The Joint Center for Housing Studies at Harvard University released its annual report on the state of America’s rental housing yesterday and its conclusions were not that surprising: “Multifamily housing construction has accelerated to its fastest pace in nearly 30 years but has still not been sufficient to meet surging demand,” as the press release puts it.
The inability of supply to meet demand is even worse than simply resulting in rising rents, since renter incomes are remaining stagnant.
“Producing rental units at the price that the median renter can afford is difficult,” the report stated. “Local land use regulations often restrict the area available for multifamily development, particularly in suburbs, which can increase competition for available sites and raise land costs. . . . In addition, development economics rest heavily on allowable densities, but local zoning restrictions often limit the number of units in multifamily developments.”
According to the report, the review process mandated by many municipalities for development can also drive up costs and, combined with already high construction costs in hot markets, encourages high end development that can pay for itself more quickly.
“The barriers to the development of lower-cost units are numerous,” the report stated. “At the local level it will take significant political will to overcome concerns about increased density — and rental housing itself — to reduce the regulatory barriers to development . . .”
The JCHS report’s conclusions mirror the findings of The Boston Foundation and Barry Bluestone in their annual housing reportcard, issued last month.
“Land, construction and development costs in Massachusetts are so high and zoning against high-density developments is so pervasive that builders simply can’t produce housing that working and middle-income families can afford,” wrote foundation president Paul Grogan in the cover letter. “Virtually all new low-density projects cater to the high end of the market.”
Meanwhile, in Houston, a one-bedroom apartment in a brand-new luxury high-rise rents for $1585 a month — $912 fewer than Boston’s median monthly rent of $2497.