Roxbury real estate market pressures local tenants, buyers
Roxbury rents are soaring — and largely catching up with the Boston average. This leaves current residents particularly at risk of displacement in a neighborhood where many are renters and many earn below the Boston average income.
Between 2010 and 2015, Roxbury’s median housing costs increased the most out of any neighborhood, rising by 70 percent, according to the Imagine Boston 2030 draft report. In comparison, the median housing cost in the city as a whole rose by 36 percent.
Rent pressures rise
The current population in Roxbury is particularly affected by rent growth, given the high proportion of renters. While 66 percent of Boston households are renters, that rate rises to 80 percent in Roxbury, according to the Boston Planning and Development Agency. In the PLAN Dudley focus area, it is higher still: 95 percent.
Even between fiscal year 2015 and fiscal year 2016, the median rent on a three-bedroom apartment in Roxbury climbed by 20.9 percent, compared to a 6.1 percent weighted average rent rise on such units in all of Boston. The result: rental costs for three-bedroom units in Roxbury hit an average of $2,400, costing just $79 less per month than the overall Boston average, according to information presented by the BPDA.
This pricing pattern applies to other types of units: the average one-bedroom in Roxbury went for $1,998, compared to a $2,068 Boston average. Two-bedrooms rented at $2,195 in Roxbury, compared to a $2,226 city average, according to BPDA information.
One exception: Roxbury studios cost $220 less per month.
While Roxbury rents are catching up to greater Boston levels, incomes are not. In Boston as a whole, 12 percent of households earned annual incomes below $10,000, and 17 percent made $10,000 to $24,999, according to 2010 to 2014 American Community Survey estimates reported by the BPDA. In Roxbury, 23 percent of households earn less than $10,000 and 29 percent earn $10,000 to $24,999.
In the PLAN Dudley area, the share of households making less than $10,000 is greater — 31 percent — while 29 percent make $10,000 to $24,999.
Give such a housing market, the BPDA considers PLAN Dudley residents at low risk of displacement if they are a renter making more than $75,000 per year, a homeowner making more than $50,000 annually or a resident of affordable housing. The agency estimates that 13 percent of households in the zone are at elevated displacement risk.
About 1 percent of housing in the PLAN Dudley development pipeline will be designated affordable to families making under $26,000 — a group that represents more than 60 percent of households in the area.
Calls for affordable, mid-price homes
Some residents have protested plans for Tremont Crossing that designate only 13 percent of its new housing as affordable, and peg affordability at levels they say are unrealistically high for the neighborhood. While Area Median Income definitions are federally set, the BPDA can tailor affordability to each neighborhood by determining how many units are set aside for each AMI bracket.
Calls for more affordable housing are prevalent throughout Roxbury, where fears are high that anything else built will be high-priced market-rate, which will be out of reach for most, and will further drive up prices, said Rodney Singleton, Fort Hill homeowner.
But that’s not all. In Singleton’s view, in addition to a continued demand for affordable housing, the call for moderately-priced units largely goes unanswered.
“In Roxbury and all of Boston, moderate housing is starved,” he told the Banner. “The problem that we’ve experienced in our neighborhoods, in particular in Roxbury, is this that there’s no middle-of-the-road housing.”
While market rate units with hefty price tags generate giant revenues for developers and subsidies make affordable housing profitable, the middle range continues to present a funding challenge, and as such is rarely served, Singleton says.
Currently, it costs about $400,000 to build a unit of housing. Median prices on condos, single-family and three-family houses in Roxbury rose significantly between 2015 and 2016, increasing by 21.1 percent, 27.2 percent and 21 percent, respectively, according to the BPDA. This put a median condo price at $433,750, a single-family home at $395,000 and a three-family at $538,450, which remain below the city medians.
Meanwhile, Singleton says the kind of moderate housing prices Roxbury needs are in the ballpark of $265,000 to $360,000.
Singleton acknowledges that those figures are beyond what many Roxbury families will be able to afford, but says there is a segment that has built enough wealth that they could do so. These people struggle to find options to buy in their neighborhood. And, as he has long argued, purchasing a home allows for greater wealth generation and protects residents from displacement risks as property values rise.
Next up: outer neighborhoods
In the past five years, much of the city’s development has focused on the inner core. Between 2011 and 2016, Roxbury’s rate of growth was 3 percent, putting it below the city average of 6.6 percent, according to information from the DND.
But the city’s September information suggests developers’ geographic focuses are changing. According to the city’s analysis, developers seem to be looking to outer neighborhoods as offering prime opportunities for building. The DND did not have information on Roxbury, specifically.
What are we building next?
From 2011 to 2016, the percentage of all permits issued in Boston for new affordable units dropped to 18 percent, down from the 26 percent between 2004 and 2010, according to The Boston Foundation’s 2016 Greater Boston Housing Report Card.
The number of permits issued in Boston for multifamily residencies with five or more units declined by 40 percent between 2015 and 2016 as well, the TBF reports, which inhibits attempts to use greater density to satiate housing demand.
Going forward, high-density housing may rebound, though it may be in the form of condos. City officials noted that developers who pulled permits this year showed greater interest in building condos and lower interest in rental stock. Only 43 percent of permits pulled this year were for rental units, down from 83 percent in 2013.