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Greater Boston’s economic renaissance, begun nearly two decades ago, has endowed the region with an extraordinary labor market where unemployment remains below 3 percent and family incomes are rising faster than in almost any other metropolitan area in the nation. The market has been so strong that it has attracted professional workers to the region from other parts of the country and a new wave of immigrants from abroad.
But prosperity brings its own challenges. None is more acute than the region’s severe housing crisis. Vacancy rates are now so low that home prices and rents are being bid up substantially faster than most household incomes. Between 1995 and 1999, the median price of a Greater Boston home shot up by a nominal 35 percent while incomes rose by a healthy, but more modest, 25 percent. As a result, many long-time residents of the region, in addition to many newcomers, are facing a severe affordability gap between their incomes and what they must pay to rent housing or purchase a home. Prices and rents are rising so quickly that not only are the poor in trouble, but an increasing number of working and lower middle income families worry that prosperity may price them out of the Boston housing market. Indeed, if housing prices continue to rise, the housing crisis could pose a barrier to the future growth of the region as employers find it difficult to recruit workers and are forced to locate elsewhere.
A New Paradigm in Housing in Greater Boston focuses on the looming housing crisis and possible policies that can be enacted to mitigate this problem.