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It says something that it has taken a Republican governor to finally offer some straight talk in Democrat-dominated Massachusetts about what may be the biggest bread-and-butter issue out there right now: the ever more insane cost of housing.
That frank approach was on display recently when a top Baker Administration official, Chrystal Kornegay, offered up a straight on assessment at a Statehouse hearing on how out of control home prices and rents are hurting not just the poor, but increasingly the middle class as well.
Kornegay, undersecretary of the Department of Housing and Community Development and a veteran Boston community activist, spoke of middle- and working-class families “caught between stagnant wages on one side, and soaring home prices and rents on the other” and forced to choose between new school clothes and making the mortgage or rent payment.
And Kornegay also made clear what’s at stake for the Bay State’s life-science and high-tech economy as home prices and rents skyrocket.
“The skilled workers who form the backbone of our economy are highly mobile,” Kornegay warned lawmakers, according to a copy of her remarks. “If Massachusetts can’t produce the type of housing these workers demand, at a price point they can afford, we shouldn’t be surprised when they look somewhere else.”
That stark and honest read on our state’s messed-up housing market comes after years of happy talk by former Gov. Deval Patrick, who spent more time pitching his casino plans than speaking to the challenge that rising housing costs pose for the state’s beleaguered middle class.
To be fair, Patrick started off sounding the right note on housing.
“I see the young talent and jobs leaving our state, driven away by the high cost of housing,” Patrick stated in his 2007 inaugural address. Then, of course, the Great Recession hit, helping accelerate the decline in housing prices, which peaked around the time Patrick was first elected governor.
Still, that proved to be just a breather, not a course correction. After a couple years of stagnation, it became abundantly clear that the downturn had not reversed the long-term trend towards ever more expensive home prices and rents across Massachusetts, and especially in high-cost Greater Boston.
Yet as housing prices got crazy again, Patrick seemed oddly reluctant to sound the alarm, or even worse, appeared out of touch with the realities of the real estate market and their impact on everyday life in Massachusetts.
Sure, he made the right noises about subsidized housing reserved for the poor or those struggling to stay above the poverty line, a traditional constituency for Democratic politicians. But Patrick had little to say about the increasingly difficult situation faced by buyers and renters in the broad middle of the workforce, who don’t qualify for affordable housing programs and can’t afford the fancy apartment and condominium towers popping up all over Boston and Cambridge.
By the time he offered up his final state of the state address last year, rising housing costs had all but dropped off of Patrick’s radar screen.
In fact, he even appeared ready to declare victory as he touted his administration’s rather modest efforts to boost the number of new apartments built across the state.
“Multifamily housing starts have tripled and commercial development is on the rebound,” Patrick proclaimed in his sole reference to anything related to housing.
Low Supply Drives High Prices
In a bit of a role reversal, it’s the administration of a Republican governor that now appears more willing to face up to the housing sticker shock confronting families across the state.
The problem is not enough housing gets built in Massachusetts, even with the increase in construction over the past couple years, Kornegay told the Joint Committee on Housing, which examined a proposal to lift local zoning barriers to new apartment and condo construction.
Kornegay pointed to Colorado, where more housing is getting built and – surprise, surprise – the number of high-tech jobs is also growing at a much more brisk pace.
“Let’s put all the cranes we see around Boston in some perspective,” Kornegay told members of the legislative committee. “Colorado has 1.4 million fewer residents than Massachusetts does. But over the past four years alone, Colorado has issued 16,000 more multifamily building permits than Massachusetts has.”
“Massachusetts has a housing affordability problem because we have a housing supply problem,” she said.
And not only do we not build enough housing, we don’t build enough of the right type of housing, Kornegay noted.
There’s no lack of luxury condos and apartments to pick from right now, while at the other end of the income spectrum, there are state and federal dollars for affordable housing, even if there is never enough to go around.
What’s not getting built in large enough numbers is housing for middle class families, she noted.
“For this group in the middle, there is nothing,” Kornegay told me in an interview last week. “That group is increasingly getting squeezed.”
Of course, Kornegay and the Baker Administration now face the challenge of backing up this spot-on assessment with concrete action. That’s easier said than done given the often seemingly intractable opposition to new housing of any type, not just in the suburbs, but in some urban neighborhoods as well.
In a first step, the Baker Administration said it will be looking at rolling unused state land onto the development market to spur the construction of more housing.
Kornegay hopes to have some ideas to discuss towards the end of the year.
Right now, she is in information-gathering mode, meeting with local officials across the state to talk housing.
While acknowledging local zoning can be an obstacle, Kornegay is stressing a collaborative approach to working with local communities to do what’s in the best interest of the state and its economy, which means getting more housing built.
“Change is hard anywhere – change is really about the unknown,” Kornegay noted. “Nobody likes change and real estate development is all about change.”
