Boston Housing Crisis Caused by Too Much Government, Harvard Expert Claims

Threatens Economic Growth of Region

By Geraldine Hawkins
March 14, 2003

It's difficult to find a decent place to live in the Boston area because "over-regulation" has driven developers out of the state, according to Charles Euchner of the John F. Kennedy School of Government at Harvard University.

"At times, the system seems to conspire against the construction and rehabilitation of housing," Prof. Euchner says.

"Some developers have just left the state," Euchner tells MassNews. "Small ones believe they are locked out of the system, because all the regulations pose a barrier to entry. They need so much up-front money just for permitting and engineering, that it is impossible if they don't have those kinds of resources in the bank."

Euchner has written the results of his research in a study, which shows that the serious housing crisis threatens the continued economic growth of the region.

"Evidence of a housing crisis in the Boston area includes high apartment rents, high home prices, and an insufficient supply of housing units. The lack of a varied housing stock prices many workers out of the market - and drives both households and businesses out of the region, including entrepreneurs and their colleagues who are engaged in the start-up phase of business," he has found.

"It's clear," he says, "that the current regulatory scheme raises the cost of construction, which in turn restricts the production of housing. States and localities need to recognize that they often pose unreasonable barriers to housing development. If they want families to be housed at reasonable cost, they need to reduce the time, expense and frustration posed by the myriad regulations governing housing development and rehabilitation."

The study was titled: "Getting Home: Overcoming Barriers to Housing in Greater Boston." It was commissioned by the Pioneer Institute for Public Policy Research.

Beacon Hill Rules Are a Nightmare

Regulatory impediments from Beacon Hill include the state's wetland protection laws, building codes, the state rehabilitation code, septic regulations, handicap access codes and local zoning codes. Often these codes conflict with each other.

One particularly unnecessary stumbling block for those hoping to renovate old buildings has been the confusing re-write of the rehabilitation code. "The Massachusetts rehabilitation code, once considered a model for rehab of existing buildings, has become a barrier instead. Reforms in the latter 1970s provided developers with incentives and tools to complete renovations to existing buildings," Euchner writes. "Since its adoption in 1979, Massachusetts has made a number of alterations to this cutting-edge rehab code. The result has been a reversal of the intent of the reform - and a more difficult rehabilitation process."

Euchner tells MassNews that "inadequate language" is responsible for this confusion. "They just didn't rewrite the rules very well," he says. It is typical of bureaucratic busyness-for-its-own-sake that a reason was found to rewrite the code when it was working very well as it originally stood.

In most states, only one agency is designated to regulate all aspects of building construction. In Massachusetts, developers have to contend with several boards and commissions, each with their own agenda.

"Inspectors employed by cities and towns enforce the state standards," Euchner writes. "Because of limited manpower at the local level, a lack of common training for inspectors and the vagaries of local political culture, local implementation is uneven. Developers, realtors and other housing professionals say that local officials can increase the time and expense associated with building and selling homes. Idiosyncratic interpretation of state standards introduces a level of risk that gets translated into added costs to developers and ultimately to the buyer."

Through the Architectural Access Board, Massachusetts establishes guidelines for handicap access, with which developers must cooperate. This is very expensive, especially when renovating old buildings. "Some provisions of the handicap access code actually conflict with the state building code, creating a headache for architects and building inspectors," Euchner says.

There are too many barriers at every level of the system, according to Euchner. Nearly as baneful as the laws themselves is the way they are implemented, which is often arbitrary, he says. "Attempting to comply with all of these regulations takes months and years, and sometimes hundreds of thousands of dollars."

Anti-Snob Zoning Is Major Problem

Another major problem is the law known as Chapter 40B, or "anti-snob zoning," which goes back to 1969, Euchner tells MassNews. "This gives developers a trump card to use against local zoning regulations. It overrides local zoning in the name of affordable housing, but the trouble is that in some localities it has destroyed local sympathy any new housing developments.

"There is some anecdotal commentary to the effect that some unscrupulous developers have come in and built bad stuff. The quality of construction tends to be pretty decent, but the design doesn't do much for the community. People are getting more sophisticated about dealing with that, however.

"With 40B, some communities feel that they're being overwhelmed with new housing that they can't handle, that it is imposing undue hardship on the local communities in terms of police, etc. On the other hand, some say that the increase in population brings in new tax revenue as well as new service needs."

What can be done?

"Massachusetts - and in particular, Greater Boston - must clear away some of the regulatory underbrush in order to encourage the development of enough housing to accommodate the people who have made the area their home," Euchner writes.

Only two entities can accomplish this - state and local government.

Euchner recommends that local governments take three actions:

Allow developers to build housing that fits the historic character of the community on parcels of land acquired from the local government.

Tax vacant property at the same rate that would be in place if the property were developed, because this would keep landowners from holding on to undeveloped real estate for speculative purposes.

Establish clear and practical zoning codes. By principle and law, a zoning code should establish a clear and workable 'envelope' for development of all kinds. What fits in that envelope should be understandable so that developers can make a fair profit on projects that fall within the envelope."

There are twice as many actions that Euchner suggests that state government should take.

Appoint a commission to examine all 351 local zoning codes in Massachusetts and discern which of these are outdated and therefore unnecessary.

Identify buildable land and make it available to developers who are willing to create housing for people at all income levels.

Offer "carrots" to communities in order to help them to see the advantages of new housing in their midst, such as offering to increase state aid when communities work with neighboring communities on housing development. Euchner cites the "Good Neighbor Bonus" proposed by the Catholic Archdiocese in its report for the year 2000.

The state should take several of the existing codes, such as the handicap access, electrical and health codes, consolidate them and let them be overseen by a single agency. The codes should be stated in simple language and made available over the internet.

Help to preserve beautiful older buildings by restoring the rehabilitation code to simple health and safety requirements.

Conduct local inspections according to uniform state codes which are not open to inconsistent local interpretations.

Euchner has great hope that with a simplified and more reasonable approach, the "housing crisis" in Boston can be mitigated.

"Developers report that they are willing to follow the rules of the community," he says, "as long as those rules are clear, understandable, reasonable - and applied fairly to all."

Many environmentalists will disagree with taxing open land at a high price because it will also discourage those sincere people who are trying to stop the state's suburban sprawl that the federal EPA says is the greatest environmental problem in the state.

Charles C. Euchner is Executive Director of the "Rappaport Institute for Greater Boston" at Harvard University's John F. Kennedy School of Government. The Rappaport Institute works with universities, public agencies, and other organizations in the region to improve the governance of Greater Boston. Euchner has also served as associate director of the Center for Urban and Regional Policy at Northeastern University and as Project Manager for Project 400, a long-term planning initiative for the city of Boston. He has taught at the College of the Holy Cross, the University of Pennsylvania and at St. Mary's College of Maryland. He received a B.A. from Vanderbilt University and a M.A. and Ph.D. from Johns Hopkins University.

A copy of "Getting Home: Overcoming Barriers to Housing in Greater Boston" by Charles Euchner and Harvard undergraduate Elizabeth Frieze, is available from Pioneer Institute, 85 Devonshire Street, Boston, MA 02109 (617) 723-2277, www.pioneerinstitute.org.