NAIOP Joins Mass. Municipal Association, Housing Advocates and Business Leaders in Support of Housing Choice Legislation

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On May 14, NAIOP’s CEO Tamara Small testified before the Joint Committee on Housing in support of H.3507, An Act to Promote Housing Choices. If passed, the bill would enable cities and towns to adopt certain zoning best practices related to housing development by a simple majority vote, rather than the current two-thirds supermajority.

Small testified on a panel with representatives from a coalition of groups responsible for permitting and building housing throughout the Commonwealth including Jon Robertson, Legislative Director at the Mass Municipal Association; Benjamin Fierro III, Counsel to the Home Builders and Remodelers Association of MA; Greg Vasil, CEO of the Greater Boston Real Estate Board; Robert Brennan, President of CapeBuilt Development; and Kathleen Franco, CEO of Trinity Management. The group expressed their strong support for the bill, which would make it easier for communities to enact local zoning changes that encourage housing development.

In her testimony, Small underscored the importance of partnerships between developers and the communities. “Any successful housing development requires a partnership between the developer and the community to ensure that the project addresses local needs,” said Small. “The legislation preserves that partnership by requiring a majority vote, while making it easier for communities to rezone property to encourage more housing production.”

Throughout the hearing, mayors, housing advocates, and business leaders, including Mayor Kim Driscoll of Salem, Mayor Joseph Curtatone of Somerville, the Metropolitan Area Planning Council, the Smart Growth Alliance, CHAPA, and the Massachusetts Business Roundtable testified in support of the bill and called on the Joint Committee to report H. 3507 out favorably.  

NAIOP will continue to advocate for passage of the bill as soon as possible. Because communities enact zoning changes at annual Town Meetings, quick passage of this bill is needed to ensure that implementation of these important reforms is not delayed another cycle.

NAIOP Files Amicus Brief in Marchese v. BRA: Brief Urges SJC to Uphold Superior Court’s Decision in Favor of BPDA

Law firm WilmerHale recently filed an amicus brief on behalf of NAIOP Massachusetts, The Commercial Real Estate Development Association, in the case of Joseph Marchese vs. BRA.  The amicus brief urged the Supreme Judicial Court to affirm the Superior Court’s decision in favor of the Boston Planning and Development Agency (BPDA), formerly known as the Boston Redevelopment Authority (BRA).

NAIOP chose to pursue this opportunity because the case addresses the “demonstrations clause” of the urban renewal statute, a critical economic development tool, which is often used for artistic, cultural and historical preservation in the City of Boston.  NAIOP believes that if the BPDA and similar agencies cannot use their statutorily granted powers of eminent domain to carry out demonstration projects and plans, it could chill development throughout the Commonwealth.

“We are grateful to the incredible team at WilmerHale for their work,” said Tamara Small, CEO of NAIOP Massachusetts. “Joseph Marchese vs. BRA has wide reaching implications for our industry and all of Boston. The BPDA’s success in this matter will benefit Boston’s continued economic development, as well as positively impact the City’s communities and public spaces alike.”

The WilmerHale team involved in the matter was led by Partners Keith Barnett and Michael Bongiorno and included Senior Associate Arjun Jaikumar and Associates Matthew Costello and Julia Harvey.

Oral arguments began on Thursday, May 9.

BPDA Director Brian Golden Speaks on Boston’s Development Climate at NAIOP’s Government Affairs Luncheon

This guest blog post was written by Meghan Doherty of BLDUP.

At a recent NAIOP Government Affairs program, hosted at the office of Nutter McClennen & Fish, Boston Planning and Development Authority (BPDA) Director Brian Golden discussed Boston’s current development climate and the upcoming planning initiatives his office is pursuing.

