Image Credit: Alex Koppelman
Publication
Crowded In and Priced Out: Why It’s so Hard to Find a Family-Sized Unit in Greater Boston

Tim Reardon, Director of Data Services
Sarah Philbrick, Socioeconomic Analyst II
Jessie Partridge Guerrero, Research Manager

March 30 update: In response to requests from municipalities around the region, MAPC conducted a metro regional regional analysis of family-sized units and prepared a supplemental report available for download here.


Executive Summary

Finding a home to rent or buy in Greater Boston is stressful. Prices are high, available units are scarce, and competition is stiff. For families with children looking for units with three bedrooms or more, the process can be especially challenging.

Why is this the case? Partly because many newer buildings offer mostly studios and one- and two-bedroom units. However, other factors may be at play, as well. Who else is competing for the large units that are on the market? Are the limited number of large units being produced actually occupied by families? And how many empty nesters are staying in their family homes long after they no longer need all those bedrooms? A better understanding of these dynamics is fundamental to helping the region to make the best use of the existing housing stock and build the homes we need to meet future demand.

To help address these challenges, MAPC set out to learn who is living in the “family-sized” units in thirteen cities and towns in the region’s Inner Core. We looked at the number of people living in large units (defined as those with three or more bedrooms) and the age of the head of household. We broke that information out by whether the unit is rented or owned, what kind of building it is in, and how these characteristics have changed over time. We also examined overcrowding in smaller units to better understand the full demand for larger places to live.

The evidence is clear that there are not enough affordable options for families with children: as detailed in the report, 46% of those households pay an excessive amount of their income for housing, and 9% are considered overcrowded. Troublingly, we also found that most family-sized units are not, in fact, housing families with children. Such families occupy just 39% of all the large units in the study area. Meanwhile, an equal share of large units is occupied by only one or two people. Large owner-occupied units—whether single family homes or condos—are more likely than rental units to be lived in by just one or two people, mostly older households without children present. All told, fully one quarter of all large units—more than 50,000 homes—are occupied by an over-55 household of only one or two people.

Large rental units are somewhat more likely than large homeownership units to house families with children. However, those families face stiff competition from roommate households, who occupy more than a third of large rental units. With the combined incomes of multiple adults, roommate households can pay, on average, $450 more in monthly rent than the average family in a large unit. This makes it easy for roommates to outbid families for the available homes. We also find that most roommates have few other options: fewer than one in ten roommates could afford the median priced one-bedroom unit in the area. It also seems that the problem is getting worse; the lack of affordable smaller options has pushed more younger householders into roommate households since 2000, increasing competition for the limited supply of large units.

Our analysis shows that building new family-sized units is certainly part of the solution to this crisis, since newer units are actually more likely than older units to house families: 52% of large units built since 2000 are occupied by a family with a child (compared to 38% of large units built prior to that year). However, building those large units is expensive, and most large units in the future will be the ones that already exist today. Making those existing units available for families also has to be part of the solution. Based on past demographic trends, we estimate that current householders aged over 70 may return 22,000 large units to the market before 2030, but those units will meet only about a third of projected demand.

These results shed light on a topic of great concern to many people around the region, and demonstrate there is no one cause, and no one solution, to the lack of family housing in Greater Boston. The challenges facing families are symptomatic of the region’s broader housing crisis resulting from the underproduction of housing of all types, at many price points, across all communities. The needs of families cannot be addressed in isolation, but require comprehensive action to produce more housing to meet the needs of all the region’s residents today, and tomorrow. 


Introduction

Finding a home to rent or buy in Greater Boston is stressful. Prices are high, available units are scarce, and competition stiff. For families with children looking for units with three bedrooms or more, the process can be especially challenging.

Many people are concerned (and this report confirms) that families with children are more likely to be overcrowded and paying an excessive amount of their income on housing, indicating a lack of suitable units. Some fear that the production of too many studios and one- and two-bedroom units is changing the character of neighborhoods. One recent study (1) suggested that the lack of housing for larger families has contributed to a decline in Boston’s school-age population. Housing developers, on the other hand, point to the strong market for smaller units and the higher construction costs for larger units as rationale for delivering mostly studios and one- and two-bedroom units.

