Healey aims for ‘housing abundance’ in statewide plan

The astronomical cost of housing for Massachusetts households across the income spectrum and a bleak outlook for the new units needed over the next decade underscore the focus of the Healey administration’s new housing plan for the next five years — more production. 

“At the root of our challenge for the cost is a shortage of homes. And it’s a shortage, as I say, that’s built up over many years, as our state was not building the housing that we needed to keep pace with our economic growth,” Gov. Maura Healey said at a press conference on Thursday.

The administration has long pointed to a goal of increasing the statewide supply of year-round housing by 222,000 units over the next decade — a 7% increase in supply.

The plan released Thursday calls this goal the “minimum number of additional homes needed to ensure that an absolute shortage of housing is not the main cause of high costs.” It lays out pages of strategies that, if implemented and executed, could enable the state to “achieve a state of housing abundance.”

It adds that every region of the state will need to add homes to meet this target, though some will need to add more than others. It targets the metro Boston area, northern Middlesex, central Massachusetts, Nantucket and the South Shore as areas that require a 7.5% to 10% increase in their housing to keep up with demand.

Southeastern Massachusetts needs a 5% to 7.5% increase in housing, the report says.

Berkshire County, Franklin County and Cape Cod were identified as having significantly less need — requiring less than 2.5% growth. An Executive Office of Housing and Livable Communities official said at a briefing on Thursday that this is not because they don’t require housing solutions, but because they have different needs.

On the Cape, for example, the issue is less that there aren’t enough housing units, but that existing units are converted into luxury seasonal housing for non-year-round residents. Housing policies in those areas should be focused on targeting their specific needs, they said.

Between 2010 and 2020, the state added an average of 19,000 units per year, but only 11,600 homes were issued building permits in 2023, the report found. As production hasn’t kept up with demand, the share of homes available for sale or rent has shrunk to only 1.6% — a rate that makes competition for homes intense.  

As the production has slowed and the vacancy rate has shrunk, costs have skyrocketed.

Median home prices rose 73% from 2000 to 2023 after adjusting for inflation, while median household income rose only 4% in real dollars over the same period, the plan says. As a result, fewer than one quarter of home sales from 2010 to 2019 were affordable to low-moderate income households.

And Bay Staters who find housing are spending more of their paychecks to afford rents and mortgages.

The number of households paying more than 30% of income has been rising across all income groups. More than one-quarter of middle-income households are considered “cost-burdened,” or spending more than a third of their paychecks on monthly housing costs, and more than three-quarters of very low-income households.

The 41-page plan says an additional issue is that as Baby Boomers age, they are not moving out of their long-term family homes, even as their households grow smaller. After their children move out, seniors who live alone or in couples are staying in three- or four-bedroom homes, which hasn’t created opportunities for younger generations to move into spaces that fit growing families.

Those families are moving to other states where they can afford housing that fits their needs. “‘Business as Usual’ demographic trends indicate that Massachusetts may see no population growth from 2025-2035,” the plan says. “Over that time, half a million Millennials and Gen Z residents will be forming households. Not as many households will be freed up by Baby Boomer and Silent Generation households that are dissolving or moving away. Even with no population growth, Massachusetts needs 73,000 additional homes to accommodate that demographic demand.”

\To address this severe need, the plan focuses on building new units across the state, but especially in the regions identified as high need for new development. It leans on policies featured in a 2021 housing law, the MBTA Communities Act, that requires new housing to be built near public transit, and affordable housing tax credits made available through a 2023 tax law. “These are the first steps, but certainly not the last,” it says. “We can get to 220,000. We can get there. I know we can get there,” Healey said Thursday. “We can work together, bring that intentionality and bring the energy and the teamwork to it.”