MA Homebuilding, Affordability Gets An "F" Grade In Recent Report

MASSACHUSETTS — There are a few things we know for certain about the state of housing in Massachusetts.

First, homes are expensive. Second, there aren't enough of them for the population of the state. Third, the problem has grown so unruly that the state government is developing a plan to address the current crisis, but also, according to Gov. Maura Healey, to build "a better future for Massachusetts, one where everyone has a place to call home."

The unspoken part of that last quote is that, currently, it's difficult for state residents to find a place to call home.

A recent report from Realtor.com drove that unspoken reality home, giving Massachusetts an "F" rating, ranking 50th out of 51 states and the District of Columbia. (The only state that ranked lower? Hi-Neighbor! It's Rhode Island.)

The report offered state-by-state grades based on affordability, the share of an income spent on "median-priced listings", permit-to-poluation ratio and new-construction premiums.

What does affordability mean in this study?

"As a general rule, we say that a home is affordable if the mortgage payment on it makes up 30% or less of a household’s monthly income," the publication explained. "For each state, we calculate how much of the median household earnings would be spent on a mortgage on the median-priced home listing from 2024, assuming a 10% down payment and a mortgage rate of 6.75%."

There are multiple reasons why Massachusetts received low scores, but Realtor's report drilled down on one thing in particular getting in the way: Zoning.

Here's what Realtor had to say about it:

Zoning code in Massachusetts is complex and hard to navigate. The National Zoning Atlas—a project dedicated to digitizing, demystifying, and democratizing information currently hidden within roughly 30,000 U.S. zoning codes—reports that in Massachusetts, there are 16 zoning districts per jurisdiction and 131 pages of zoning code per jurisdiction (including 1,187 pages in Boston). Not only are these zoning codes onerous, but they are also highly fragmented, with a distinct zoning jurisdiction for every 20,000 residents on average. In a complicated, piecemeal fashion, they cover nearly the entire state. Of Massachusetts’ roughly 7 million acres, 76% are subject to zoning. All of this regulatory complexity costs builders time and money, and those costs are passed on to homeowners.

The builders that do manage to operate in Massachusetts have extra costs imposed on them, but many potential homebuilding projects simply are not allowed to occur. Multifamily construction is severely limited in terms of where it can exist, with the National Zoning Atlas reporting that 54% of zoned acres in the state allow only single-family housing and just 12% of zoned acres allow multifamily housing as of right. These artificial restrictions limit the supply of housing in the state and will continue to result in Massachusetts struggling with affordable housing. When cities restrict apartments and starter homes, it’s not just policy—it’s also pushing out teachers, nurses, and working families.

Six states received an F-rating, including California, Hawaii, Massachusetts, New York, Oregon and Rhode Island. Of those, only Rhode Island ranked lower than Massachusetts in the comprehensive measurement.

To read the full report, click here.

See Also:

• How Competitive Is MA For Local Renters?
• Here's How MA's Tax Burden Compares To Other States