In order to help us understand the underlying dynamics of the demand for these units, we sought to answer the question “who’s living in Greater Boston’s three-plus-bedroom units?” Families with children? Empty nesters? Sets of roommates trying to maximize their rental budgets? We also examined how the supply and occupancy of larger units has changed over a 15-year period, and we have forecasted how many large units may be made available by turnover in the coming years. A better understanding of these dynamics is fundamental to helping the region make the best use of existing housing stock and build the units needed to meet future demand.

Our study area encompasses thirteen municipalities at the core of the region: Boston, Brookline, Cambridge, Chelsea, Everett, Malden, Medford, Milton, Newton, Quincy, Revere, Somerville, and Winthrop. With the exception of Milton, all are members of the Metropolitan Mayors Coalition (MMC), a group of cities and towns whose leaders gather to exchange information and create solutions for common problems. Recently, mayors and municipal managers of the MMC formed a Regional Housing Task Force to address Greater Boston’s housing challenges in a coordinated manner. In October 2018, the Task Force announced a set of housing principles, a housing production goal for the region, and detailed strategies to preserve and produce more housing. MMC member municipalities are now working to implement those strategies with the assistance of MAPC’s policy, organizing, and research staff. This report is intended to help MMC leaders and stakeholders better understand the region’s housing utilization and plan for housing to meet the needs of residents today and in the future.

We refer to the geography covered here as the “MMC Study Area” (or simply “study area”), with the caveat that MMC members Arlington, Braintree, and Melrose could not be included due to the boundaries of the Census statistical areas used for the analysis.

Our principal source of data is the 2012-2016 American Community Survey (ACS) Public Use Microdata Sample (PUMS) for Greater Boston. This data source, which allows for custom tabulation of household and housing unit characteristics, is published for statistical areas called Public Use Microdata Areas (PUMAs), which must contain at least 100,000 people and usually cover multiple municipalities. The dataset agregates ACS surveys collected over a five year period. For some statistics, we referred to ACS tables published by the Census Bureau, which are drawn from the same set of surveys. 

We specifically looked at the number of people living in large units (defined as those with three or more bedrooms) and the age of householders, broken out by whether the unit is rented or owned, and how these characteristics have changed across time. We also looked at how many households and families in the study area are overcrowded, with more than two people per bedroom, to better understand the latent need for larger units, or more affordable large units.

Due to the geography of the statistical areas used for the analysis, only Boston and Cambridge could be analyzed at the municipal level; however, MAPC found no statistically significant difference in the occupancy patterns of these municipalities as compared to the entire study area. Therefore, municipal-specific data are not presented here. Finally, it should be noted that the analysis focuses on occupied households where the residents responded to the American Community Survey. We do not currently have information available to quantify or characterize the number of vacant large units in the study area.

(1) Peter Ciurczak, Antoniya Marinova, Luc Sschuster; Kids Today: Boston’s Declining Child Population and Its Effect on School Enrollment; The Boston Foundation, January 2020 (https://www.bostonindicators.org/reports/report-website-pages/kids%20today)


Paying Too Much and Overcrowded

The region’s housing crisis is no secret. Rapidly growing demand and limited supply have driven housing prices in Metro Boston to among the highest in the country. Houses and apartments available to buy or rent are increasingly unaffordable, especially for households with children. The median advertised rent for a three-bedroom unit in the study area was $3,000 in 2018, according to MAPC’s analysis of online rental listings. A family would need to have an income of at least $120,000 to afford that median unit without spending more than 30% of their income on rent (the standard threshold for “housing cost burden.”) Meanwhile, the median price of home sale transactions in the area was $595,000 in 2018, well out of reach for many families. Few families earn enough to comfortably afford the units that are available. In the study area, 46% of all households with children are housing cost burdened and half of those—nearly a quarter of all households with children—are severely housing cost burdened (spending over 50% of income on housing costs).

Households with children are also much more likely to be overcrowded. Drawing from research conducted for the U.S Department of Housing and Urban Development (2), we define overcrowding as more than two people per bedroom (3) . Using that definition, 8.8% of households with children in the study area are overcrowded, compared to just 0.4% of households without children. This disparity is even more pronounced for families of color. Households with at least one child and a householder of color are more than twice as likely to be overcrowded as households with a child and a White non-Hispanic householder (4). 

