Elise Rapoza
There’s a renewed fascination with homeownership right now, emerging from a hard reality: The age of first-time buyers keeps rising, rents are swallowing household budgets and the starter home has all but disappeared. Policy conversations have rushed toward demand-side fixes such as down-payment assistance, tax credits and even talk of 50-year mortgages, all intended to help buyers stretch further.
But none of these tools address a core issue: Massachusetts no longer produces many affordable homes for sale.
The MassINC Policy Center’s 2025 Gateway Cities Housing Monitor report makes the imbalance clear. Roughly 93 percent of state production dollars support rental units, while only 7 percent support for-sale homes. Include federal low-income housing tax credits – which can only be used for rental – and the ratio becomes 95 to 5.
How We Got here
Before the Great Recession, roughly a quarter of state housing production dollars flowed to for-sale units, but in reaction to the foreclosure crisis, Massachusetts shut down its homeownership production pipeline.
State support for producing homeownership units remained withered for the following two decades. Developers, lenders and nonprofit partners adapted accordingly. Capacity for ownership development atrophied, while capacity for rental development became more sophisticated.
Gateway Cities have produced housing at record levels – over 7,300 units added in 2023 and another 4,700 in 2024. Multifamily development accounts for 80 percent of this production. Historically, small buildings with two to eight units, often called the “missing middle,” provided a pathway into owner-occupancy. Currently, these smaller buildings make up only 5 percent of recent developments and residential conversions in Gateway Cities.
Housing production in cities should shift towards multifamily production to get all the benefits of density and walkability. The deeper challenge is that “multifamily” has become shorthand for “rental,” as reinforced by LIHTC and the Historic Rehabilitation Tax Credit, two of the dominant financing tools.
Ownership Works in Multifamily Projects
Yet ownership is possible in multifamily structures.
Massachusetts law provides legal pathways for condominiums, fee-simple townhomes and cooperatives. What’s missing is a financing and regulatory system that normalizes these forms.
That means showing developers and lenders how to replicate pilot projects and promoting flexible rules that could allow temporary rentals or rent-to-own arrangements if units do not sell in order to lower risk. It also means restoring a more balanced flow of public dollars in state housing programs.
In many Gateway Cities, the demand is already there. Our analysis finds enough internal demand in Gateway Cities to fill roughly 16,000 for-sale units today – without attracting a single new resident. The challenge is to provide them with options to buy in the places where they already live.
‘Deserts’ Sap Wealth from Neighborhoods
Failure to act would leave Gateway Cities with a growing map of what we call “homeownership deserts” – neighborhoods where fewer than 20 percent of homes are owner-occupied.
These places make up only 6 percent of census tracts statewide, but they are heavily concentrated in Boston, Cambridge and the state’s Gateway Cities. Fifteen of the 26 Gateway Cities have at least one; Worcester has eight, Springfield six and Lawrence, Holyoke, Chelsea, Fall River, Lynn and New Bedford all have three or more.
The consequences are not abstract. Across Massachusetts, the average poverty rate in homeownership deserts is 30 percent – more than triple the rate in other neighborhoods. Our analysis shows a clear correlation: poverty drops from about 22 percent at a 20 percent homeownership rate to only 6 percent in neighborhoods with 70 percent homeownership. Concentrated poverty has been repeatedly shown to have community-scale impacts, and rental-only development pipelines may further intensify instability. Households churn more frequently and much of the economic benefits of revitalization flows to absentee owners instead of circulating locally.
This may foster challenging places to establish banks and community finance structures, as a result of weaker deposit relationships and fewer households in a position to take on mortgages, auto loans, or small-business credit.
At least 17 Gateway Cities have announced plans to increase homeownership production, and MassHousing’s CommonWealth Builder program for affordable homeownership has proved popular but meagerly funded.
Without a real shift in state incentives and a deliberate strategy to rebuild the homeownership pipeline, these projects will remain exceptions rather than a new norm. The next decade of housing production could reinforce a one-sided rental landscape or rebuild the pathways that let households put down roots and build wealth where they already live.
If Massachusetts wants revitalization to produce broadly shared prosperity, the evidence points to a clear conclusion: The state must build not only more housing, but more ways to own it.
Elise Rapoza is a senior researcher at MassINC’s Policy Center. Her work includes producing the annual Gateway Cities Housing Monitor.
