From 1995 through 2005, housing prices and rents in Greater Boston soared, making it one of the most expensive metro areas in the nation. Because of escalating housing costs, more than a third of the region’s homeowners were paying more than 30 percent of their income for shelter and more than half of all renters were similarly challenged in their ability to afford housing and have enough of their incomes left over to pay for other necessities. Without substantial rental subsidies, low-income households were not able to afford housing at all and research revealed that Greater Boston’s housing costs were a major factor in the region’s slow growth in employment and in the region’s loss of young working families. In its wellknown report, A New Paradigm for Housing in Greater Boston, first released in September 2000, the Center for Urban and Regional Policy noted that escalating housing prices and rents created a “moral obligation” to provide affordable housing for the region’s households and an “economic necessity” to assure the region’s continued prosperity. Now we face a housing paradox in Greater Boston. Home prices are still too high . . . but they are falling too fast. This combination leaves much of the affordability problem unresolved at the same time that an explosion in subprime mortgage lending and falling prices have combined to cause a dramatic increase in home foreclosures and the possibility of a downward price cycle in many neighborhoods. This could lead to abandonment, vandalism, and community disintegration. Solving the housing paradox will require a sophisticated set of public policies.
From 1995 through 2005, housing prices and rents in Greater Boston soared, making it one of the most expensive metro areas in the nation. Because of escalating housing costs, more than a third of the region’s homeowners were paying more than 30 percent of their income for shelter and more than half of all renters were similarly challenged in their ability to afford housing and have enough of their incomes left over to pay for other necessities. Without substantial rental subsidies, low-income households were not able to afford housing at all and research revealed that Greater Boston’s housing costs were a major factor in the region’s slow growth in employment and in the region’s loss of young working families. In its wellknown report, A New Paradigm for Housing in Greater Boston, first released in September 2000, the Center for Urban and Regional Policy noted that escalating housing prices and rents created a “moral obligation” to provide affordable housing for the region’s households and an “economic necessity” to assure the region’s continued prosperity.
Now we face a housing paradox in Greater Boston. Home prices are still too high . . . but they are falling too fast. This combination leaves much of the affordability problem unresolved at the same time that an explosion in subprime mortgage lending and falling prices have combined to cause a dramatic increase in home foreclosures and the possibility of a downward price cycle in many neighborhoods. This could lead to abandonment, vandalism, and community disintegration. Solving the housing paradox will require a sophisticated set of public policies.
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