In total, we estimate there were 11,800 overcrowded families with children in the study area from 2012 – 2016. Of these, over 7,000 were families of five or more people, who would need three or more bedrooms to avoid overcrowding; another 1,000 were families of four people currently in a one-bedroom unit. In light of the fact that so many families with children are cost burdened, and in many cases overcrowded, it is essential that we create new affordable units for them to inhabit, or that we make existing units both available and affordable. In order to tackle this objective seriously, we have to understand who is currently living in larger units, and what that might tell us about useful housing strategies. 

(2) Econometrica, Inc.; Measuring Overcrowding in Housing; U.S. Department of Housing and Urban Development, Office of Policy Development and Research; September 2007
(3) In this analysis studios are treated the same way as 1-bedrooms.
(4) "White households" defined as household headed by White, Non-Hispanic householder. "Households of color" defined as household headed by Non-White or Hispanic householder.


Who's Living In The Family Units, Anyway?

While families across the region face the stress of being cost-burdened and overcrowded, most large units in the study area (gray outline) are not being lived in by families with children. There were an estimated 221,000 large units in the study area in 2012 - 2016, comprising 38% of the total housing stock and housing 52% of the study area population. Of the 201,000 large units that are occupied, 53% are single family homes, 5% are condominiums in multifamily buildings, and 42% are rental apartments in multifamily buildings.

The map below shows the share of units in each census tract that are 3 or more bedrooms, as of 2014 – 2018. It shows that the relative availability of large units varies across the study area, with higher shares in more suburban communities such as Newton, Milton, Brookline, and Medford, as well as some Boston neighborhoods such as West Roxbury, Hyde Park, Dorchester). The share of large units is lowest in the densest parts of Boston and Cambridge.

Most large units in the Study Area are not occupied by families with children. There are over 127,000 households without a child (either multiple adults or a person living alone) living in large units, utilizing 61% of the occupied units. This pattern is particularly driven by owners, who are more likely to have extra bedrooms than are renters. Nearly one third of the households in large owner-occupied units (including condominiums) are composed of only two adults, and one in six large owner-occupied units is occupied by a person living alone. Only 36% of households in owner-occupied units are families with children.

Rental units in the study area are more likely than homeownership units to house families: 43% of renter households in large units are families with children. Not surprisingly, rental units are also more likely to house groups of three or more adults living together without a child under 18; over one-third of large rental units are occupied by these roommate households. Solo adults and pairs of adults are much less common in large rental units than in large owner-occupied units, comprising just 23% of the renter households in these units.

As one might expect, householders in large rental units tend to be much younger than those on large owner-occupied units. Only 8% of owner-occupant households in large units are headed by someone under the age of 35, versus 41% of households in large rental units. There is a corresponding difference in older householders. Whereas only 3% of households in large rental units are headed by someone 70 or older, 18 % of large homeownership units are headed by someone over 70, and another 33% are headed by someone age 55 – 69. This means that most householders in large owner-occupied units are over the age of 55. These patterns are important because older households tend to be much smaller than younger ones. All told, fully one quarter of all large units are occupied by an over-55 household of one or two people.

We also examined differences in single family homes versus multifamily buildings, regardless of tenure (own vs. rent). Notably, the share of units occupied by families with children was the same in both types of housing, at 39%. Multifamily buildings, like rentals, tend to have a larger share of three or more adults living together, while 44% of large-unit single family homes are occupied by only one or two people. 

Between 2000 and 2012-2016 the region gained an estimated 25,000 large units , increasing the total number of large units in the Inner Core PUMAs to 221,000. Notably, these newer units are more likely than older units to be occupied by a family with a child: 52% of newer large units (those built 2000 or after) are occupied by a household with a child compared to just 38% of housing units built before 2000. Conversely, only 15% of newer large units are occupied by roommate households (defined as 3 or more adults living together, no children) compared to 24% of older units. Overall, large units in newer buildings are more likely to house families with children, but less likely to house roommate households.

(5) This estimate is based on the available PUMS data; we were unable to corroborate this statistic with building permit or assessor data, which do not include reliable information about bedroom counts.
(6) Unoccupied “Newer” and “Older” housing units are not included in analysis


What About All Those Roommates?

