As more people in the Boston area feel squeezed by the housing market, they’re facing a new hurdle: a drop in the economic growth that normally spurs new construction.
So far, the slowdown has done little to relieve a growing affordability gap for buyers and renters, according to the Greater Boston Housing Report Card released on Nov. 12 by The Boston Foundation, its researchers at Boston Indicators, and Boston University’s Initiative on Cities. But, in contrast with previous reports, researchers went beyond local regulatory hurdles to blame federal funding cuts, immigration policies, and tariffs introduced under President Trump for creating “deep uncertainty” in what has long been one of the country’s least affordable housing markets.
“These shifts threaten the fragile rebound in population growth, which reached 1.2 percent in 2024, the fastest pace in years,” the report’s authors wrote. “They also raise the prospect that Greater Boston could once again slip into population decline. While slower immigration might modestly ease housing demand, that is no substitute for instead simply building more housing.”
Over the four years through 2024, the report found sharp growth in the region’s population, mainly from new immigrants, but also a sharp increase in housing costs. During that time, the annual income needed to buy a home at the low end of the market had spiked from $98,000 to $162,000. Though prices and rents have begun to level off, they remain high.
“The share of renter households able to afford an entry-level home,” according to the 2025 Report Card, “has been cut in half in just four years, falling from about 30 percent in 2021 to just 15 percent today.”
New housing completions in Greater Boston have rebounded from years of the Covid pandemic — more than doubling from 2021-22 to 2024-25, thanks to financing secured before the rise in interest rates starting 2022. But the number of units being newly permitted has dropped by 44 percent — with much of the decrease blamed on “macro-level causes.”
“All of these recent headwinds compound longstanding local barriers such as restrictive zoning, costly building code requirements, and lengthy approval processes,” the report noted. “Another warning sign is the high number of units that have been permitted but have not yet started construction.”
Among the pending developments is Dorchester Bay City, a mixed-use project with 1,957 units on the Columbia Point Peninsula that has been in planning mode since as early as 2019. A state permit for the project was challenged earlier this year by the Harbor Point Community Task Force, in connection with environmental and transportation concerns.
In August, the Boston Planning and Development Agency (BPDA) Board approved 754 units of housing in two 18-story towers on Morrissey Boulevard, near JFK/UMass Station. A 2020 plan for the site was changed in 2022 to include lab space, which was later dropped after a downturn in the Boston area’s life science sector. Projects on both sides of Morrissey Boulevard will also be affected by plans to improve transportation and mitigate the vulnerability to rising sea levels.
Seventy-two units are planned for 150 Centre Street, near Shawmut Station, for which Trinity Financial made its initial filing with the BPDA in June 2022. The project later faced three legal challenges that were dismissed in April.
The largest recent project to materialize so far is Dot Block, between Dorchester Avenue and Pleasant Street. Phase I, with 243 rental units, opened in the summer of 2023. As of Nov. 29, the project’s website listed 35 rentals available, a much greater share than city’s current real-time vacancy rate posted by Boston Pads – 2.33 percent, exceeding the figure of 1.84 percent for the same time last year.
The monthly prices for two-bedroom units at Dot Block listed from $3,620 to $4,065. For rentals, the website boasts large private patios with “breathtaking city and bay views.” Also on offer for new applicants: “two-months free on all floor plans.
Even in January, Dot Block developers changed plans for the project’s second phase. The number of units was slightly reduced, and the 84 units in a 5-story building would all be affordable, thanks in part to $5 million in funding from the city.
For the regional market, signals are mixed. In November, the real estate brokerage service company Redfin gave the Boston area a low ranking for properties being taken off the market—a sign of strength for sellers. But the real estate market company Zillow ranked the area among the nation’s leaders in price cuts, with cumulative reductions in October at $49,900.
In its October survey of economic conditions in New England, the Federal Reserve Bank of Boston reported that payroll growth had “slowed significantly.” According to the survey, growth was down in education and health services, and government sectors, while there was a decrease in construction jobs.
In October, Associated Industries of Massachusetts (AIM) reported the eighth consecutive month with a measure of confidence below 50—in pessimistic territory. This was the first string of 8 months below 50 since the pandemic. And, in mid-October, Mark Zandi, chief economist at Moody’s Analytics, included Massachusetts among 22 states at risk of entering a recession.
An October report for the Greater Boston Chamber of Commerce warned that federal funding cuts pose “serious threats” to the state’s educational and medical institutions (“eds and meds”), as well as hundreds of life science companies and billions of dollars in life sciences venture capital. The report estimated that cuts in research and Medicaid funding “could eliminate $5.9 billion in annual economic output,” affecting more than 22,300 jobs, with losses in employee compensation and tax revenue. The largest impact would be in the Greater Boston region.
The potential losses, according to the Chamber’s report, “threaten to undermine the ecosystem of innovation, education, and healthcare that distinguishes the Commonwealth of Massachusetts in global competition for businesses, talent, and investment. The concentration of losses in highly skilled sectors means the economic impact per job will be greater than typical employment reductions.”
An April report from Boston University’s Questrom School of Business estimated that Trump tariffs in 2026 would reduce the state’s economic growth by $12.8 billion, with the loss of 79,000 jobs and $1 billion in lost tax revenue—a figure updated in October to $2.4 billion, but also factoring in the tax and spending bill approved by Congress. In addition to the effect of tariffs, the April report also warned of economic harm from federal research funding cuts and immigration enforcement.
