Updated: Sep 10, 2018
If you’ve spent any amount of time lately near commercial or residential real estate panels, you’re likely to have heard the buzzwords “workforce housing” upon numerous occasions and for good reason. You see, in all of Boston’s boom in popularity, and with the resulting increase in demand for real estate, we’ve come to a crossroads where housing has become affordable for many of those seeking to live within city limits on less than 6-figure incomes. For perspective, according to Fusion, if you’re a millennial making over $105,000/year, you’re in the top 1% of millennial earners. The top 1%. It’s no wonder millennial buyers are few and far between.
Incomes aside, part of the issue is Boston’s small geographic footprint. People want to live IN Boston and only so many people can fit. Development has also been stunted, partially due to a past aversion to building height and most recently due to the stemmed ability [confidence?] to develop post 2007 housing market crash. While there are certainly additional factors at play, these are the major non socioeconomic barriers we’re facing: Supply is low. With construction costs almost as high as demand for housing, luxury properties are the obvious choice for developers.
Who buys or rents these luxury properties? Not the workforce. Workforce housing, as defined as earning no more than 100% of the area median income ($71,738/year; Boston Census 2012) leaves little margin for $2650/month studios and $4k+/month two beds. Yikes!
So why and how has Related Beal been able to pull off building a residential building in the middle of town, that’s slated 100% to workforce housing while everyone else is standing around discussing the issue? Politics plays a role. Related has also developed a good amount of residential properties in Boston and currently has a few projects currently under construction. Did I mention the city is willing to provide tax credits and equity for the financing of projects aimed at our workforce housing issue? Neighborhoods have a hard time nay-saying development proposals aimed at keeping the neighborhoods diverse.
Regardless of the circumstances, one must have much respect for this development as it is one of the first in decades perhaps, that is aimed specifically at workforce housing. There is a notable lack of it and we’ll be continuing to hear the discussion as our housing boom plays out.