THE MASSACHUSETTS housing world is under strain from every angle, and every housing gambit is a long game.
Healey administration housing officials are facing a bleak to-deal-with list, hampered by the lowest rental vacancy rate in the country – just 2.8 percent – and a 200,000-unit shortage. The emergency shelter system is crushed by waves of new migrant families needing housing. Plus, the Commonwealth is struggling to get a picture of the new reality of hybrid and remote work, prompting fears of an “urban doom loop,” in which a shift in work patterns leads to a hollowing out of downtown commercial space and undermines a city’s tax structure.
“I don’t think there’s any silver bullets,” Ed Augustus, who heads up the new Executive Office of Housing and Livable Communities, said on The Codcast. “There’s not one obvious thing that, geez, if you just did this, this would unlock housing production. But I think it’s a series of smaller policy changes, additional funding, and new partnerships and strategies that hopefully collectively help move the needle and get us closer to that 200,000 number.”
The state housing secretary didn’t offer details on the administration’s first housing bond bill – expected to be released within the month – but characterized their approach to the bill as trying to be “good listeners” to advice from former Baker officials and experts, meeting with stakeholders, reading a flurry of white papers from advocacy organizations, and “looking for common ground.” They are also, he said, being “shameless” about looking at other states’ approaches to similar crises.
Boosting support for accessory dwelling units, which are small additional units built on existing properties, is an oft-touted policy change and one example of a California approach that may work in Massachusetts, Augustus said. “The benefit of that is it doesn’t necessarily cost the state any money to do that,” he said, with “people incented to do that for their own family reasons or personal reasons.”
Augustus said the interest rate environment is a particular challenge. After years of a post-recession and low-inflation reality, rates are on the rise and squeezing the housing market economy for renters, homebuyers, landlords, and developers alike.
Spiking interest rates and inflation “combined have made it more expensive to create the same number of units,” Augustus said. “And so even though you’re putting more money in, you’re not necessarily creating more units because it’s costing more to create the same number of units. And who knows what the interest rate environment might be like in 2024, or whenever the bond bill is passed.”
The hope, Augustus said, is some decline and leveling out of both factors, stabilizing the construction market. “Hopefully that helps us kind of start to get traction again,” he said. “So I wouldn’t say that we need to just scrap the whole system and start from scratch. I don’t think that’s the case, but I do think that there are some new levers that we can move.”
Augustus points to the MBTA Communities Act, a Baker-era law given some flexibility and some new teeth during the Healey administration that requires cities and towns near transit to zone for more multi-family housing. This is still the first year of its implementation, he notes, and “we have not seen the fruit of that yet.”
In time, as communities approve rezoning to allow by-right multi-family housing, Augustus expects the density in those areas will meet demand. He was diplomatic about the shaky state of transportation, a key component to the MBTA law even though the quality of the service does not factor into communities’ rezoning obligations.
“I think everybody knows the challenges that the T has faced and knows the effort that the new general manager and team are putting into trying to deal with those,” Augustus said. Regulatory changes from the housing office and service improvements on the MBTA side would ideally “feed off each other,” he said.
Augustus was scheduled to speak with lawmakers last Thursday – after the Codcast recording – about a different crisis: the shelter system. Families needing emergency shelter are up some 80 percent over last year, sparking formal requests for assistance from the federal government.
The secretary doesn’t see an end in sight.
“Unfortunately, right now it doesn’t look like the demand is abating,” he said. “The goal of emergency shelter is for it to be infrequent, rare, and brief, and unfortunately it’s none of those right now.” People are staying longer in shelters because of the tight vacancy rates, and a difficult work permit process makes it harder to support a family even if a bit more housing were to become available, he said.
“All of those kind of challenges combined, as well as just the volume that we’re seeing day after day, is really taxing the system, taking a lot of the time of our team as well as other aspects of state government just to meet this humanitarian crisis and make sure people have the basic kind of human needs met, like a roof over their head and basic health care for these women and and children. So, it is something that we’re gonna be dealing with, I think, for the foreseeable future.”