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New index links housing needs to jobs

Anyone living within commuting distance of MIT--and these days that can be quite a distance--knows the litany: "Policemen and firemen often can't afford to live in the towns they serve," said David Geltner, director of MIT's Center for Real Estate (CRE). "Anyone who has kids trying to start out here knows how hard it is to afford a starter home. Bright students graduating from this region's universities are leaving rather than staying, because of the high cost of housing."

Geltner, opening the May 25 research conference sponsored by CRE's Housing Affordability Initiative (HAI), ticked off the familiar list to underscore why the center's researchers have developed a new way of tracking and evaluating the availability of affordable housing in the Greater Boston area.

The new technique not only measures housing prices relative to what people can afford, but also where people might want to live--by taking into consideration access to jobs throughout the Greater Boston area. The regional perspective is a first.

Data from the protoype index were presented by the CRE research team, led by Dr. Henry Pollakowski, director of HAI. Pollakowski limited his discussion to the availability of rental housing for households whose income is 50 percent to 80 percent of the Boston area's median income (AMI), which is $66,200 for a family of two.

To illustrate the prototype results, Pollakowski gave several examples. Burlington and Woburn are towns with comparable accessibility to Boston-area jobs, but Woburn gets a higher (more favorable) index score because a greater percentage of Woburn's available rental housing is affordable.

Consider another pair of towns--Arlington and Haverhill. The two have similar percentages of affordable rental units, but Haverhill's index score is more than twice Arlington's, because Arlington, with better proximity to jobs than Haverhill, needs to have a larger stock of affordable rental units to rank as well as less-accessible Haverhill.

In other words, the index tells us that the Boston area would benefit more from additional units of affordable housing in Arlington than in Haverhill.

The conference was a lively one, with unusually brisk exchanges between presenters and the audience. Two panel discussions illuminated both the audience's enthusiasm for this novel approach to a chronic problem, as well as the challenges the team needs to consider as it refines its work over the coming year. Thomas Gleason, executive director of MassHousing, noted that the index would be extremely valuable as a tool "to help planners take charge of their destiny" but added, "I would plead for simplicity…if we need an MIT Ph.D. econometrician to explain it, it's not going to be helpful."

That's a challenge that Geltner relishes. He had noted previously that the Center for Real Estate is committed to solving "real problems in the real world," and reminded the audience that the Housing Affordability Index already has an excellent track record. Last month, HAI announced the results of its study of affordable housing projects--so-called 40B developments--in six towns in suburban Boston. That study demonstrated conclusively that mixed-income, high-density rental developments do not lower nearby property values. Both the 40B report, as well as materials from the May 25 research conference, are available at

A version of this article appeared in MIT Tech Talk on June 8, 2005 (download PDF).

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