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A housing market out of reach for residents

Neighborhoods on the verge of changes as median sales prices move beyond reach for most Bostonians

Yawu Miller
Yawu Miller is the former senior editor of the Bay State Banner. He has written for the Banner since 1988.... VIEW BIO
A housing market out of reach for residents
A three-bedroom condo unit at 4 Wyoming Street in Roxbury is listed for $619,999. BANNER PHOTO

At 105 Munroe Street in Roxbury, a two-family house that sold for $715,000 in 2014 is listed for $1,195,000 five years later, a testament to the real estate industry’s surging interest in the neighborhood. A few blocks over at 4 Wyoming Street, a three-bedroom condominium in a gut-rehabbed home is listed for $619,999.

As Roxbury’s housing market heats up, along with that of every other neighborhood in the city, home prices have moved far beyond the reach of the average Roxbury resident. From Chinatown — a once majority-Chinese immigrant neighborhood where the average homeowner now earns $373,000 a year — to predominantly African American Mattapan, Boston’s neighborhoods are undergoing changes driven by high rents and real estate prices and the vast disparities of wealth and income between whites, blacks and Latinos.

Prospective buyers view a two-bedroom, $489,999 unit at 4 Wyoming Street in Roxbury. BANNER PHOTO

Prospective buyers view a two-bedroom, $489,999 unit at 4 Wyoming Street in Roxbury. BANNER PHOTO

A 2015 study by the Federal Reserve Bank of Boston found that the median net worth for white families is $247,500 versus just $8 for African American families, $3,020 for Puerto Ricans and $0 for Dominicans. With the median price for a single-family home in Boston at $580,000 as of 2017, most current Boston residents cannot afford a $3,600 monthly mortgage payment, let alone put down even a 10 percent down payment of $58,000.

Looking to buy in Roxbury? The average price for a single-family home there is $680,000, twice the cost of the average home in Brockton, according to data compiled by Boston Magazine. With a 4.05 percent interest rate on a 30-year, fixed-rate mortgage, monthly mortgage payments, taxes and condo fees could easily cost more than $4,000 a month.

According to the real estate website Redfin’s mortgage calculator, the maximum mortgage payment affordable to two people each earning Boston’s median income of $66,758 is $2,615 a month.

A New York Times analysis that tracked date for predominantly African American neighborhoods found that in many urban census tracts, white buyers now outnumber black buyers. The Times reporters matched census data with 2012 data provided by banks under the Home Mortgage Disclosure Act to examine the income of residents, homeowners and white homebuyers in tracts across the country.

Four of the five census tracts the Times tracked in Boston’s Roxbury, Dorchester and Mattapan neighborhoods did not show white buyers in the majority in 2012. One in Roxbury and one in Jamaica Plain did. But the economic disparities underscored in the data suggest that Boston’s historically black and Latino neighborhoods are changing.

“It’s all about the dollars and who has the most,” says real estate broker Deborah Bernat. “The people who are able to close deals for the most part are people who have high incomes.”

In a Roxbury census tract bounded by Westminster Avenue, Washington Street, Marcella, Highland, Cedar and Washington Streets, 51 percent of home buyers were white in 2012. While the white population in that area was 11 percent of the total, the average income of the new white homebuyers, at $118,000 a year, was more than twice that of that of area residents’ $55,000.

In the formerly Latino-majority Jamaica Plain census tract bounded by Centre, Forbes, Chestnut, Boylston and Lamartine Streets, white buyers were 70 percent of the total. The white buyers’ average income was $154,000.

In recent years, housing activists have been increasingly concerned that low- and moderate-income people are being pushed out of Boston’s neighborhoods by high housing prices, in what many are referring to as a housing crisis. While there’s little data available on how the housing market is affecting buyers of color, there are troubling signs.

In the predominantly Latino neighborhood of East Boston, declining school enrollment suggests an out-migration of families into neighboring towns including Revere and Chelsea.

In a Boston Foundation report released this week, researchers found that 1 in 4 home loans made to African Americans in the state were made to homebuyers in Brockton, a popular destination for black families buying homes.

Although homeownership among blacks and Latinos has increased over the last quarter-century, the number of blacks and Latinos living in Roxbury, the South End and Jamaica Plain has trended downward between 1990 and 2017, according the Boston Foundation report. In 2017, twice as many blacks bought homes in Brockton as in Boston, even though Boston is seven times larger than Brockton.

Housing crisis?

Mayor Martin Walsh has pursued a strategy focused on housing production, calling for the creation of 69,000 new units of housing in Boston by 2030 to meet the demand of the city’s growing population.

Walsh’s plan includes the creation of 16,000 units of housing affordable to moderate- and low-income individuals and families — 23 percent of the total.

City Councilor Lydia Edwards says the Walsh administration’s market-based approach has done little to tame the city’s rapidly climbing home prices. The New York Times report, showing homebuyers’ incomes twice that of average nearby households underscores the limitations of market-based solutions, she says.

“The market will only support those who have the means,” Edwards commented. “Building more units does not create more housing options.”

Edwards, who has proposed a 6 percent real estate transfer tax on sales of more than $2 million, said the city could incentivize the creation of low-cost housing through tax relief deals that would allow developers to build large, affordable buildings.

“We come up with tax breaks to attract corporations like GE and Amazon,” she said. “We have to be as aggressive in promoting housing that’s affordable.”

On the positive side, Edwards said the city’s use of issuing bonds to preserve the affordability of reconstructed housing units at the Bunker Hill public housing development is an example of the kind of creativity needed to provide affordable housing options in Boston. She also cited the city’s Acquisition Opportunity Program, which provides loans to nonprofit and private developers to acquire apartment buildings in exchange for a guarantee to keep rents affordable for at least 50 years.

Edwards says developers respond favorably to incentives when the city intervenes in the market.

“I personally think government should be a stabilizing force,” she said. “For developers, it’s just about numbers and profit. Just tell them how they can do it and provide the incentives and they should.”

By the numbers:

  • $66,758 Median household income in Boston
  • $600,000 Median sales price for all property in Boston
  • $500,000 Median sales price for all property in Roxbury
  • 30 Percentage of African Americans who own homes in Greater Boston
  • 23 Percentage of Latinos who own homes in Greater Boston
  • 64 Percentage of whites who own homes in Greater Boston

All figures are for 2017, the last year for which American Community Survey data was available.

Sources: The Boston Foundation, Data USA

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