What Does “Affordable” Mean in Boston?

How the City of Boston Defines Affordable Housing

Boston, like most major cities experiencing rapid growth, is facing an affordable housing crisis — the majority of residents cannot afford the city’s housing stock, and low-and-middle income residents are finding it difficult to stay in their homes. In 2014, the Walsh administration, responding to development pressure and seizing the opportunity to grow, created a plan to build 53,000 new units of housing by 2030 — a plan that promises to result in more affordable housing opportunities for Bostonians as it is implemented. Thousands of new units have already been completed or permitted in accordance, and as residents see their neighborhoods transform, they’ve been assured that the building taking place is for their benefit: Mayor Walsh has said on multiple occasions that so far “rents have decreased in existing stock by 4% citywide” and “40% of all new housing stock is affordable to low and middle income people”. Hearing these claims, many Bostonians have wanted more information — they’ve asked what “affordable” actually means and why they aren’t personally experiencing decreasing rents if costs are reported to be going down.

Boston’s data on affordable housing is often confusing and sometimes misleading; reports on housing contain inconsistencies in data and how affordability is defined. The City has a new website focused on affordable housing which still does not state a simple definition of “affordable”. In recent months, my colleagues and I (who work in affordable housing, independently of the City) were able to get some clarification, or at least insight, into these matters regarding affordability from helpful staff at City offices. This post is intended to help provide understanding in response to the commonly asked questions regarding: 1) how affordability is defined, 2) what Boston’s affordable housing stock looks like, and 3) how rents can possibly be decreasing in a time when most are feeling (at the very least) financially pinched. The focus is on rental housing since it’s what residents ask about most often.

One of many posts regarding progress in affordable housing from Marty Walsh for Boston Facebook page

1.What is Boston’s definition of “affordable”?
The standard HUD definition of affordability, used by many cities across the country to define affordable housing, is “housing for which the occupant(s) is/are paying no more than 30% of his or her income for gross housing costs, including utilities”. By the same definition, any household spending more than 30% of income on rent is considered “cost-burdened” or “rent-burdened”.

The City of Boston lacks a clear definition of affordable housing and of housing cost burden. It too defines affordability using HUD’s 30% standard measure on some of its official websites, but all major housing and planning reports under the Walsh administration commonly use another definition: housing for which the occupant(s) pay 35% or less of income on rent is affordable, with households spending more than 35% of income cost-burdened. Then, in its central housing document, the Boston 2030 housing plan (page 26), the City actually defines affordable for non-elderly households as spending up to either 35% or even 50% of their income on rent (see table below):
— For family households with children, the City uses 35% of income as a measurement of housing cost burden. Any household spending up to 35% income on rent is considered affordable.
— For non-family households, the City uses 50% of income as a measurement of housing cost burden. This means that any household spending up to 50% of income is considered affordable.

The puzzling and far-reaching 50% of income affordability measurement doesn’t appear repeatedly in planning documents like the 35% measurement does, but it is incorporated into the principal Housing 2030 plan. It is clear that the City uses 35% as a measurement and may sometimes count units as affordable using up to 50% of a household’s income if the household does not have kids. Both the 35% and 50% measurements are different from widely-used HUD definitions. Standard definitions of housing cost burden refer to those paying more than 50% of income on housing costs (including utilities) as “severely cost-burdened,” and those paying more than 30% on housing costs as “cost-burdened.” Here, what is considered to be cost-burdening and a severely cost-burdening by HUD standards is instead considered affordable. Using 35% or 50% instead of 30% means that renters spend much more of their income on rent while having their housing deemed “affordable” to them. It also means that the City’s estimate of households who are housing cost-burdened and severely cost-burdened is smaller than standard estimates, making the reality of Boston’s cost burden seem less severe than it actually is.

Table from “Housing A Changing City: Boston 2030” using 35% and 50% of income as affordability measurements

Many housing advocates take issue with how the City categorizes low-income and middle-income earners. The typical household in Boston makes $55,000 a year or less, but the middle/working bracket is defined as $50–125k. The low-income and middle-income terms treat much of Boston (those who are considered “low-income”) as “other” and as if they are not part of the workforce. It also means, because the City is calling those making $50–125 the middle, typical, working household, housing production for this group should be made priority, while low-income housing is lower priority.

Below is an example of a rental unit that would be considered affordable based on the City’s definition. The unit is not deed-or income-restricted but is affordable because a “middle-income” individual could live there spending 34% of income on rent (see next section for more on deed restrictions).

According to the City’s measurements of affordability, the above unit at Ink Block would be considered affordable to a middle-income renter.

2. What is counted when Mayor Walsh says that “40% of all new housing is affordable to low-and-middle- income”? Are these all income-restricted units? Is there a list of all units being labeled “affordable”?

