Historically, workforce housing has been hard to define. It’s also been difficult to find here in Boston. In an effort to change both of those things, the ULI Housing and Economic Development Council, co-chaired by myself and Matt Zahler of Trinity Financial, recently released a report aimed at better understanding workforce housing demand, and proposing solutions to close this housing gap. The ULI report classified housing in three ways: affordable, market rate or luxury housing, and the huge middle gap known as workforce housing.
But just what does “workforce housing” even mean? Historically, people have equated it to “middle-income housing” and think it applies to people like policemen and firefighters, but it’s truly much more than that. For the purpose of this report, workforce housing was defined as those that fit within 80-120% of AMI (area median income). The people that typically fall within this bucket earn too much for affordable housing and not enough for market rate housing (typically north of 180% of AMI).
Greater Boston’s housing prices are among the highest in the nation, and the region needs more housing to attract and retain the workforce that a growing economy demands. However, as the report cites, there is growing concern that the high housing costs may present a significant impediment to long-term economic growth. Unfortunately, high development costs make it difficult to produce units that can be rented or sold at prices affordable to middle-income households.
As a result, the report reveals what we’ve been saying for some time now, that we’re not building enough housing on all fronts, but especially for the middle. While this type of workforce housing is being built in surrounding communities like Everett, Malden, Chelsea, and Revere, it is not being built in Boston.
So what now? The next thing the ULI HED Council will focus on is how to propose solutions to be able to build this necessary workforce housing. Right now, it’s too expensive to build downtown, so we need to find ways to collaborate with developers and legislators and influence policies that help solve this problem and make workforce housing more readily available.
The good news is, it seems we’re trending in the right direction. Just last week, Related Beal topped off its project in downtown Boston’s Bulfinch Triangle, which is due to include 239 units designated as affordable or workforce housing (30 to 165% of AMI). The development is said to be the first dedicated non-market-rate building in downtown Boston in more than 25 years. Additionally, a new proposal at 270 Dorchester Street in South Boston would set aside nearly half of that building’s 150 units for workforce housing (in this case 60-120% of AMI).
I encourage you to download the complete ULI report, Building for the Middle: Housing Greater Boston’s Workforce and feel free to contact me with any questions you may have regarding workforce housing or the Greater Boston multifamily sales market.