Director Golden opened with a brief history of the BPDA crediting Mayor John B. Hynes for starting the office in the late 1950s. During that time, as the middle class was moving away from cities into the suburbs, Boston saw its population drastically declining, which led to the creation of the Boston Redevelopment Authority. The newly created entity was tasked with promoting development in order to attract economic investment in Boston. It worked. Between 1980 and 2010, Boston’s population grew at a rate of around 1,500 people each year. Since 2010, Boston’s population growth has skyrocketed gaining around 8,000 additional residents each year.

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In fact, Boston’s rapid growth in the past 10 years has led to the BPDA adjusting its population projections. In 2014, just over 709,000 citizens were projected in the City of Boston by 2030. Revised projections have increased that number to 759,000. This population growth is driving development and planning throughout the city. Since Mayor Walsh has taken office, around $50M new square feet of development have been approved. Mayor Walsh’s administration has also increased the city’s housing goals from 53,000 to 69,000 new units of housing. Currently, Boston is ahead of pace for this goal since much of the development in the past few years has been residential.

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Director Golden also discussed the importance of the IDP requirements currently in place to bring middle income and affordable housing to the city. Since the IDP program began in 2000, nearly 2,600 income-restricted housing units have been built and over $137M has been raised in the Inclusionary Housing Fund. When asked about the possibility of increasing the IDP requirement from the existing 13%, Director Golden cited two examples from recent trips to Seattle and San Francisco. In San Francisco, IDP requirements are high, around 20%, and this burden has halted many projects. This policy, Director Golden believes, is an overreach. As he said, “20% of nothing is nothing.”  In Seattle, however, the IDP requirement is 11% and working well. His goal for Boston is to ensure that projects can move forward while also providing for the maximum amount of housing the market will allow.

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Other highlights from Director Golden’s presentation included:

  • New projects are increasing property tax revenue for the city at a record pace, and these are benefits that flow to all Bostonians. For 2019, the BPDA estimates an additional $77M in tax revenue from new projects alone. These funds are crucial to the city budget to maintain the high quality of life Boston residents expect.
  • Diversity is top of mind for the BPDA’s actions in the city. All RFPs for public land will include criteria to promote diversity and inclusion. The BPDA expects to see a robust plan for diversity and inclusion through all phases of the development including the development/design team through the workforce building the project.
  • The BDPA’s  Resilient Boston Harbor initiative, which will kick off public engagement this month, will focus on how all different types of existing and new projects can deal with rising sea levels. The BPDA’s goal is to use this opportunity to elevate the public realm. Golden cited Moakley Park as an example. Plans here will rework Columbia Road and Day Boulevard to build a natural barrier to deal with the predicted sea level rise while also creating a world-class park. 10% of the city’s capital budget will be devoted to building out pieces of elevated public infrastructure like this project.
  • The BPDA currently is working on 16 major planning initiatives across the city. A full list can be found here http://www.bostonplans.org/planning/planning-initiatives

During the Q+A, when asked what the biggest hurdles are for Boson to reach its 2030 goals, Director Golden cited transportation and affordability. Currently, his office is working on the Go Boston mobility study and stressed that ensuring quality public transit will be key to ensuring continued growth.

Director Golden’s presentation was a thorough overview of the state of development in Boston. It gave a positive view of the future of Boston’s economic and community-oriented future, and his comments gave attendees important insight into the goals of the BPDA over the next few years. It is clear that Director Golden has a holistic understanding of the landscape in Boston, and will continue to work with NAIOP members and other key stakeholders to plan for Boston’s future, while respecting its past.

The Time to Act on the Housing Crisis is Now

This post was originally published as an op-ed in Banker & Tradesman on 3/17/19.

Apartment-InteriorSometimes data can simplify even the most emotionally charged and complicated policy debates. Housing policy is no exception to this rule. Recent data may provide some clarity on how we got to where we are today, as well as how we can begin to address the current housing crisis 

Today there are more people working in Massachusetts than at any other time in the commonwealth’s history. According to the University of Massachusetts’ Donahue Instituteby the year 2040 the Massachusetts population is projected to increase by 600,000, with the fastest increase projected in Greater Boston’s inner core. Boston’s population is growing more quickly than previously expected, with 759,000 residents expected to live in Boston by 2030.  

