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A recent article in the Boston Globe about a boom in luxury housing in the city found that over the next three years, more than 8,000 high end apartments will be built in Boston — doubling the supply of luxury units for rent. These apartments come with yoga rooms, roof decks and rent for as much as $4,000 dollars a month for just one one bedroom.
The Globe quoted one developer who said, "This kind of residential construction hasn't been seen in Boston since the 1800s, when the Back Bay, Beacon Hill and the South End were built." Which raises two big questions: first, is this luxury housing boom sustainable?
Second, and arguably more important: what about the need for less expensive housing for middle and working class families? Rents in an around Boston are already high, averaging $1,800 a month.
And they're rising — up almost ten percent in the past four years — outpacing many families' ability to afford them. A big majority of low-income renters spend more than half of what they earn on housing.
So what has to happen to increase the stock of affordable housing in cities like Boston? If market forces have unleashed a luxury housing boom in the city, are there policies and incentives that can light the fuse of an affordable housing boom or boomlet?
Ed Glaeser, Fred and Eleanor Glimp Professor of Economics at Harvard University.
This segment aired on March 27, 2014.