Many potential avenues cited to help alleviate costs

The Greater Boston Housing Report Card 2015 was released last week, the news was not good. The report called the situation in Boston “fundamentally unmanageable,” thanks to high development costs and strong demand for land. The report urged aggressive action in order to help the market, with seven policy recommendations for Boston lawmakers:

1. Encourage Larger Projects – Boston new construction, the report explained, has trends towards small, sub-25 unit rental developments, in part to alleviate some of the “Not in my Backyard” (NIMBY) complaints that larger projects have historically generated in the city. However, the report challenged that wisdom, stating that even buildings with as low as 10 rental units have created NIMBY concerns, making the complaints inevitable no matter how large or small the unit.

Economically, costs for new construction start becoming feasible for units above 50 units per project. While some projects should be treated differently and receive a small amount of units, a majority of multi-family rental and condo units, the report argued, should be in larger projects. Higher-density buildings reduce the cost of land per square foot, allow more efficient and cost-effective buildings, reduce sprawl and increase walkability and open space.

2. Create Incentives for Land Donations – Another way to reduce the cost per square foot would be for Boston to provide incentives for the donation of unused or underutilized land through tax breaks, density bonuses and relaxing height restrictions. While there are such programs in place already, they are primarily focused on conservation.

3. Reform Zoning Rules – The 2013 Greater Boston Housing Report Card found that “inclusionary zoning,” or zoning that allows developers to construct more units of housing on a piece of land so long as they set aside affordable units, was effective at increasing production while also creating affordable housing. The 2015 report suggests incentives for inclusionary zoning are not enough to alleviate the scale of the current problem.

One solution to this is reforming inclusionary zoning rules. Currently, if a development sets aside 25 percent of its units for affordable housing, then all the units in the project are counted towards the 10 percent affordability goal for the municipality, which excuses the area from more inclusionary projects. Raising the 25 percent threshold to 35 or 50 percent would help areas truly meet the overall 10 percent goal.