Posted on November 9, 2005
Home prices in Eastern Massachusetts could be reduced by $100,000 and land consumption could be cut in half if the state were to adopt smart growth zoning practices and abandon its current pace of consuming nearly a football field for every unit produced.
To download the study, click here
“Open Space, Housing Construction and Home Prices – What’s the Payoff from Smart Growth,” looks at housing prices and land use in the Rt. 128-495 corridor and estimates how much land would be consumed if the state kept up with demand under current large-lot zoning principles.
Researched and written by Edward Moscovitch, president of Cape Ann Economics, the study found that if development in the Rt. 128-495 corridor followed the national smart growth pattern of .25 acres per unit instead of the recent pattern of 1.08 acres per unit, it would be possible to cut vacant land consumption almost in half, roughly double the number of units built and drive down home prices in 2003 dollars from $400,000 to $293,000.
It would take several years for increased production to impact home prices. Combining inflation with the impact of additional construction, home prices in 2015 would be $450,000 instead of $600,000, Moscovitch estimates.
“Simply calling for more production to address the state’s housing shortage doesn’t take into consideration current land-use practices,” said Edward Moscovitch, an economist and former state budget director who authored the study. “If we built more housing at the current rate of land consumption, we’d quickly run out of land trying to keep up with demand.”
The study was commissioned by the Massachusetts Housing Partnership (MHP), with support from the Boston Foundation and the Warren Group, which publishes Banker & Tradesman. It was released on Monday, November 7 at a public discussion forum sponsored by the Citizens’ Housing and Planning Association.
Other key findings include:
--- From 1993 to 2003, Massachusetts built 40,000 less units than it needed, based on housing demand. Had it kept up, home prices would’ve been lowered by $31,000 per unit.
--- In the period from 1998 to 2002, the average lot size for single-family homes in the Rt. 128-495 corridor was 1.3 acres. Counting condominiums and apartments, the average lot size was 1.08 acres of land for every unit built (a football field is 1.3 acres, including end zones).
--- A change in zoning and regulatory practices across the region to smart growth densities could cut home prices by close to 25 percent while simultaneously reducing land consumption by 50 percent.
“A lot of what’s driving this is the fear by communities that increased growth will bring in children and drive up school costs,” said Moscovitch. “As a result, we’re chewing up our landscape in a futile effort to make sure development occurs someplace else.”
“This study shows that Massachusetts cannot continue to produce housing in a non-smart growth manner and have any impact on the very high cost of housing for our workforce,” said Eleanor White, co-chair of the Commonwealth Housing Task Force, a coalition of regional leaders whose efforts have resulted in the passing of smart growth zoning legislation known as 40R and the drafting of a legislative proposal (40S) to compensate towns for school costs if they build ‘smart-growth housing’.
“If we want to retain any open space at all over time, we had better heed the warnings in this report to begin to zone for housing on smaller lots," said White.
The study is part of an ongoing MHP effort to study the state’s housing needs and its potential impact on land consumption. MHP is currently working with the Massachusetts Institute of Technology and the Warren Group on a method of tracking land-use practices in the Rt. 128-495 corridor to annually compare how communities are consuming land.
“I think what we’re seeing that we’re using far too much land,” said Clark Ziegler, MHP’s executive director. “We can’t simply build our way out of the housing crisis. We have to change the rules to allow for development on smaller lots.”
Approximately 60 leaders – including Office of Commonwealth Development Chief Doug Foy – attended Monday’s breakfast forum at the Boston Chamber of Commerce’s Conference Center. After Moscovitch provided an overview, panelists discussed the study.
“It shows that we need to compel communities to accept more density,” said Kristina Egan, director of the Massachusetts Smart Growth Alliance. “We need to take steps to expedite permitting, find ways to take advantage of downtown sites and state properties and eliminate antiquated zoning that promotes sprawl.”
“In attempting to limit impact on services, every community has been quite successful in keeping people out,” said Moscovitch. “But that means prices go up.”
“Every decision a local government makes is sensible from an economic standpoint,” agreed Marc Draisen, executive director of the Metropolitan Area Planning Council. “In order to create growth, we need to create a real partnership between the state and the municipalities.”
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