The city of Chelsea brought in developers John M. Corcoran & Co., Joseph J. Corcoran Co. and Marcus Partners to redevelop a public housing complex near a Silver Line stop into 96 homes for public housing residents and 234 market-rate units. The complex opened Nov. 7. Image courtesy of Marcus Partners

Public property dispositions are a missed opportunity to ramp up housing production in Massachusetts amid the downturn in multifamily construction, according to a new report.

The Boston Foundation’s 2024 Greater Boston Housing Report Card estimates that 85,000 housing units could be created if just 5 percent of vacant public parcels were developed.

“We have this amazing resource available to us to build more affordable housing, and we are squandering it,” said Katherine Levine Einstein, an associate professor at Boston University and one of the report’s authors. “What could be better than free land?”

Part of the problem, the researchers said, are complicated procurement laws that drag out processes and heap costs on developers.

Local opposition is another problem. The report’s authors say towns and cities spent over $50 million since 2010 to buy land specifically to halt at least 13 housing developments. Current law requires a two-thirds vote of town meeting members to declare a piece of land surplus and make it available for housing.

The report spotlights the untapped resource that vacant public properties offer to ramp up Massachusetts’ flagging housing production. Nearly one-quarter of the land in Greater Boston is owned by state or local public entities, according to study data. The housing production estimate is based upon development of at least 15 units per acre.

Construction Slowed, Rents and Prices Rose

After a construction boom in Boston and a handful of suburbs during the past decade, housing production has tailed off in the past two years amid higher construction costs and interest rate hikes. Statewide, building permits for housing peaked at nearly 20,000 units in 2021 but declined to 13,200 in 2023.

While apartment rents started to level off in the past year, home prices continued to climb.

Median single-family sales prices now top $1 million in 35 communities in Greater Boston, according to data compiled by The Warren Group, publisher of Banker & Tradesman.

And rents remain among the nation’s highest, with Boston ranking third of all U.S. metros in average rents for a two-bedroom apartment at $2,369, according to Apartment List.

Amidst that backdrop, underutilized public properties offer a significant opportunity for reuse as housing, the Boston Foundation report notes. But public procurement laws and local opposition to housing remain obstacles, and dozens of communities have acquired parcels to block private housing developments in the past decade.

Report Pushes Legal Changes

To overcome obstacles, the report recommends a series of changes that could spur public land redevelopment.

The report recommends changes in Chapter 30B, which regulates the sale and development of public parcels. The law requires municipalities to issue a request for proposals for land dispositions, but forbids them from discussion with developers about desired uses, in a safeguard against corruption. But without developer input, communities may be unable to issue guidelines for a project that is financially feasible.

“The RFP process is not just burdensome for local governments. It also creates a sizable additional layer of review for developers, on top of the already lengthy regulatory process to which multifamily housing is subject in most communities,” the report states.

Beyond streamlining the state procurement laws, additional housing permitting reforms are necessary on the statewide level to overcome local communities’ zoning regulations that discourage housing production, the report states.

Boston Moving Aggressively with Public Lands

In Boston, city officials have begun the disposition process for two properties named in a real estate audit as having potential for significant housing production.

In May, Trinity Financial submitted plans for 900 apartments and condominiums in a mixed-income development on Bunker Hill Community College parking lots in Charlestown.

The Boston Planning Department selected developers Related Beal and DREAM in April for redevelopment of the Boston Water and Sewer Commission parking lots in Roxbury. The conceptual plans include more than 400 housing units.

The city also is experimenting with innovative ways to add housing on municipal properties used for other purposes. In December 2023, nonprofit Preservation of Affordable Housing and Caste Capital presented a plan to redevelop the West End branch of the Boston Public Library to include 119 affordable housing units.

State officials also are getting more aggressive offering real estate parcels for housing and other development uses. The Massachusetts Department of Transportation is launching a new transit-oriented development program beginning with Cambridge’s Alewife garage property. Other sites identified by state transportation officials for future public-private partnerships include JFK/UMass and Andrew stations in Boston and the Anderson Regional Transportation Center in Woburn.

Former Gov. Charlie Baker announced an aggressive surplus property disposition program in 2015, but did not require major housing components.

One of the largest recent offerings, the Charles F. Hurley state office building in Boston’s West End, was envisioned as a life science project when developers submitted proposals in 2021.

Gov. Maura Healey announced in July the project will be redesigned to include a larger multifamily housing component and expanded to include the adjacent Lindemann Mental Health Center building.