Editorial : Unaffordable then, unaffordable now
We like to think we're doing what we should to correct the imbalance between folks who need houses and the stock of houses they can afford. But, in fact, we're not.
We're not alone. Massachusetts generally has faced the affordable housing gulf as we have, has applied the same approach as we have, and has experienced the same limited success.
In a special issue of Commonwealth Magazine, reporter Paul McMorrow explains the dilemma this way.
"The same forces that fueled the nation's housing bubble also drove up housing prices in Massachusetts. However, Massachusetts housing prices were affected by another factor unique to the Bay State: Tight restrictions on new housing construction. 'The cost of housing is higher here than it is in the rest of the country [and higher still on Martha's Vineyard, Ed.] because we don't produce an adequate supply of housing,' [says Michael Goodman, chairman of the Department of Public Policy at the University of Massachusetts Dartmouth]. 'You'd expect, in a normal market, where there's demand for housing, we'd build housing, and when there wasn't demand, we wouldn't. That's not the case here.'"
Here, we did not build — or permit to be built — sufficient housing to satisfy demand when it was strong, thus impairing affordability. We preferred large lots and fewer housing types to choose from. And, we preferred to build what affordable housing we have built using public tax money and privately donated funds, so we could control the outcomes. And, we extended that control far into the family futures of the beneficiaries. When the great housing bubble burst, the resulting dearth of housing priced for consumption by ordinary folk buoyed housing prices generally, so they remain beyond reach for most families.
"A tight supply of housing drove up housing prices in Massachusetts far beyond what the rest of the country experienced," Mr. McMorrow writes in his article entitled Out of Reach." Between 1997 and 2005, housing prices in Massachusetts grew by 95 percent. Nationally, housing prices grew by 42 percent during the same time period; they peaked in 2006, 49 percent higher than they were in 1997."
Apart from the implications for affordable housing availability, it's a reminder that Martha's Vineyard is not unique, but part of the statistical crowd in the larger world in many respects.
"Supply restrictions drove high housing prices higher in Massachusetts, and supply restrictions have cushioned the state's post-bubble fall," Mr. McMorrow continues. "Nationwide housing prices are now down 38 percent from their bubble-era peak, compared to a 26-percent drop in Massachusetts."
Because of tight building restrictions, statewide but especially here, the shortage of affordable shelter — abetted by dismal economic growth, a lousy job market, and lending constraints — persists through good and bad times.
For a small, economically and demographically challenged community like this one, this news is especially bad. Home ownership has historically led to the socio-economic improvement of family fortunes among the middle class. But, rules here mostly prohibit the accumulation of value from subsidized shelter for most beneficiaries of Vineyard affordable housing efforts. And, that defeats efforts to substantially expand the housing stock and increase the wealth and stability of families who need shelter they can afford, with all the benefits such housing affords.
On the other hand, going about the housing question as we do, our efforts protect real estate values, limit the increase in the housing stock, and support a two-tier community in which the unrestricted opportunity that has historically offered itself to modest income Islanders is now reserved for those who are already the haves. They will do very well over time. For those who weren't part of the earlier wave and haven't yet got their unrestricted share, the opportunity is now qualified.