As a result, the Metropolitan Area Planning Council (MAPC) projects Eastern Massachusetts will need 435,000 new units of housing by 2040However, according to the Massachusetts Housing Partnership’s Center for Housing Data, annual housing production is only about half of what it was in the 1960s, 70s and 80s. Massachusetts permitting is 36 percent less housing than the national average (based on new housing per capita), ranking us 38th in the nation 

Words Not Enough to Address Crisis 

At the current pace of housing construction, the commonwealth will be more than 90,000 units short of demand by 2030  

At the same time, permitting requirements have become more onerous with local rules and special bylaws, making the development process longer and more unpredictable. Appeals frequently delay the start of a project by one to two years or often kill the project altogether. To complicate matters, construction inflation is at 6.5 percent in the Boston market – higher than the rest of the nation.  

The lack of housing is now approaching crisis level. The number of communities with median prices above $1 million has doubled in the past decade. As a result, the shortage of workforce housing is now significant threat to our economic growth. Business leaders frequently struggle to attract the best talent when competing with other states that provide more affordable housing opportunities.   

While tackling this issue will require a multi-pronged approach, the data show that this is, in large part, a supply and demand issue. Without more housing production it is becoming very clear that the state’s potential to grow its skilled workforce will be at risk.  

Many Massachusetts communities are now recognizing, some for the first time, they need to do more to encourage growth. The 15 members of the Metro Mayors Coalition late last year announced a target to create 185,000 new housing units across the region by the year 2030. It is a laudable goal and these communities should be applauded for their leadership. However, simply saying you want housing does not create itActionable steps are needed to achieve this goal.   

Fortunately, An Act to Promote Housing Choices (House Bill 3507), recently filed by Gov. Charlie Baker, provides a clear framework for cities and town to encourage new housing production.   

 Bill Helps Communities That Want to Change 

The legislation, which is supported by a broad coalition including the Massachusetts Municipal Association, NAIOP – The Commercial Real Estate Development Association and the Smart Growth Alliance, among others, makes it easier for communities to work with developers to encourage sustainable growth.   

The legislation allows cities and towns to adopt certain zoning best practices by a simple majority vote, rather than the current two-thirds supermajority. This would be allowed in situations where the zoning change will encourage more concentrated development including the adoption of 40R “Smart Growth” districts or starter homes, reduced parking requirements, accessory dwelling units and/or reduced minimum lot sizes.  

This legislation also includes a provision, added during the last legislative session by the Joint Committee on Housing, that would reduce the voting threshold for a local special permit to a simple majority. This would apply to multifamily or mixed-use projects with at least 10 percent affordable units that are near transit or in commercial centers.  

While there is no one silver bullet to solving the housing crisis, the supermajority threshold has long been a barrier for needed housing developments throughout the commonwealthThis legislation would make it easier for communities to rezone property to encourage more housing production  

During the legislative session that concluded in July 2018, the bill came close, but did not pass.  Since then, housing advocates, planners, developers and municipal officials have come together to support the passage of this legislation. On behalf of this remarkable coalition, we urge the legislature to pass this bill as quickly as possible. The time for action is now.  

NAIOP Weighs In On Focus40: The 2040 Investment Plan for the MBTA

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Today NAIOP submitted comments in support of Focus40, the 2040 Investment Plan for the MBTA. NAIOP applauds Secretary Pollack and the Baker-Polito Administration for the significant time and thought that went into Focus40.  A reliable public transit system is critical for sustained economic growth and NAIOP believes that Focus40, combined with the Administration’s Commission on the Future of Transportation in the Commonwealth, and ongoing initiatives such as Rail Vision, as well as the significant work done by the Fiscal and Management Control Board, create a framework for the future.