In the past, most people thought of “affordable housing” as homes or units set aside, through subsidies or other restrictions, for very-low-to-moderate-income people who needed assistance in affording a place to live. This is no longer the case: the term “affordable” has been watered down so much that, in high-priced cities like Boston, it essentially refers to any housing that is not high-end luxury built for the very wealthy.

When Bostonians hear that “40% of new housing is affordable” or that 9,000 new affordable units have been created under Mayor Walsh, it does not necessarily mean 9,000 units have been specially created and is restricted to people who are lower income. A chart below from the City’s Department of Neighborhood Development breaks down units built and permitted since 2011 (2011 is used because the last Census was done in 2010, and many housing planning numbers are based off of that). Here, the City counts 8,900 completed or permitted units as affordable (called “accessible” in this chart), but less than half of those units (4,062 total) are deed-restricted, or specifically set aside for people of certain incomes. The 4,838 units that are not restricted are market rate, or “normal”, units that the City may consider affordable to households making $100k-125k incomes because people may be able to afford them using 35% or less of their income on rent. (FYI: “AMI” as seen in the chart refers to area median income; it’s just another way of breaking down low income and middle income but in general, as mentioned above, low income = up to $50k and middle income= $50k-125k).

There is currently no single complete public list of all units considered affordable by location/address, though my colleagues and I have requested one. The City’s quarterly housing reports include much of the data in the chart below, though not as clearly or simply. The reports should include charts like this in the future, and there should be a public list of units being called affordable.

A City of Boston Chart shows permitted and completed units labeled “affordable” since 2011. Over half (4,838) of the units are market rate. These numbers are included in the 2030 housing report and its quarterly reports with more context.

3. How does the City of Boston collect rental data? Where does the City’s reported “rent decrease in older housing stock from 2015-2016” claim come from if so many Bostonians are actually seeing their rent increase?

The rental data used to determine trends in the market by the City represents a tiny slice of the real picture, and doesn’t fully/accurately portray what’s happening to tenants around the city. The City collects data from Rental Beast & MLS listings, which only contain new market listings. These are listings advertised by landlords online; they only include rents/units that are promoted by landlords on these two websites. Most of the city’s housing stock (and, consequently, its tenants and their circumstances) are not represented in these listings. Specific examples of common situations not reflected in these listings are:

Situation 1. Landlord raises rent. Tenants living in unit receive notice that rent is increasing. Tenants stay and pay increase because it is easier than moving/they aren’t sure what else to do. Because tenants are staying and landlord does not need to advertise, unit/rent amount is not listed on any website (and therefore, this rent increase is not accounted for).

­‐Situation 2. Landlord raises rent. Tenants, who lived in unit for 5 years, receive notice that rent is increasing drastically. Tenants decide to move out because rent increase won’t be possible to afford. Landlord lists apartment with new higher rent. But unit was not listed in previous 5 years because tenants occupied the apartment; no new tenants were needed/ there was no need to advertise apartment. Rent increase is not accounted for; only new rent is shown in listing.

­‐Situation 3. Landlord raises rent. Tenants move out. Landlord only lists unit on Craigslist/other site not used in data collection. Rent increase is not accounted for.

­‐Situation 4. Month-to-month tenants who have lived in building for years while paying same price but have been unable to negotiate a lease see developer buy building to renovate; landlord forces tenants to leave. Entire situation is not accounted for/reflected in listings.

As many residents have noticed, the City has said that rents in older stock (any unit built before 2011) have decreased by 4% across Boston, with rents going down 9% in Roxbury, 4% in Fenway and 5% in JP. This may reflect market correction in a sample of new listings having slightly lower rents than in the previous year, but does not take into account the many common situations listed above. The addition of many new high — priced units to housing stock may result in high — priced rents getting slightly lower, but if tenants are not protected through regulation or subsidies, this often results in lower or moderate rents being raised as area value increases. This affects people of color disproportionately, but effects of the building boom on different races is not currently tracked or reported by the City. City Hall itself receives thousands of calls per year from people at risk of being displaced and in desperate need of help; housing activists around the city together receive the same high volume of people needing help. It is obvious that rent is not decreasing for the majority of low-and middle-income Bostonians.

Using MLS and Rental Beast data is common of different cities, as tracking the trends of market housing and listings is easier and more straightforward than tracking and measuring the various situations not reflected in this methodology. At the same time, because many renters’ homes are not included, it is misleading to simply report that “rents are decreasing” in the Boston. While the City’s housing offices work hard to counter displacement and are initiating programs to help track and prevent it in Boston, we cannot downplay the burden on many of our residents who are struggling to stay in their homes, or who have already been forced out.

The full Housing A Changing City: Boston 2030 plan is here. This post was published by an independent affordable housing professional unaffiliated with the City of Boston.

Community Planner in Boston, MA @hollley