Authors: Barry Bluestone, Catherine Tumber, Nancy Lee, Alicia Sasser Modestino, Lauren Costello, Tim Davis with assistance from James Huessy and William Reyelt
With the core cities of Greater Boston attracting young millennials, and aging suburban baby boomers seeking housing more appropriate to their status as empty-nesters, smaller housing units in both urban and suburban areas are becoming fashionable. Yet Boston and the region’s core cities have an undersupply of multi- unit housing while suburban communities increasingly have an oversupply of single- family housing. As such, the region is on a collision course with shifting demographic techtonics that will continue at least until 2030. Between 2010 and 2030, demographic projections suggest that Greater Boston will be home to 138,000 additional single-person households, 156,000 households with no more than three persons, but only 22,000 larger households of four or more persons. The evolving housing mismatch can be described briefly as follows:
- With the large baby boom generation born between 1946 and 1964 aging, many are looking to downsize their housing by either “aging in place” in smaller suburban living accommodations or moving to smaller urban living quarters.
- Many in the millennial generation born between 1981 and 2000 are seeking to live in urban neighborhoods in Boston and nearby municipalities and find they can do so by doubling up or tripling up with roommates in order to afford rental housing now soaring in price.
- The baby bust generation, born between 1965 and 1980 and at least 20 percent smaller than the millennial cohort, is providing a market for suburban single-family housing as it goes through (delayed) child-rearing, but their numbers are unlikely to be large enough to absorb the existing supply of suburban single-family homes that aging baby-boomers may put on the market plus the number of new single-family homes under construction.
- Working middle-class families are increasingly being priced out of the region’s rental and homeowner market by millennials who are outbidding them for the older stock of duplexes and triple- deckers.
- Low-income households, often facing gentrification pressure, are increasingly finding themselves with excessive housing cost burdens and the potential for homelessness.
While average household size has declined and Greater Boston’s population continues to age, its housing stock beyond Suffolk County remains dominated by the single-family home. Meanwhile, demand for multi-unit housing in all five counties has risen among aging baby boomers, millennials, working families, and low-income households—yet builder a long way from meeting this demand. Once the baby-bust generation passes through its child-rearing years, the demand for this type of smaller housing will likely be even greater. Clearly, the Greater Boston housing market must now plan for what will be an extraordinary shift in housing demand. Unfortunately, the cost of construction and zoning restrictions throughout the region make it exceptionally difficult to synchronize housing supply with housing demand.