Number of polluted ones who are high due to tenants – Harvard Gazette

In the middle of a nationwide lack of apartments and a dark economic outlook, a new report shows that the number of those who have been affected by the affordability of rent have reached a record high.

From 2023, 22.6 million households spent more than 30 percent of their income for rent and supply companies by 2.2 million since 2019. According to the latest research from the Joint Center for Housing Studies in Harvard, more than half or 12.1 million people who have spent more than 50 percent of their income for housing costs.

The deterioration of the affordability affects tenants in all income groups. Tenants with medium-sized incomes that earn $ 30,000 to $ 75,000 made up for 41 percent of all households burdened by costs. Those who earn $ 75,000 were 9 percent. A full -time job is not a guarantee that the apartment will be affordable. In fact, 36 percent of the full tenants were costs in 2023.

In this edited conversation, Chris Herbert, the director of the center, explains why the rent continues to become less affordable and which cities can try.

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The number of households that have to deal with housing costs is at a historical high. What is that going?

There are two things. Since 2021 we have seen the rents that rose in double digits immediately after the pandemic. In 2023 they started to slow down. In 2024 they grew more like an inflation clip, ie “better”. That was a function of the very strong demand for pandemic. The supply could not keep up and led to high rents.

It occurred on the back of what has deteriorated in the past two decades. There was an affordability crisis, i.e. how many tenants became cost -intensive.

After the big recession, we achieved a highlight around 2011 in terms of the numbers and the proportion of costs that were costly. From there, things were gradually getting a little better.

But under the surface, during the total share of tenants that were costly, the proportion of tenants who worked all year round, full -time, with not big but not terrible jobs, recorded a strong increase in the proportion of tenants that became costly.

What happened was that the problem of costs for the affordability of costs/living space was really democratized. It spread from only among the poorest households to more working people, especially young people.

There has been a real deterioration in the crisis since the pandemic, but it was already worse and worse, especially for workers.

Many other tenants with medium and higher incomes have to deal with housing costs. What does this shift explain?

This is a kind of question of 64,000 US dollars. The most common answer that people give is that we have not built enough living space. This is right up to a certain degree. The vacancy rates of the apartment buildings had become quite tight, especially in view of the pandemic. So there was the feeling that we didn't have enough apartments.

This is a piece of history, but we have almost overgrowed it. The other part of the story is that the costs for the production of residential units are very high. There is this idea: “Build more houses and the price will decrease.” You have to consider that builders only build apartments if it makes economic sense to do this.

The costs are delivered in four large buckets: there is land, and there is a large part of the conversation near the zoning and the fact that we do not have enough land for apartments with high density. And then there is construction costs – that is 60 percent of the cost of a residential building. The country is usually only 20 percent. And then there is the soft costs: architecture, engineering and then financing. These costs increase with a difficult approval process. They are about 10-15 percent of the costs, so not a big driver. However, the financing costs are a great driver if interest rates rise to 7 percent.

Living is expensive for a variety of reasons, zoning is one of them, construction costs and the fact that we have not improved the efficiency in the construction sector, and then the complexity of the approval process and the high capital costs.

Boston's mayor candidates, Josh Kraft and the Mayor Michelle Wu, said that the affordability of living space was a top problem in the upcoming elections. Do mayor and cities have real tools to reduce housing costs?

The regulatory processes were given many discussions and emphasis on regulatory processes. How restrictive is your zoning? How high is your approval process? How difficult is it for a developer to suggest an appropriate development and have it approved and work on it? A big deal that cities are doing is to follow up their zoning. Cambridge carried out various iterations to look at their zoning.

In connection with this, the approval process can be: The affordable housing cover in Cambridge says if you present a development that fulfills the criteria in relation to setbacks and density and other factors, we will approve it, and you do not have to go through a whole process of design check. So cities can.

How does that affect the affordability? It reduces the soft costs. To the extent that you give me a bigger density, I can possibly get a better value of the country. The challenge is that the country's value is based on how many units you can put on it. And so if you tell me that I can put two units on it and the country was worth a million dollars, for example, and then you say: “Now you can put 10 units on it.” That is 100,000 US dollars per unit. I just saved a lot of money.

As soon as you tell a developer that you can set 10 units on it, the developer says: “I will pay $ 5 million for this piece of land.” So you don't get that much savings from the density. In this regard, all cities can try to make it so that there is no more friction and more pressure on prices to rise faster than usual.

You will find it difficult to solve the affordability problem through zoning. And if you talk about households with lower incomes or even households with medium income, you have to talk about how to subsidize the costs of this apartment. This means that cities have to find paths to get money.

Boston was very good with regard to link payments for commercial development, which generates an appropriate amount of money, as well as Cambridge and an affordable apartment foothills that get money from it. You can use some general funds from your budget.

You can also look for special taxes. Boston presented a transmission tax proposal that the former mayor Marty Walsh would generate an estimated approximately 100 million US dollars a year for affordable housing construction. Mayor WU followed it, but the state legislature hindered them.

A big problem for cities is how we get more financial resources to subsidize accommodation. One of the things that cities can do is to catalog the whole country that they own. This country can be an important subsidy. Boston did that.

“A big problem for cities is how we get more financial resources to subsidize accommodation. One of the things that cities can do is to catalog the whole country that they own. This country can be an important subsidy. Boston did that. “

Chris Herbert

And maybe boost innovation into the design of living space. Housing Innovation Lab in Boston has examined how we get modular housing, more efficiency in factory production and how the city of Boston can play a role to help scale.

Any promising political ideas or positive trends on the horizon?

We are definitely in a situation in which we have to try many things. There are a lot of experimentation. There is a piece in the measure. State Bond Bill for a revolving credit fund. People have come to realize that the affordability of living space was a long -term problem that was long -term when manufacturing, and therefore we must have a long -term vision as we addressed this.

One of the great possibilities that residential construction rises in value is the inflation of land values. Houses are written off, and so the value of a house built in 2000 should be less today. But the living values ​​here are twice as high as in 2000, and that is all in the land value. They are land values ​​that capture a large part of the inflation of real estate prices. One thing that you have to do is to prevent land in the long term that this inflation prevent the residents of the house from it.

The other piece is when [property owners] If you manage to cost the housing costs, you can start calculating rents that are much cheaper. Combine that you can freed or limit property taxes, cost -effective land, inexpensive rents and reduced costs from reduced property taxes with public property or non -profit property, you can start receiving apartments that are affordable.