The report’s lead researcher, Mark Williams, a finance lecturer at the Questrom School of Business, estimated that Massachusetts will hit a recession by the third quarter of 2026, though he emphasized that federal policies could already be affecting housing production and demand.
“As the [Massachusetts] economy slows, and we lose immigrants, a key labor source for the construction industry, the demand for new housing will decline,” Williams wrote in an email response. “This is not because need has gone away, it is because the economy is too weak to support needed housing.”
The Housing Report Card estimates that the decline in immigration to Greater Boston this year could be in the “low tens of thousands.” Researchers acknowledged that drops in immigration, along with drops in visas for students and temporary workers in specialty occupations, could weaken housing demand in some areas and moderate prices. But the Report Card insisted that there would be more benefit from increased production.
“By contrast,” researchers wrote, “if vacancy rates rise because the economy weakens or population growth is held back, the result is not stability but contraction: a shrinking tax base, disinvestment, and households struggling to afford homes even at discounted prices.”
Since January, according to the Report Card, court-ordered removals of immigrants in Massachusetts exceed the total for last year by 47 percent. On Oct. 27, the US Dept. of Homeland Security (DHS) announced “record-breaking statistics,” with 527,000 “illegal aliens” removed from the country in 2025 and another 1.6 million who have “voluntarily self-deported.”
DHS has also set termination dates on “Temporary Protected Status” (TPS) for many immigrants who have been living in the US legally, in some cases for many years. For the state’s largest group of immigrants with TPS, from El Salvador, the status has been extended through September of 2026. For the next largest group, from Haiti, TPS is due to expire in two months, on Feb. 3, 2026. The termination of TPS for immigrants from Haiti and Venezuela is facing a legal challenge, with 15 state attorneys general—including Andrea Campbell of Massachusetts—filing briefs to reverse the DHS decision.
On Nov. 19, DHS announced a proposed rule change that would make it easier to deny permanent resident status for immigrants found likely to become at any point a “public charge.” DHS said the change was based on policy for “aliens” to be “self-reliant,” and for government benefits not to incentivize immigration.
But there are also more hurdles for immigrants trying to work in the US. On Oct. 29, DHS announced that it would end automatic extensions of employment authorization documents for some immigrants while their renewal applications are pending. DHS explained that the move was meant to prioritize “proper screening and vetting.”
Dana Dyer, the director of Refugee Services at the workforce development nonprofit JVS Boston, said the recent increase in fees for authorization documents, to between $470 and $1,100, can be a huge barrier.
“So when people lose one form of authorization and cannot afford to renew,” Dyer explained, “they would lose their jobs, income, and need to exit the workforce – despite having the potential to earn and contribute as employees in the local economy.”
Dyer related that concern and confusion about changes in immigration policy have also affected employers, resulting even in some cases of immigrants being incorrectly terminated.
“In general,” she said, “we are seeing that employers are more inclined to factor in the longevity of an immigrant’s work permit when making a hiring decision – which may not always have legal grounding. Immigration policy changes have been so frequent in the past year and have often been made more complex through ongoing legal challenges. As a result, employers, immigrant job seekers, and employers of immigrants face a significant burden to understand impacts of each change and respond accordingly – often leading to increased tension, confusion, and pressure in the workplace and/or hiring arena.”
The Housing Report Card found a small reduction in homelessness, with a sharp decline in the emergency shelter population that peaked in the recent immigration surge. But researchers said said it was unclear how many former shelter occupants had since found stable housing.
During 2025, programs for supportive housing have become another point of contention over policy, with the Trump administration and allied policy groups trying to reverse initiatives such as “harm reduction” for persons with substance use disorder and “housing first” as a strategy to increase the odds of recovery. Critics of the initiatives blame them for being ineffective and for increasing homelessness, while officials in Boston blame other factors, such as the overall cost of housing, while emphasizing that much of the local homelessness population is from other communities.
On Nov. 25, Campbell joined a coalition of 20 attorneys general in a legal challenge to new policies from the US Dept. of Housing and Urban Development (HUD) for “Continuum of Care” programs for homelessness. The AGs argued that “unlawful restrictions” on the programs “dramatically reduce” the amount of funds for permanent housing and project renewals.
“Research has shown that getting people off the streets and into stable housing builds a foundation for addressing other pressing needs like job training, mental health care, and substance use treatment,” Campbell said in a release. “Instead of helping us tackle our critical housing problem, the federal government is standing in our way and putting thousands of vulnerable people at risk.”
In remarks before a presentation on the Report Card, Boston Foundation President and CEO Lee Pelton observed, “These trends are not inevitable. They reflect choices, policy choices, investment choices, and collective priorities that we have the power to change.”
In the October update to his report for BU’s Questrom School of Business, Williams was more specific, calling for a “MassStrong Action Plan,” with 15 recommendations—from legal action against federal policies to collaborations between sectors and alliances in Congress, even trade agreements between individual states and foreign countries.
“Unless these White House policies are rolled back, the near-term financial harm to Massachusetts are significant,” he wrote in an email response. “These harmful economic policies have also put Massachusetts in a defensive position with focus on how to manage a slowing economy that could move into recession.”
