Publication

Crowded In and Priced Out: Why It’s so Hard to Find a Family-Sized Unit in Greater Boston

Tim Reardon, Director of Data Services

Sarah Philbrick, Socioeconomic Analyst II

Jessie Partridge Guerrero, Research Manager

March 30 update: In response to requests from municipalities around the region, MAPC conducted a metro regional regional analysis of family-sized units and prepared a supplemental report available for download here.



Executive Summary

Finding a home to rent or buy in Greater Boston is stressful. Prices are high, available units are scarce, and competition is stiff. For families with children looking for units with three bedrooms or more, the process can be especially challenging.

Why is this the case? Partly because many newer buildings offer mostly studios and one- and two-bedroom units. However, other factors may be at play, as well. Who else is competing for the large units that are on the market? Are the limited number of large units being produced actually occupied by families? And how many empty nesters are staying in their family homes long after they no longer need all those bedrooms? A better understanding of these dynamics is fundamental to helping the region to make the best use of the existing housing stock and build the homes we need to meet future demand.

To help address these challenges, MAPC set out to learn who is living in the “family-sized” units in thirteen cities and towns in the region’s Inner Core. We looked at the number of people living in large units (defined as those with three or more bedrooms) and the age of the head of household. We broke that information out by whether the unit is rented or owned, what kind of building it is in, and how these characteristics have changed over time. We also examined overcrowding in smaller units to better understand the full demand for larger places to live.

The evidence is clear that there are not enough affordable options for families with children: as detailed in the report, 46% of those households pay an excessive amount of their income for housing, and 9% are considered overcrowded. Troublingly, we also found that most family-sized units are not, in fact, housing families with children. Such families occupy just 39% of all the large units in the study area. Meanwhile, an equal share of large units is occupied by only one or two people. Large owner-occupied units—whether single family homes or condos—are more likely than rental units to be lived in by just one or two people, mostly older households without children present. All told, fully one quarter of all large units—more than 50,000 homes—are occupied by an over-55 household of only one or two people.

Large rental units are somewhat more likely than large homeownership units to house families with children. However, those families face stiff competition from roommate households, who occupy more than a third of large rental units. With the combined incomes of multiple adults, roommate households can pay, on average, $450 more in monthly rent than the average family in a large unit. This makes it easy for roommates to outbid families for the available homes. We also find that most roommates have few other options: fewer than one in ten roommates could afford the median priced one-bedroom unit in the area. It also seems that the problem is getting worse; the lack of affordable smaller options has pushed more younger householders into roommate households since 2000, increasing competition for the limited supply of large units.

Our analysis shows that building new family-sized units is certainly part of the solution to this crisis, since newer units are actually more likely than older units to house families: 52% of large units built since 2000 are occupied by a family with a child (compared to 38% of large units built prior to that year). However, building those large units is expensive, and most large units in the future will be the ones that already exist today. Making those existing units available for families also has to be part of the solution. Based on past demographic trends, we estimate that current householders aged over 70 may return 22,000 large units to the market before 2030, but those units will meet only about a third of projected demand.

These results shed light on a topic of great concern to many people around the region, and demonstrate there is no one cause, and no one solution, to the lack of family housing in Greater Boston. The challenges facing families are symptomatic of the region’s broader housing crisis resulting from the underproduction of housing of all types, at many price points, across all communities. The needs of families cannot be addressed in isolation, but require comprehensive action to produce more housing to meet the needs of all the region’s residents today, and tomorrow.



Introduction

Finding a home to rent or buy in Greater Boston is stressful. Prices are high, available units are scarce, and competition stiff. For families with children looking for units with three bedrooms or more, the process can be especially challenging.

Many people are concerned (and this report confirms) that families with children are more likely to be overcrowded and paying an excessive amount of their income on housing, indicating a lack of suitable units. Some fear that the production of too many studios and one- and two-bedroom units is changing the character of neighborhoods. One recent study (1) suggested that the lack of housing for larger families has contributed to a decline in Boston’s school-age population. Housing developers, on the other hand, point to the strong market for smaller units and the higher construction costs for larger units as rationale for delivering mostly studios and one- and two-bedroom units.

In order to help us understand the underlying dynamics of the demand for these units, we sought to answer the question “who’s living in Greater Boston’s three-plus-bedroom units?” Families with children? Empty nesters? Sets of roommates trying to maximize their rental budgets? We also examined how the supply and occupancy of larger units has changed over a 15-year period, and we have forecasted how many large units may be made available by turnover in the coming years. A better understanding of these dynamics is fundamental to helping the region make the best use of existing housing stock and build the units needed to meet future demand.

Our study area encompasses thirteen municipalities at the core of the region: Boston, Brookline, Cambridge, Chelsea, Everett, Malden, Medford, Milton, Newton, Quincy, Revere, Somerville, and Winthrop. With the exception of Milton, all are members of the Metropolitan Mayors Coalition (MMC), a group of cities and towns whose leaders gather to exchange information and create solutions for common problems. Recently, mayors and municipal managers of the MMC formed a Regional Housing Task Force to address Greater Boston’s housing challenges in a coordinated manner. In October 2018, the Task Force announced a set of housing principles, a housing production goal for the region, and detailed strategies to preserve and produce more housing. MMC member municipalities are now working to implement those strategies with the assistance of MAPC’s policy, organizing, and research staff. This report is intended to help MMC leaders and stakeholders better understand the region’s housing utilization and plan for housing to meet the needs of residents today and in the future.

