The first six months of 2025 have seen the worst pace of housing construction in years with just 852 units given building permits. That’s less than half what started construction in 2018. iStock photo
The decline in housing production in Boston, a city already beset with some of the nation’s highest prices and rents, has gone from bad to worse to simply catastrophic.
Boston issued building permits for just 852 new residential units during the first six months of 2025, according to the latest city numbers.
It marked the worst start in years and a 27 percent drop from 2024’s anemic numbers.
By comparison, City Hall gave the go-ahead for 3,602 homes in 2018, in the middle of former mayor Marty Walsh’s tenure, according to MAPC data.
Simply put, the construction of new housing in Boston has broken down.
The only question now is whether Boston Mayor Michelle Wu, locked in a heated reelection campaign, will acknowledge the issues and propose some solutions to get new projects moving again.
Why Boston Matters
The city of Boston in recent decades has served as a major source of new housing for the whole Greater Boston market, alongside its traditional role as New England’s economic hub.
So what Wu does, or doesn’t do, matters to a lot of people beyond the city limits.
Unfortunately, so far, the signals coming out of City Hall have not been encouraging.
In the past when questioned about slumping housing starts, Wu has downplayed the drop in production while stressing what she contends are the rising percentage of and number of affordable units being built.
However, these claims rely heavily on housing projects that began in the tail end of the Walsh administration and that finally opened over the past couple of years.
Her administration has also pointed to the high numbers of housing units approved by the Boston Planning & Development Agency board each year during her tenure – but nearly all of them were proposed before her hike in developments’ share of affordable housing units took effect.
Guarantee Decision Timelines
Faced with these grim new numbers, the head of one of Boston’s top real estate trade groups is calling upon the Wu administration to make it easier and more predictable for housing developers to get a green light for new projects, and to ease those costly new affordable housing requirements
Those force 17 percent of a project’s units to be money-losing affordable homes and another 3 percent reserved for Section 8 voucher-holders, who are typically long-term tenants but who come with a mountain of paperwork and bureaucratic delays.
“When you start a project, you want to deliver it for a certain market,” Greg Vasil, CEO of the Greater Boston Real Estate Board, told me, adding, “it can take years to get stuff permitted.”
City officials, for example, could guarantee that would-be housing developers can receive permits in a reasonable period of time, say 12 to 15 months, compared to the years-long slog of community meetings and negotiations they now face, Vasil said.
Rethink Affordability Rules
City Hall could also cut the number of affordable units which developers are required to include in every new project, Vasil said.
In particular, city officials should consider lowering that percentage to 13 percent, where it sat for most of Walsh’s tenure, Vasil said.
Greg Maynard, executive director of the Boston Policy Institute, also argued for a lowering of the city’s affordability requirements.
Maynard noted that the city’s own analysis a few years ago predicted that new residential construction would not “pencil out in much of the city,” but that the Wu administration went ahead and implemented it anyway.
And, as the saying goes, 20 percent of zero is still zero new affordable housing units.
Search Out Obstacles
Tamara Small, CEO of NAIOP Massachusetts, said the collapse in housing production in Boston can’t be blamed on any single policy change or rule.
Rather, it has to do with a much broader set of rules, regulations, and conditions that have driven up the cost of building housing in Boston to $1 million a unit.
“A comprehensive review of all local regulations and requirements affecting development in Boston needs to be done and it must be done immediately,” Small said. “The current system is hindering housing production and economic development. The numbers clearly illustrate this.”
Scott Van Voorhis
“The future of not just the city, but the entire commonwealth, depends on it,” she added.
For his part, Jay Doherty, chief executive of Cabot, Cabot & Forbes, said he is voting with his feet and looking to other cities to build, beyond Boston.
“Boston, like much of the region, is entirely out of touch with the realities of the world right now,” Doherty said. “There is no tweak or new policy that can fix it.”
A spokesperson for Boston’s Planning Department referred questions to the mayor’s press office, which, in turn, did not respond by B&T’s deadline.
Scott Van Voorhis is Banker & Tradesman’s columnist and publisher of the Contrarian Boston newsletter; opinions expressed are his own. He may be reached at sbvanvoorhis@hotmail.com.
