Soaring housing prices a growing concern

The Bay State’s booming economy is bringing with it a downside for those looking to rent an apartment or buy a home in the state: soaring housing costs, particularly in Greater Boston.

The problem isn’t new, but it’s more acute in places where the economy has taken off, spurred by a surge in the life sciences sector and the arrival of top companies like General Electric. That upward pressure is one reason why Beacon Hill leaders are continuing to look for ways to create new affordable housing units while preserving existing units.

Gov. Charlie Baker this week announced $72 million in housing subsidy funds and additional state and federal tax credits to 25 projects across the state. The goal is to help create, refurbish and preserve 1,970 housing units, including units reserved for low-income families and families making their way out of homelessness.

“Safe and affordable housing is a cornerstone to the success of our commonwealth’s families, including access to job opportunities for many of our most vulnerable populations,” Baker said in announcing the funds for 17 communities.

Among the projects is Mechanic Mill, a mixed-income historic rehabilitation project in Attleboro. When finished, the project will offer 91 housing units, including 56 affordable. Of the affordable residences, 10 will be reserved for households earning less than 30 percent of the area’s median income. All 91 units will be reserved for people who are 55 or older.

Baker isn’t alone in focusing on the state’s housing needs.

At the State House, dozens of bills have been filed in response to the ever-tightening housing market.

One bill would give tenants of residential buildings with three or more units the right of first refusal to buy their building at fair market value; other legislation would expand or tighten the definition of affordable housing; and another bill would address affordable housing developments in certain communities.

The Legislature’s Joint Committee on Housing is holding a hearing Tuesday at the State House to consider nearly two dozen bills, including some aimed at preventing homelessness and others that would attempt to stabilize the rental market and help those looking to buy their first home save the money needed for a down payment.

As of the end of June, Massachusetts home values had gone up 7.2 percent over the past year, according to real estate data provider Zillow, which predicts a rise of 3.3 percent during the next year.

While the median home value in Massachusetts is $375,500, the median price of homes currently listed in Massachusetts is $425,000.

Rents are also high, with the median monthly rent in Massachusetts at $2,600.

In Springfield, the median home value is $143,200. Despite the more modest price compared to the state as a whole, the cost represents an increase of 8.6 percent over the past year, according to Zillow. The median rent in Springfield is $1,325.

In Boston, it’s another story. The median home value in New England’s largest city is $558,300, a jump of 11.5 percent over the past year. The median rent is $2,700.

In neighboring Cambridge, the story is equally dramatic. There the median home value jumped by 10.7 percent over the past year to $729,400. The median rent has soared to a daunting $3,000 a month.

Cambridge is also the location of one of the affordable housing projects Baker is touting.

That project seeks to replace some property damaged or destroyed in a fire in the East Cambridge neighborhood last December. The project includes a dozen units reserved for households earning less than 30 percent of the area’s median income.