Housing as Economic Growth? Strange Idea, But Not in Massachusetts

Given the pain so many states such as California and Florida are suffering because they have a glut of new, empty houses, and given that Massachusetts has weathered the recession better than a lot of those states, I was somewhat surprised to read that housing construction could be the future answer to the Bay State’s economic problems.

This is the core proposal in Recipe for Growth, a recent report by Massachusetts Housing Partnership (MHP). The agency has been a key player in the state in helping people find affordable housing, including homeownership, since the early 1990s.

Massachusetts faces a growing problem in competing with other states for jobs, the report argues, because the large-lot zoning in many towns makes it all but impossible to build homes. Housing prices are high, not because the area is so desirable but because of the scarcity of housing. So young families leave the state and go to places with similar intellectual capital, such as Seattle or Raleigh, but less of a housing crunch.

This new report has drawn a fair amount of criticism from planners at the municipal level who feel it overstates the importance of housing in the state’s economy. The planners are worried about the state imposing new mandates on towns and cities to produce housing.

It’s not an unreasonable fear, given the way the state’s affordable housing law (known as “40B”) has forced large housing developments down towns’ throats over the years, The law allows developers to make an end-run around local zoning regulations if they make at least 25% of the units in their projects affordable to people making 80% or less of area median income. In general the only way for towns to avoid this is if at least 10% of their housing meets the state’s definition of affordable. The law has been on the books since 1969, but towns have faced increasing pressure in recent years as more subsidies have become available for 40B developers to draw on.

More recently, it seems the state is de-emphasizing affordable housing and pushing towns to build any kind of housing. The proposed Land Use Partnership Act would offer incentives to towns and cities, such as funding for planning and more zoning controls, if they agree to carve out areas where they’ll allow more dense housing development. And then there’s MHP’s report, which makes housing itself the answer to the state’s slow economic growth.

It seems as if the long-standing arguments for affordable housing as something every resident has a right to no longer carry enough weight. So instead housing advocates are promoting housing as key to the state’s continued prosperity. More housing, particularly a variety of single family homes, townhouses and apartment and condo buildings, would help give people options to keep them here and give employers reason to grow here.

David Holtzman is a planner for Louisa County, Virginia, a freelance writer, and a former Shelterforce editor.


  1. Great post, though I do want to clarify a few things about MHP’s report. We were not suggesting that housing is “the answer” to the state’s slow economic growth, but rather that future job growth cannot occur in Massachusetts unless we allow the private market to produce more housing at smarter densities. The major engines of growth will continue to be our highly educated workforce, university-driven innovation, and low reliance on conventional manufacturing. Economist Ed Moscovitch found compelling evidence that those positive factors are not sufficient to overcome the drag that inadequate housing supply puts on the state economy.

    I haven’t seen any backpedaling from affordability in state housing policy but iIf we don’t fix our market-rate housing problem I’m convinced there will never be enough revenue to sustain our assistance to low income households.

    Clark Ziegler, Executive Director, Massachusetts Housing Partnership


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