Tim Czerwienski

There’s a small multifamily building under construction near where I live in Dorchester. The project is near a playground and a newly renovated branch library and is about a 20-minute walk to Ashmont Station. It’s a great neighborhood. Those 12 condominiums will, I’m sure, have nice new finishes and modern HVAC and plumbing systems.

I’m also sure that they will not be “luxury” units, despite the claims of the banner hanging from the construction fence.

To the extent that “luxury” is a term of art in the real estate industry, it typically describes the top 10 percent of properties by price in a market. According to a recent Realtor.com piece, the 90th percentile tier in Boston starts at $2.57 million.

Price isn’t everything, of course. As of this writing, there were several quite luxurious units available in the new Winthrop Center tower for less than $2.5 million.

New construction isn’t everything, either. A stately, well-kept Victorian on Sumner Hill in Jamaica Plain or a renovated brownstone in the South End could credibly be considered luxury real estate.

It’s the combination of factors – price, location, quality of construction – that makes luxury real estate the desirable commodity that it is. Just invoking the term doesn’t make it so.

Why It Matters

You wouldn’t guess that the “luxury” label only applies to a small fraction of homes if you judged solely by the advertising of developers and real estate brokers. I’ve seen signs advertising luxury units in new buildings in North Quincy and Allston. I’ve seen a renovated unit on the top floor of a Dorchester three-decker advertised as a luxury home. As I write, a broker’s “luxury listings for sale in Boston” page features a map of two dozen “luxury” homes for sale in West Roxbury.

We can roll our eyes and pass this off as goofy exaggeration on the part of the real estate industry, but the consequences for our housing crisis are serious.

Regular folks struggling to pay their rent aren’t necessarily plugged in to the nuances of housing policy. What they are plugged in to is what they see every day: banners, newspaper ads and mailings for new luxury housing. If every new development is advertised as luxury housing, is it any wonder many people believe that new development is only catering to the wealthy?

The Truth: New Homes Boost Affordability

Planners and developers see this dynamic in the comments at public hearings all the time. It manifests itself in demands for increasingly infeasible affordable housing requirements, in the campaign to reinstate rent control and in a general attitude that developers are only interested in getting rich by offering a product to the wealthy.

New construction plays a critical role in the housing ecosystem. The availability of new units sets off a chain of household moves that open lower-priced units elsewhere in the community, a process called “filtering.”

Filtering means that even if new units are not at a price point affordable to many households, their construction creates housing opportunities at lower price levels.

This phenomenon is well-documented in academic research, including in a recent paper that found the homes vacated by residents of a new 512-unit condo building in Honolulu “were substantially cheaper than the new units and spanned diverse locations and housing types.”

Data: Most New Rentals Are Affordable

Most new housing isn’t “luxury.” It’s often more affordable than we think.

In a 2024 analysis of Census housing data, Salim Furth, a senior research fellow at the Mercatus Center at George Mason University, found that more than half of new market-rate rentals in places like New Orleans, Buffalo and Providence were affordable to households earning 60 percent of the area median income.

In the Boston region, more than half of new rentals were affordable to households earning 80 percent of the area median income. Not every household can afford a new housing unit, but new housing in small apartment buildings in traditionally affordable neighborhoods is accessible to more people than typical “luxury” marketing would indicate.

New housing units provide tremendous benefits to individual households and the entire housing market.

They are free of lead, asbestos, and other hazardous materials that linger in our older housing stock. They are more accessible to people with disabilities. They have more energy efficient appliances and fixtures. And while housing prices in our region are still too high, new housing units are still attainable for many middle-class households.

The real estate industry should be leaning into these positives rather than pretending that every new unit represents the height of luxury.

Tim Czerwienski is the director of land Ppanning at Beals Associates Inc. He is a former planning director for the town of Milton and a former senior project manager for development review at the Boston Planning Department.