suburbs, with builders generally putting up smaller subdivisions, when they are successful at all in wrangling difficult-to-get permits from local officials.

The numbers bear this out.

So far this year we’ve seen 5,688 permits for new single-family homes across the state. That’s actually down about 1 percent from this time last year and less than half the 12,124 building permits for single-family homes granted to builders during the same period in 2005.

In fact, new construction is so relatively rare right now that it has become something of a luxury item in and of itself, with relatively modest, four-bedroom suburban homes easily commanding $1 million or more in Boston’s most affluent suburbs.

Instead of buying starter Capes and colonials, young families are now stuck with a choice between a condo or taking on a fixer-upper.

Vicious Cycle

But maybe as surprisingly, the much-touted boom in apartment and condo construction – with all those cranes on the Boston skyline – isn’t producing all that much more than what we were seeing a decade ago.

Developers have been granted permits to build 7,349 new apartments and condos so far this year. That’s compared to 6,131 this time a decade ago.

It’s certainly an increase, but hardly the unprecedented boom that it is too often made out to be in the media, which increasingly has the memory of a gnat and is unable or too lazy to dig into publicly available numbers.

So what gives? It’s gotten much more difficult to build anything anywhere in this state, just as the need for new, reasonably priced housing once again escalates to crisis levels.

Young families and recent college grads know all too well how prohibitively expensive the housing market can be, but they don’t control who gets to build in cities, suburbs and towns across the state.

Instead, NIMBY-dominated town and suburban boards have been busy trying to keep new housing out, often in the misguided belief they are protecting their communities’ “character” or preventing local schools from being overrun by a hoard of new schoolchildren.

Not much was built in the years after the Great Recession of 2008 and 2009; local planning boards and health commissions in suburbs and towns across the state spent those years drafting ever more onerous, health, zoning, wetlands and septic rules.

Builders trying to do something more substantial than just putting up more McMansions face a kangaroo court of town boards and commissions that can drag out the permitting process for years.

“Local municipalities are free to restrict housing production and the state is either powerless to stop them or doesn’t care,” Rhuda noted.

It is nothing less than home rule run amok. And until someone has the courage to stand up to these local housing bullies, we’ll stay stuck in this vicious cycle of rising prices and falling supply.

Housing Starts Lacking Across The State

by Scott Van Voorhis time to read: 3 min
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