222,000 new homes must be built over the next decade to fix housing shortage, state says

By Andrew Brinker, Globe staff, The Boston Globe

Hitting the target would mean picking up the pace of construction, which has slowed in recent years.

The Healey administration on Thursday laid out a new goal for housing construction that captured the staggering scale of the challenge facing Massachusetts: nearly a quarter-million new homes in just the next 10 years.

In a state infamous for construction delays and opposition to new housing of all kinds, the analysis from a committee appointed by Governor Maura Healey crystallizes the severity of the housing shortage in Massachusetts that is warping the lives of everyday people and could worsen if the state does not begin building faster.

It also adds a new sense of urgency to a problem that has persisted for years: Massachusetts is well behind the pace needed to meet its new goal, 220,000 new homes, by 2035. While the state built an average of 19,000 residences a year between 2010 and 2020, the pace has since slowed markedly: Only 11,600 permits for new homes were issued in 2023.

The new official housing goal is more ambitious than that set by former governor Charlie Baker, but getting there will not be easy. Interest rates and other financial headwinds like the cost of land and materials have made it more difficult than ever to finance construction of apartments, and municipalities are fighting efforts to make it easier to build within their borders.

“At the root of our challenge with costs is a shortage of homes,” Healey said at an event announcing the housing goals Thursday. “It’s a shortage that . . . has built up over many years as our state was not building the housing that we needed to keep pace with our economic growth.”

“Building these housing units [is] going to help us bring down costs, and keep our economy competitive.”

But falling short could be devastating, officials and advocates said Thursday. Already, the share of renters who pay more than 30percentof their income for housing is increasing. And homelessness in Massachusetts is surging as well.

The 222,000 figure was developed by Healey’s newly formed Housing Advisory Committee — which includes elected officials, developers, and affordable housing advocates — as part of a comprehensive state housing plan. It is based on population estimates that include projections of newly formed households by younger people who will seek homes for the first time, and people who move here over the next decade.

The committee, along with researchers at the UMass Donahue Institute, the Metropolitan Area Planning Council, and Dain Research, assumed modest population growth over the next decade when calculating the projection. But even if the state’s population remains flat, Massachusetts would still need to build some 73,000 homes over that period to account for existing demand and newly formed Gen Z and millennial households.

The report also identified where in the state housing is most needed: Eastern Massachusetts, including significant demand in the Merrimack Valley.

The production target expands on a more modest goal set by Baker, who in 2017 called on the state to build 135,000 homes over an eight year span.

Other groups, meanwhile, have previously estimated the demand for new homes in Massachusetts, specifically the eastern part of the state, to be even greater. The Metro Mayor’s Coalition, which includes heads of communities from the immediate Boston area, established a target in 2018 of 185,000 new units in their communities alone by 2030.

If the state were to hit the Healey administration’s target, it would ease pressure on the housing market, the advisory committee said in its report Thursday. But it would not solve the housing problem altogether. Thousands of apartments in public housing complexes are at risk due to disrepair, while many other residences are at growing risk of flooding due to climate change, the report found.

And the committee did not factor in units that are affordable for lower-income households into its production target. There is significant demand for those homes as well.

Housing advocates have been waiting for the Healey administration to issue a new production target. Those goals, they say, are an important measure of the housing shortage, and a benchmark to guide reform efforts that will speed construction statewide.

“Its honestly hard to see how we can attain [222,000 units by 2035] without major changes in both policy and the amount of funding we’re dedicating to housing,“ said Marc Draisen, executive director of MAPC. ”If we produce at the rate we did last year, we’ll fall very far short. It’s a big goal, and it’s going to require taking a hard look in the mirror, and probably making some big policy choices that are painful for some folks.”

While the report didn’t include any specific new proposals, it provided insight into strategies the state may pursue to increase production.

The MBTA Communities Act — which requires the 177 cities and towns served by the T loosen their zoning rules to make it easier to build multifamily housing — has enabled much-needed new construction in communities outside of Boston. But the commission argued that the state must more aggressively pursue zoning and other regulatory reforms beyond MBTA Communities.

Indeed, some communities are still rebelling against the law, and that kind of opposition will be a barrier to the housing growth the Healey administration wants to stimulate.

The state should also follow through on a push from the Healey administration to identify and redevelop underutilized state-owned properties, such as those owned by the MBTA, into housing, the report said. The state has identified roughly 100 sites that could be suitable for the development of some 10,000 units over the next five years.

And it should dedicate more resources to the preservation of existing affordable housing and streamline efforts to repair the deteriorating state public housing portfolio.

Another report from a separate commission Healey created last year to study strategies to enable increased housing production is expected soon, with more specific policy recommendations.

The efforts underway are only a starting point in creating and preserving 222,000 homes, said Keith Fairey, CEO of the affordable housing group Way Finders. “In that regard, I see the plan as a call to action for all of us.”