Future Housing Demand in Massachusetts

Massachusetts needs more homes, but how many? To answer this question, EOHLC and its partners pored over demographic trends and tested out different scenarios for the future. The analysis accounts for the aging of the population, movers to and from Massachusetts, and different housing needs across the life cycle. It also accounts for today’s housing shortage and unmet housing needs, as expressed in overcrowded and doubled-up households, homelessness, and low vacancy rates. The team produced multiple scenarios for future demand based on different assumptions about population and household trends.

In order to close today’s supply shortfall and meet anticipated housing needs under a mid-range population growth scenario from 2025-2035, Massachusetts needs to add at least 222,000 homes to the year-round housing stock. This is the minimum number needed to achieve a state of housing abundance, when the limited supply of housing is not a primary driver of unaffordability. Here are some key findings from the analysis: 

• After a decade of rapid growth in the 2010s, Massachusetts is facing strong demographic and economic headwinds likely to result in much slower growth over the coming decades. Contributors include declining birth rates, federal immigration and education policy, and competition from other states for young talent. If some recent trends continue through 2035, Massachusetts could experience no population growth and declines in the resident labor force.
• Even if the population doesn’t grow, housing demand is likely to increase. Over the next decade, an estimated 493,000 Millennials and Gen Z residents will be forming households. Meanwhile, Baby Boomers and the Silent Generation are projected to free up only 391,000 homes as they move away, pass away, or move to other housing situations. As a result, a no-growth population scenario still entails a net increase of 73,000 households.
• More homes are also needed to address the current shortage. An estimated 57,200 homes are needed to accommodate overcrowded & doubled-up families, young adults living with parents or roommates, and families and individuals currently living in shelters.
• In order to achieve a healthy vacancy rate, an additional 51,400 homes are needed for-sale or for-rent. The state may also need 9,600 units to compensate for the anticipated conversion of year-round homes to seasonal residences.
• If the state can attract and retain more young adults, it can bolster its labor supply while modestly increasing housing demand. The Middle Scenario forecasts 0.7% population growth, stabilization of the labor force, and demand for an additional 36,000 homes. The High Scenario, which assumes even greater migration to Massachusetts, would result in population growth of 2.3% and an additional 39,800 households needing homes.
• Additional supply is needed in every region across the Commonwealth at varying levels, ranging from less than 2% on Cape Cod and Western Massachusetts to more than 7.5% in Metro Boston and the abutting regions. This production target is about ensuring the adequate overall supply to meet demand; it is not a measure of how many affordable homes are needed for cost-burdened low- and moderate-income residents. That is a challenge that must be addressed partly through new construction as well as through affordable housing preservation, acquisition of existing homes, and direct household subsidies.