Home costs are called a drag on Massachusetts growth

The Boston Globe reports:

High home prices are limiting the Boston area's ability to regain the jobs lost in the 2001 recession and sustain economic growth, according to two new studies being released today during a conference at Boston's Federal Reserve Bank.


Massachusetts house prices are the third-highest in the country, according to the US Census Bureau, after California and Hawaii. The median price for a single-family home in Massachusetts has risen 78 percent from 2000 to 2006, to $325,000.

While it is well documented that the state's high housing prices make it difficult for many young residents to purchase their first home, few studies have attempted to connect housing costs to economic growth. Massachusetts employers often cite high housing prices as a major reason they expand operations in other states, where costs -- and therefore, the wages they pay -- are lower.

The new research also linked high housing costs to the state's population losses, an issue that has sparked debate among gubernatorial candidates in recent days over the most effective policies to stem the outflow of residents. Between 2003 and 2005, the population is estimated to have declined by nearly 19,000, despite an influx of immigrants.

''High housing prices are hurting our economy today because they are discouraging employment growth and encouraging out-migration of the population," said Barry Bluestone, director of the Center for Urban and Regional Policy at Northeastern University. In a study comparing 245 US metropolitan areas, he found the negative impact of high prices on the Boston metropolitan area's job growth was exceeded only by the impact on jobs in two California cities, San Francisco and San Jose.

A separate study, by Edward Glaeser, a Harvard economics professor, found that Boston-area prices were more volatile -- the peaks are higher and drops are steeper -- than prices in other US metropolitan areas. In Boston, he said, median sales prices during any five-year period can swing by an average $43,000 above or below the longer-term trend between 1980 and 2004. In contrast, Atlanta's average price swing was $8,200.

One factor that drove prices up sharply during Boston's recent housing boom was a lack of supply stemming from limits on development in the city and the suburbs, where it is often difficult to obtain permits and where historic preservation is often a barrier to building.

They don't seem to have this problem in Houston.Some states want a middle class and some don't.Massachusetts just doesn't like middle class people.So many people have voted with their feet.