Housing development in rural areas is the fastest-growing type of land use in the U.S. For birds, development near natural habitats is a problem because it can reduce abundances and nesting success and increase brood parasitism by brown-headed cowbirds (Molothrus ater). In southern New England, populations of shrubland birds are declining rapidly while exurban development is widespread and increasing. We studied effects of landscape-scale low-density housing development on abundance and nesting success of birds in western Massachusetts shrublands. Study sites included beaver wetlands, utility rights-of-way managed as shrublands, regenerating clearcuts, and mechanically treated old fields. Of 14 focal bird species, four increased with development within 1 km of study sites whereas white-throated sparrow (Zonotrichia albicollis) decreased. Abundances of avian nest predators increased slightly with development, and abundances of brown-headed cowbirds decreased with development. Prairie warblers (Dendroica discolor) had lower nest success in more developed areas, but for seven bird other species and the community as a whole, nest success did not change with development in the surrounding landscape. Brood parasitism by brown-headed cowbirds was higher on sites with more development. Overall, only white-throated sparrow and prairie warbler showed negative impacts of development, but both of these species are declining rapidly in New England. Housing development in the surrounding landscape should be a consideration in management of these species. For other shrubland birds, however, low-density housing development at the landscape scale appears to have more neutral or even positive effects.