Anecdotal evidence suggests that groups of adults living together may be outbidding families with children for larger units. The data we examined indicates this may be true. First we examined the age structure of roommate households, defined as three or more adults living together with no children under the age of 18. Nearly half (48%) of people in large-unit roommate households are 20-29. About 37% of these 20-29 year-olds are students, comprising 18% of all roommate household members. Also notable is the fact that many twenty-somethings live in multigenerational households: nearly 30,000 adults 20-29 (32% of all adults 20-29 in large units) live with a householder 45 or older, suggesting young adults may be living with their parents well into adulthood.

We compared three key differences between a roommate households and families with children (all comparisons are for households living in large units only). The median adult in a roommate arrangement is 12 years younger and earns 20% less than the median adult in a household with children. However, when the incomes of all roommates are combined, the median household income is $18,000 higher than that of households with children. That income difference means that, compared to the median family with a child, roommate households can spend an additional $450 per month on rent without being cost burdened. As a result, they can easily outbid families for the available units, or else families must take on additional housing cost burden in order to compete with roommate households. 

roomate-house-largeunit

Meanwhile, for many residents in roommate households, living with at least two other adults is the only way to afford living in the region. According to Zillow, the median monthly rent for a one-bedroom apartment in the Boston Metropolitan Statistical Area was $1,982 in 2016. An individual or household would have to have an income of $79,280 to afford that median unit without being housing cost burdened. Of all individuals in roommate households, only 9% earned enough to afford the median one-bedroom apartment without being cost burdened, and only 0.2% of roommate households were composed of individuals who all earned enough individually to afford living alone. These findings suggest that the lack of affordable one-bedroom options is forcing individuals to form roommate households and compete with families for a limited supply of large units.

 
Is the Situation Getting Worse?

MAPC also analyzed Census data from 2000 to see how trends in living arrangements by age have changed over time. The demographics of today are different than the demographics of 2000, so we would expect some natural change in large unit demand as Baby Boomers become empty nesters and Millennials start their own families. In order to compare behaviors accurately across these two time points, MAPC examined the likelihood that a householder of a particular age lived in a large unit in 2000 (versus in a studio or a one-, or two-bedroom unit.) We then applied these age-specific large-unit occupancy rates to householders in 2012-2016. This allowed us to distinguish demographically driven changes in demand from shifts in living arrangements for a given age bracket. 

We find that behaviors have shifted since 2000. In the chart below, there are age categories where the solid blue bar is higher than the grey outlined bar, indicating householders of that age are more likely to live in a large unit today than in 2000. Categories where the grey outlined bar is higher than the solid blue bar show age categories in which householders are less likely to live in large units today than in 2000. For nearly every age group under 60, more households live in large units than would have been predicted based on the year 2000 occupancy rates. We see some of the biggest differences in households headed by 20-29 year-olds. In those age groups, there were an additional 5,400 households in large units compared to what we would have expected. There is another large difference in householders 45-59: a 4,100 unit increase in the number of large units being used today. In contrast, householders 65-79 are somewhat less likely to be occupying large units, indicating that senior householders may be downsizing more rapidly than in the past. 

On net, there was increased occupancy of 7,600 large units over expected trends, driven by householders who, 20 years ago, would have been living alone or with a partner in a smaller unit. When compared to the estimated production of approximately 25,000 large units over this same time period, it indicates that approximately 30% of the net increase in large units was utilized by residents who 15 years ago would have been living in one- or two- bedroom units. Combined with the findings above regarding the potential for roommates to afford smaller units, it suggests that the lack of affordable smaller units is creating more competition for the limited supply of larger units. 

 
What's Next?

In addition to the current mismatch between available large units and the needs of the region’s families, the demand for such units will also grow in the future with population increases. Based on our regional population projections, MAPC estimates that the study area would need an additional 57,000 large units between 2010 and 2030 if household occupancy patterns remain constant, in addition to the 7,000 units needed to accommodate today’s overcrowded large families. Some of this demand will be satisfied by units that already exist.

As noted above, fully one quarter of the area’s large units are occupied by over-55 households of only one or two people. As these older residents age, some of them may choose to downsize to a smaller unit or assisted living, others may move out of the region, and some will pass away. Looking just at householders who were over 70 or older in 2015, we estimate that these residents may return 22,000 large units to the market from 2015 to 2030, meeting approximately 38% of demand over that time period.