By focusing on the three tiers of Doing, Planning and Imagining, Focus40 identifies investments that will make the MBTA a more reliable, robust and resilient public transportation system. Focus40 identifies 12 key programs: Blue Line 2040, Orange Line 2040, Green Line 2040, Silver Line 2040, Red Line 2040, Resiliency, Customer Experience, Paratransit, Commuter Rail 2040, Water Transportation 2040, Bus 2040 and Place Based Service Additions.

NAIOP’s comment letter is very supportive and encourages additional focus in the following areas:

– Water Transportation: In the current draft, an identified program objective for 2040 is “supporting a robust, multi-operator Boston Harbor water transportation system, serving more passengers and destinations and excellent connections to landside MBTA service.”  NAIOP believes that water transit has significant potential and that Focus40 provides a unique opportunity to further investigate how waterfront communities, including Boston, could benefit from an expanded system.  NAIOP looks forward to serving as a resource on this issue.

– Ride Sharing and Technology: While references to ridesharing are made under the Customer Experience program recommendations, NAIOP suggests that detailed analysis about the current and future impact of ride sharing services, e.g. Uber, Lyft as well as other technologies be included.  In addition to offering an alternative or complement to MBTA service, these companies are changing the composition of our streets and the level of congestion in many areas.  New and “disruptive” technologies are already impacting transportation and should be considered, making enhanced transportation information sharing through technology an integral part of the Commonwealth’s transportation plan.

– Regional Needs: Considering how the program objectives and recommendations might affect access to other parts of the Commonwealth should be further investigated in Focus40.  While we acknowledge that the MBTA is first and foremost the public transportation system for Boston and surrounding communities, we think that it’s necessary to zoom out and look at outside factors that may interact with the MBTA lines.

– Non-Capital Priorities and Human Resources Planning:  While it is important to have goals and big ideas to guide large investments, the essentials of good MBTA administration are absolutely critical.  The transformational work of the Fiscal and Management Control Board over the past three years illustrates this very clearly.  It is imperative that the big ideas in Focus40 do not overshadow the vital day to day needs and expectations of the region.  We recommend that Focus40 consider how human resources planning and operational strategies will allow this to continue.

Finally, it’s worth noting that in 2015, at the start of the Baker-Polito Administration, NAIOP issued the report, From Good to Great: Recommendations for the Baker-Polito Administration.  The report was based on member feedback and included recommendations on a wide range of policy areas, including transportation.  Specifically, NAIOP urged the Administration to develop a “Vision 2040 Transportation Plan,” which “should address tomorrow’s opportunities, focusing on the issues which may arise over the next 25 years, including long term demographic, economic, environmental, technological, cultural and governmental transformations, the potential effects of global climate change on infrastructure, and the development of new modal choices.”  It’s great to see that when NAIOP members weigh in, policymakers listen! We look forward to continuing to engage members and working with the MassDOT team on this and other transportation initiatives.

Luxury Residence Report Misses the Mark

A report was recently issued from the Institute for Policy Studies that has attracted significant media coverage and editorials from virtually all of the local print and broadcast outlets.

Elisif_20161213_5514.jpgCredit: Elisif Brandon

It’s a great story: the ultra-rich, international money launderers have descended on the Boston real estate scene, crowding out poor and middle-class residents.

However, when you go beyond the buzz and dig into the content of the report, there is much to question. The report implies that owning condos through a trust or LLC is done to hide the owner’s identity. This form of ownership is actually a very common practice for tax, estate, and transactional reasons. Furthermore, while some buyers may choose to remain anonymous, it’s rather uncommon and to imply that anyone who does this is somehow laundering money is factually incorrect.

If these higher priced apartments or condos were not built, middle income apartments would not be replacing them — the economics just do not work with the current high construction costs. Furthermore, these buildings are already paying a tax devoted to the production of affordable housing, with a requirement to provide for at least 15 percent of the units built on site as affordable or a fee to produce those units off site. In addition, the city’s office buildings must also pay a “linkage fee” for affordable housing and workforce training.

