11.08.2024

Dueling views on Dems debacle | Lesson for Boston? San Francisco dumps progressive mandates to spur housing | Housing starts hit new low in the Hub | Contrarian Boston subscribers weigh in on presidential election | Save the date: Contrarian Boston and panel of local experts to dive into the housing crisis |

Housing crisis blues: Construction of new homes and apartments hits new lows in Boston, where progressive policies have helped derail a decades-long building boom

Democratic leaders across the the country are soul searching after being trounced by Donald Trump on Tuesday.

If only the election debacle were to spark a rethink by Boston Mayor Michelle Wu and other blue city leaders of their uber progressive development policies, which are killing new housing, even as prices and rents soar.

Housing starts in Boston tumbled to their lowest point in years this fall, with developers issuing building permits for just 82 new units in all of September and October, a review of city records by Contrarian Boston finds.

Overall, the city is on track to see fewer than 2,000 new housing units built in 2024, a decline from even last year’s abysmal numbers, and only a little more than half the amount of housing built in the city back in 2022, as Boston’s decades long building boom drew to a close.

It is quite a fall from grace for a city that was once the region’s leader in the construction of new condos, apartments and homes.

Plans for a new neighborhood at the old Suffolk Downs racetrack are among the projects battling to move forward in a tough market.

Those numbers, in turn, are likely worse than they seem, for they mask a deep decline in new market-rate housing. If it were not for the revamp and expansion of public housing complexes and other subsidized units, the declines would be even steeper.

So, what’s keeping plans for new housing stuck on the drawing boards?

Certainly, the Fed’s two-year long campaign to hike interest rates and rein in inflation, which it is just starting to reverse, has played a big role.

Ditto for construction costs, which, already high in the Boston area, skyrocketed after the pandemic hit and the supply chain melted down.

But also squarely to blame, say developers and others involved in the construction and real estate, are the Wu administration’s tough new affordability requirements and the ban on fossil fuels in new buildings.

Developers are already struggling to get projects to pencil without these added costs.

“At least for new market-rate development, the combination of these broader economic factors and the city's affordability requirements is enough to make a meaningful percentage of projects non-viable,” Chris Lehman, co-founder of real estate investment/development/management company Groma, told Contrarian Boston.

Yet despite strong pushback over the past two years, the Wu administration finally went ahead last month and raised the amount of money-losing, subsidized units developers are required to include in each new apartment and condo project to 17 percent.

Still, there’s hope that as the Fed cuts rates - including another half a point on Thursday - that lenders who have pulled back from new apartment and condo buildings will start to get back into the game.

Supreme cluelessness: Dem pollster says Harris lost because she wasn’t out there bragging about Biden’s infrastructure, climate bills

If this is a taste of the kind of post-mortem analysis Dems plan on conducting, the party is in far deeper doo-doo than anyone realizes.