How Massachusetts’s Hiring Boom is Impacting Home Buyers
Massachusetts has been enjoying an impressive hiring boom since the unemployment rate dropped to 3.4% in 2018, the lowest it’s been in 15 years. The current unemployment rate is 2.9%, demonstrating that the state’s job market continues to thrive. Labor and Workforce Development Secretary Rosalin Acosta reported that “Over the last year, the labor force has increased by 18,000.”
While these statistics are great news for job seekers, the employment boom is actually making it harder for new and existing residents to find an available and affordable home to buy. Northeastern professor Alicia Sasser Modestino’s recent housing study directly connects the increase in jobs with the difficulties prospective homeowners are experiencing.
“We’ve had a lack of supply that’s been a chronic problem for decades, but when you combine that with a booming economy that’s drawing in more residents from other parts of the United States as well as abroad, then that just means that prices and rents skyrocket.”
The higher cost of land in business-heavy areas like Boston means that developers are more apt to invest in the construction and redevelopment of homes and multi-family rental units that will yield a large return. This approach has improved the inventory of higher priced homes, while leaving a gap in the middle market.
Governor Baker’s administration has been taking a proactive approach to help the MA housing market find balance. Back in May of 2018, Baker signed a housing bill dedicating $1.8 billion dollars to the state’s Workforce Initiative Program. Program funds go directly towards the “production and preservation of affordable housing for low- to moderate-income households, supportive housing and housing serving vulnerable populations.”
When the GE Headquarters were sold, the administration invested a large portion of the state’s profits into the program, contributing an additional $86 million – $60 million of which went directly towards the creation of workforce housing. The state plans to create “500 new workforce homes that will be affordable and accessible for moderate-income, first-time homebuyers. The remaining $26 million will support the creation of roughly 260 new workforce housing rental units.”
MassHousing, a semi-public agency dedicated to providing loans for affordable housing projects in MA, has also been working to bring solutions to the state’s housing shortage. Most recently, they’ve committed $7.9 million to The Neighborhood Developers (TND) and $35.8 milion to Trinity Financial. Both organizations are using the funds to build affordable housing complexes. Combined, the two projects will bring more than 160 attainable housing units to residents.
There is no denying residents are still feeling the housing crunch, especially in population dense areas like Boston. However, with the state and agency’s like MassHousing continuing to invest in housing solutions, prospective home buyers may just find the process will get easier over time.