Virtually all of these new developments are built on vacant land or in commercial areas where there had not been any housing, so they have not displaced existing residents. In fact, many of these developments have been the catalyst to creating new 24/7 neighborhoods.

If these condo owners are not here full-time to justify a residential tax break, so what? Do we want to discourage retirees living in Florida from living here for six months? Do we want to tell the penthouse owner, Michael Dell, to take a hike and take his jobs with him? I don’t think so.

The real issue is that it will take federal and state resources, communities working with developers, and overcoming NIMBY-ism and fear of affordable housing at the local level to truly address this housing crisis. Rather than drawing false conclusions and creating easy scapegoats, it’s time we all come together to find economically feasible solutions.

This letter to the editor originally appeared in the Boston Business Journal on September 20, 2018, as written by NAIOP Massachusetts CEO David Begelfer.

 

20 years later, Brownfields Act remains a pioneering policy

This op-ed originally appeared in Viewpoint on bizjournals.com on September 13, 2018. The joint op-ed was authored by Ned Abelson, attorney at Goulston & Storrs and co-chair of the NAIOP Brownfields Committee, and by David Begelfer, NAIOP Massachusetts CEO and an active participant in the passage of the Brownfields Act. 

Twenty years ago this summer, Gov. Paul Cellucci signed into law the “Brownfields Act,” establishing new incentives and protections to encourage parties to clean up and redevelop contaminated property in Massachusetts. This law provides comprehensive liability relief and financial incentives to attract new investment in these properties while ensuring a safe and effective cleanup. Simply put, without the passage of the Brownfields Act, many communities that are now thriving would be filled with vacant and contaminated properties.

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A Brownfield site is blocked from productive use because of potentially hazardous contaminants. Prior to the passage of this law, developers considering cleaning up and then redeveloping such a property often concluded the effort was simply too risky, too expensive and too time-consuming to offset future profits from leasing the property to retailers, businesses and residents.

A model for states across the country, the Brownfields Act allows innocent Massachusetts real estate owners and operators to apply to the Department of Revenue for a state income tax credit to offset the net cost of the cleanup. Any party that contaminated a property or owned the property at the time of contamination is not eligible for the tax credit. Depending on the extent of the completed cleanup, the taxpayer may apply for a credit equal to either 25 percent or 50 percent of the cleanup cost. If the site has an Activity and Use Limitation, or AUL — typically a use restriction placed on title as part of the cleanup process — then a 25 percent credit would apply; if no AUL, then eligibility increases to 50 percent. Without this tax credit, many contaminated properties would remain a public health risk and there would be no incentive to clean up and return these sites to productive use.

The credits have provided critical additional funding for community development corporations, or CDCs, and other community-based organizations. And a change to the law in 2006 has helped nonprofit organizations, which were previously not able to use all of their credits, to sell or transfer the credits to others. In recent years, the state Department of Revenue has distributed between $28 million and $61 million annually in Brownfields tax credits, benefitting between 40 and 80 development projects each year.

The Brownfields Act was created through a unique collaboration of Massachusetts policymakers and a truly diverse set of stakeholders. Developers, town officials, environmentalists, business association representatives, scientists and many others spent hundreds of hours negotiating the details of this landmark legislation.

For Massachusetts residents and businesses, the benefits have been significant. By cleaning up these sites, public health conditions improved, local communities were revitalized, housing was built in vacant areas, new jobs were created, and municipal real estate tax revenue grew. For developers and their partners in engineering, construction and architecture, redeveloping a former industrial site no longer posed a financial or legal death sentence.

For a very modest investment by the commonwealth, billions of dollars of investments have been made throughout the state, benefitting its citizens and municipalities. We commend the Legislature’s work this session to provide for a five-year extension of the Brownfields tax credit in the Housing Bond bill, signed by Gov. Baker on May 31. Twenty years later, the Brownfields Act’s approach to economic development and public health policy continues to be bipartisan, beneficial, bold and, most important, very successful.