However, as we have seen over the past 20 years, increased demand for large units may also be driven by younger households who otherwise would prefer studio or one-bedroom units but can’t find anything on the market in their price range. Conversely, more rapid downsizing of older adults (between the ages of 55 and 70) may also return more large units to the market and reduce the need for new construction. Therefore, the actual demand for new large units will also be a function of how many smaller units are available (and affordable) to meet the needs of both younger and older households who might otherwise be in a large unit. 

 
Conclusions and Policy Questions

Our analysis confirms the dire situation for Greater Boston’s families with children. They are disproportionately cost-burdened and overcrowded in their housing. Their problems don’t result from an absolute lack of units, but rather from who is occupying the family-sized units that do exist. Nearly two-fifths of large units are occupied by only one or two people, and the underutilization is particularly stark for large homeownership units. In particular, older homeowners past their family-raising years occupy an outsized share of family-sized units. Fully one quarter of all large units—more than 50,000 homes—are occupied by an over-55 household of only one or two people.

In the rental market, families face stiff competition from roommate households, who occupy more than a third of large rental units. On their own, very few roommates could find a one-bedroom unit they can afford, but with the combined incomes of multiple adults, a roommate household can easily outbid the average family. There is also evidence that this competition has gotten worse in the past two decades, as a lack of smaller affordable options pushes more young adults into roommate households.

Our analysis shows that building new family-sized units is certainly part of the solution to this crisis, since newer units are actually more likely than older units to house families: 52% of large units built since 2000 are occupied by a family with a child. However, building those large units is expensive, and most large units in the future will be the ones that already exist today. Making those existing units available for families also has to be part of the solution. Turnover of existing units currently occupied by older seniors could meet a substantial share of projected demand, but there are many other factors at play. Production of smaller, senior-friendly units that enable older residents to downsize more quickly will increase the number of existing family-sized units available in the near future. Similarly, the production of one-bedroom apartments attractive to, and affordable for, younger residents could reduce the number and spending power of roommate households competing with families for large units.

We hope this research, by providing an objective analysis of large unit occupancy patterns, will help advance conversation about the region’s housing needs and what to do about its immediate housing crisis. Of course, our findings raise many other questions related to unmet housing demand, housing production, policy solutions, and the future of today’s housing stock. These include:

  • If, as the evidence suggests, only half of newly-constructed large units are occupied by households with children, what interventions can be employed to promote or enable occupancy of new large units by families in need? What can be done to make larger units affordable to families who need them, or to help them outcompete roommates for those units?
  • How do we create more affordable senior-friendly options attractive to downsizing homeowners, enabling them to free up larger units for families? How do older adults see their housing needs and preferences, and what options and incentives could entice owners to transition to smaller units?
  • How much could the construction of more affordable one-bedroom apartments, studios, or microunits alleviate some of the stress on the large unit market? Do these units attract residents who would otherwise be in roommate households competing with families for large units?
  • What policies or programs could specifically assist large families who are currently overcrowded? What are the characteristics of these large overcrowded households, and what types of units do they need?
  • What is the impact of short-term rental (STRs) on the availability of large units? How many large-units have been removed from the for-sale or for-rent market and converted to STR? Does the option for STR incentivize both owners and renters to occupy a unit larger than they would otherwise need, so that they have extra bedrooms to lease out on a short-term basis?
  • How many large units are currently vacant and unavailable to families who need them? What policies could be put in place to get more of those units back onto the market?
  • What would be the impact of more widespread creation of Accessary Dwelling Units (ADUs)? These units could produce an income stream that allows seniors to age-in-place while also creating additional small housing units. However, subdivision of larger homes might actually reduce the number of larger units, or reduce the turnover of those units by allowing older households to stay in their large units longer than they could otherwise afford.

Despite the many questions that remain, our analysis sheds new light on a topic of great concern to many people around the region, especially the leaders of the Metro Mayors Coalition Housing Task Force. We make clear there is no one cause, and no one solution, to the problem of family housing in Greater Boston. The challenges facing families are symptomatic of the region’s broader housing crisis. It results from the underproduction of housing of all types, at many price points, across all communities. The needs of families cannot be addressed in isolation, but require comprehensive action to produce more housing to meet the needs of residents today, and tomorrow.