Gov. Maura Healey, with back to camera, and Lt. Gov. Kim Driscoll, right, swear in Secretary of Housing and Livable Communities Ed Augustus at the State House on June 1, 2023. Photo by Sam Drysdale | State House News Service

From dire to downright catastrophic. 

That about sums up the steady progression of the housing crisis in Massachusetts over the past year, with new construction falling off a cliff, even as home prices and rents continue to set records. 

Building permits issued for new homes, apartments and condominiums fell by roughly a third across the state during the first six months of the year compared to the same period in 2022, Census Bureau numbers show. 

Construction of new condos and apartments took the biggest hit, with permits falling 35 percent to 4,090 units during the first half of 2023. 

Overall, residential building activity fell by roughly twice national pace, with building permits issued across the U.S. dropping 17 percent. 

Meanwhile, while building permits are dropping fast, housing prices are quite definitely not. 

Statewide, the median home price rose nearly a percentage point to $612,250 in June, even as sales dropped 20.5 percent amid a chronic shortage of homes for sale, either existing or new, according to The Warren Group, publisher of Banker & Tradesman. 

If this isn’t a crisis atop a crisis, then I don’t what is. But so far it has been crickets from Gov. Maura Healey and her newly installed housing chief, former Worcester city manager Ed Augustus after the latter declared at his June 1 swearing-in that his mantra would be “more, faster.” 

But if the statewide numbers are bad, the drop in new housing construction in Boston is even worse. 

Housing permits issued by officials in the Hub are down 50 percent so far this year compared to the same period in 2022.  

Going into June, building permits for just 826 new units had been issued in Boston for all of 2023, well down from the same period in other years. And government-subsidized housing, not private sector development, mostly accounted for what little got built. 

June saw a rebound of sorts, but the devil is in the details. While 588 permits building permits were issued, the overwhelming majority stemmed from the redevelopment of the Bunker Hill public housing project, as well as 345 new units Harvard University is moving ahead with at its new research campus in Allston. 

“It’s a good thing to have a super wealthy institution like Harvard to help goose the numbers,” one city insider told me. “But the BHA [Boston Housing Authority] and a world-renowned Ivy League university are hardly your archetypal developers in Boston. I don’t think the city should pop the champagne just yet.” 

Elephant in the Room 

All of this has done little to temper the Boston area’s ever-rising housing costs. 

The median home price within Interstate 495 area jumped 2 percent to $765,000 in June compared to June 2022, while the median condo price rose to $635,000 over the first six months of 2023, up 2.4 percent over the same period in 2022. 

Scott Van Voorhis

Like the governor, Boston Mayor Michelle Wu hasn’t been eager to discuss the big drop in residential construction, either. City officials have chosen to downplay the trend, which has hit market-rate housing particularly hard, while emphasizing continued construction of public housing and subsidized units. 

Ok, we know politicians are allergic to bad news. And Wu, for her part, has never really been a champion of the idea we need to encourage any and all residential construction as we build our way out of the housing crisis, choosing to focus instead on public housing and subsidized apartments and condos. 

But Healey has made revving up housing production a key piece of her plan to bring prices and rents under control. 

Yet the actual construction of new homes and apartments – or lack thereof – is fast becoming the elephant in the room. 

We need a plan, and fast. And Healey and her new housing chief need to step up to the plate and deliver. 

Scott Van Voorhis is Banker & Tradesman’s columnist; opinions expressed are his own. He may be reached at sbvanvoorhis@hotmail.com.