We refer to the geography covered here as the “MMC Study Area” (or simply “study area”), with the caveat that MMC members Arlington, Braintree, and Melrose could not be included due to the boundaries of the Census statistical areas used for the analysis.

Our principal source of data is the 2012-2016 American Community Survey (ACS) Public Use Microdata Sample (PUMS) for Greater Boston. This data source, which allows for custom tabulation of household and housing unit characteristics, is published for statistical areas called Public Use Microdata Areas (PUMAs), which must contain at least 100,000 people and usually cover multiple municipalities. The dataset agregates ACS surveys collected over a five year period. For some statistics, we referred to ACS tables published by the Census Bureau, which are drawn from the same set of surveys.

We specifically looked at the number of people living in large units (defined as those with three or more bedrooms) and the age of householders, broken out by whether the unit is rented or owned, and how these characteristics have changed across time. We also looked at how many households and families in the study area are overcrowded, with more than two people per bedroom, to better understand the latent need for larger units, or more affordable large units.

Due to the geography of the statistical areas used for the analysis, only Boston and Cambridge could be analyzed at the municipal level; however, MAPC found no statistically significant difference in the occupancy patterns of these municipalities as compared to the entire study area. Therefore, municipal-specific data are not presented here. Finally, it should be noted that the analysis focuses on occupied households where the residents responded to the American Community Survey. We do not currently have information available to quantify or characterize the number of vacant large units in the study area.

(1) Peter Ciurczak, Antoniya Marinova, Luc Sschuster; Kids Today: Boston’s Declining Child Population and Its Effect on School Enrollment; The Boston Foundation, January 2020 (https://www.bostonindicators.org/reports/report-website-pages/kids%20today)



Paying Too Much and Overcrowded

The region’s housing crisis is no secret. Rapidly growing demand and limited supply have driven housing prices in Metro Boston to among the highest in the country. Houses and apartments available to buy or rent are increasingly unaffordable, especially for households with children. The median advertised rent for a three-bedroom unit in the study area was $3,000 in 2018, according to MAPC’s analysis of online rental listings. A family would need to have an income of at least $120,000 to afford that median unit without spending more than 30% of their income on rent (the standard threshold for “housing cost burden.”) Meanwhile, the median price of home sale transactions in the area was $595,000 in 2018, well out of reach for many families. Few families earn enough to comfortably afford the units that are available. In the study area, 46% of all households with children are housing cost burdened and half of those—nearly a quarter of all households with children—are severely housing cost burdened (spending over 50% of income on housing costs).

Households with children are also much more likely to be overcrowded. Drawing from research conducted for the U.S Department of Housing and Urban Development (2), we define overcrowding as more than two people per bedroom (3) . Using that definition, 8.8% of households with children in the study area are overcrowded, compared to just 0.4% of households without children. This disparity is even more pronounced for families of color. Households with at least one child and a householder of color are more than twice as likely to be overcrowded as households with a child and a White non-Hispanic householder (4).

In total, we estimate there were 11,800 overcrowded families with children in the study area from 2012 – 2016. Of these, over 7,000 were families of five or more people, who would need three or more bedrooms to avoid overcrowding; another 1,000 were families of four people currently in a one-bedroom unit. In light of the fact that so many families with children are cost burdened, and in many cases overcrowded, it is essential that we create new affordable units for them to inhabit, or that we make existing units both available and affordable. In order to tackle this objective seriously, we have to understand who is currently living in larger units, and what that might tell us about useful housing strategies.

(2) Econometrica, Inc.; Measuring Overcrowding in Housing; U.S. Department of Housing and Urban Development, Office of Policy Development and Research; September 2007

(3) In this analysis studios are treated the same way as 1-bedrooms.

(4) "White households" defined as household headed by White, Non-Hispanic householder. "Households of color" defined as household headed by Non-White or Hispanic householder.



Who's Living In The Family Units, Anyway?

While families across the region face the stress of being cost-burdened and overcrowded, most large units in the study area (gray outline) are not being lived in by families with children. There were an estimated 221,000 large units in the study area in 2012 - 2016, comprising 38% of the total housing stock and housing 52% of the study area population. Of the 201,000 large units that are occupied, 53% are single family homes, 5% are condominiums in multifamily buildings, and 42% are rental apartments in multifamily buildings.

The map below shows the share of units in each census tract that are 3 or more bedrooms, as of 2014 – 2018. It shows that the relative availability of large units varies across the study area, with higher shares in more suburban communities such as Newton, Milton, Brookline, and Medford, as well as some Boston neighborhoods such as West Roxbury, Hyde Park, Dorchester). The share of large units is lowest in the densest parts of Boston and Cambridge.