No surprise: Boston most expensive city

Yawu Miller

There’s something about being number one that gets people’s attention, says Boston Foundation President and CEO Paul Grogan.

That’s the upside of a report that has ranked Boston as the most expensive city in the United States, according to Grogan.

“This is a real exclamation point for people that we’ve arrived at number one,” he said. “We hope it will galvanize people around the issues of housing and housing production.”

To many Boston residents, the report comes as little surprise. Housing costs have been on the rise since 1995, when the state-wide abolition of rent control took effect. Housing activists say the effects of increased housing prices has driven many out of Boston.

Grogan and others cite a net-loss of population from the city, stemmed only by an influx of immigrants. While many of the immigrants work low-paying jobs in the service economy, the state’s white-collar workforce is shrinking.

“We need people, whether they are born here or not, given that we’re a talent-driven economy,” Grogan said.

According to the report, a family of four must earn $64,656 a year just to afford basic necessities in Boston. The median income of black households in Boston is $30,447. For Latino households it’s just $27,141.

“Anyone who is here and low-income is either getting pushed out or being positioned to be pushed out,” said Roxan McKinnon, assistant coordinator of the Boston Tenant Coalition.

McKinnon and other affordable housing advocates say that low-income renters are increasingly paying larger percentages of their income to secure housing or doubling up in units with relatives.

Policy makers have focused on increasing housing production as the key to reducing rents and housing sale prices, under the theory that increased supply will lower prices.

In 2003 Mayor Thomas Menino set a goal of producing 10,000 new housing units in Boston over a four-year period. As of June, the city had permitted 5,820 units, including more than 1,138 low- and moderate-income units.

But the median price of a house in Greater Boston increased more than 37 percent between 2001 and 2004, according to the Boston Foundation/CHAPA report.

“Clearly we know that this city being the most expensive is a dubious distinction,” said Department of Neighborhood Development Director Charlotte Golar Richie. “We do feel that we have made great strides by increasing supply and getting financial resources out to people who need it the most.”

Richie noted that her agency also provides financial assistance to low-income home buyers, giving grants averaging between $2,500 and $3,000 for down payment assistance.

“It’s tough for anybody to afford a home,” she said. “The average wage earner is not able to afford the average house.”

In a separate initiative, Menino has encouraged local universities to build more on-campus housing, bringing several thousand students out of the rental housing market in the last five years.

The increased housing production may have had a slight impact on the city’s housing market. The rental vacancy rate has slipped from one percent to six percent in the last six years. But housing sales prices have continued to rise.

Prospective home buyers who are low-income by Boston standards must either purchase subsidized units or buy outside of Boston.

Lucia Santana, who coordinates a first-time home buyer class with City Life/Vida Urbana, says there is no shortage of people looking to buy homes. But her clients are increasingly turning to non-traditional arrangements.

“They mostly are getting mortgages with two or three other people,” she said. “Their incomes are too low to buy by themselves.”