I attended the Boston 2012 symposium on Thursday & Friday. It was awesome. There was a tour of several of Boston's neighborhoods, on Thursday. We saw new low- and moderate-income based housing developments, some of which were financed by the city, state and federal governments, some built with private funds. The amount of money invested over the past half-decade in Dorchester, Mattapan, and Roxbury is amazing. You can see the positive results on every block. (Drive down Blue Hill Ave, for example, and you'll see what I mean.)

Boston is an expensive city in which to live. It's also really expensive to build here.

And, in the suburbs, it's even worse.

I grew up in a fairly wealthy community, in Topsfield. Next doo, was Boxford, which happens to have been the topic of an article in today's Globe.

Here are some statistics about Boxford:

Miles from Boston: 25
Population: 8,177 (2005)
Median house price: $620,000

Census facts: Median family income is $119,491 compared to the national rate of $50,046; 63 percent held a bachelor’s degree or higher compared to 24 percent nationally.

Nice, eh?

Here's the problem, though:

Boxford has resolutely resisted urbanization by maintaining a 2-acre minimum lot size; just 7 percent of land is assessed as commercial. And to preserve the rural look of the town, nearly every street is officially considered a scenic road and town rules require homeowners to seek approval before they can dislodge a rock wall or a tree.

Yeah, 2-acre minimums have a way of keeping a neighborhood "charming", don't they?

Most towns in Massachusetts have these sorts of restrictions.

Meanwhile, everyone complains about the high-cost of housing in the Commonwealth.

Supply and demand, right?

Richard Syron, CEO of Freddie Mac (and past president of the American Stock Exchange and Federal Reserve Bank of Boston) talked about this during his speech at the conference.

"Our big problem in cities like Boston ... is the (housing) supply side. We’re never going to solve the housing affordability problem unless we face that."

"You can’t say you’re in favor of affordable housing if you want stricter zoning, if you want all kinds of conditions on development," Syron said.

The solution to the problem of high housing prices isn't to artificially support the low-end of the market with subsidies for the lower-income population and affordable-housing set-asides.

It's to open up the market completely, allowing supply and demand to set the terms of the market.

Only then will you get more housing.

If you think the current slowdown in home sales volume will lead to a decrease in housing prices, you're mistaken. It just won't happen (at least during our generation). If you want lower prices, something else has to change.

Source: Freddie Mac CEO Syron expects subprime crisis to worsen - Associated Press, by way of The Boston Herald