While 2004 looks like another banner year, healthy top-line numbers can mask a growing problem for those in politically constrained markets like Massachusetts. There, despite a 10.5 percent increase in total permits, those issued for detached single- family homes are expected to continue a trend of recent years by dropping 5.4 percent, according to the Home Builders Association of Massachusetts (www.hbama.com).
Not surprisingly, Massachusetts housing prices increased more than 70 percent statewide in five years in according to one recent study. Nonetheless, jurisdictions in the home-rule state are fast-tracking permits for multifamily, active adult and affordable attached housing, while setting up hurdles to detached development in the form of large-lot zoning and avoidance of cluster development, which would ironically ensure more revenue generation from detached homes.
According to Mark Leff, chairman of the association's public policy committee,(shown above) small, mainstream builders are being pushed out of the market in many instances. Leff should know; in addition to his HBA post, he is senior vice president of construction lending for Salem Five Bank.
"We need to do a better job educating people," says Leff, "and fighting misinformation," like the commonly held notion by regulators that residential development is a tax liability. He says many local planners calculate "two kids in school for every detached house that's built. The accurate figure is about 0.6 children for every house, and in fact most new houses are contributors to revenue for the town."