|Permit Tolling Bill Filed Today |
Today Governor Baker filed HD4974, An Act to Further Address Challenges Faced by Municipalities, School Districts, and State Authorities Resulting from COVID-19. While the bill addresses several topics, Section 9 of the bill addresses the tolling of permits. The language included in the bill is the result of a collaborative effort and many hours of work during the past few days between NAIOP Massachusetts, the Mass Municipal Association and the Home Builders & Remodelers Association of MA. Specifically, the language provides the following:
– No permit is automatically granted, approved, or denied because a local permitting authority does not act within a time period required by law.
– Any permit that is currently valid will not lapse or expire during the state of emergency, and suspends any time limitation on such permits during the emergency.
– Allows applications for permits to be filed electronically, so as to eliminate the need for in-person filing.
– Suspends any requirement that a hearing on a permit application be held within a certain period of time until 45 days after the end of the state of emergency.
These changes will provide necessary relief to cities and towns that, due to disruptions caused by the state of emergency, are unable to timely process and hear permitting applications. At the same time, these changes balance the needs of residents and developers by ensuring that their current permits are not impaired by the emergency. We are pushing for quick passage of this bill and we are incredibly grateful to a phenomenal team of NAIOP members who worked tirelessly to perfect this language and reach a compromise. We will keep you posted as this bill advances. In addition, we are pursuing numerous other forms of legislative and regulatory relief. Please contact us if you have any questions or ideas.
Non-Essential vs. Essential Businesses: FAQ Now Available
Yesterday Governor Charlie Baker issued an emergency order requiring all businesses and organizations that do not provide “COVID-19 Essential Services” to close their physical workplaces and facilities to workers, customers and the public as of Tuesday, March 24th at noon until Tuesday, April 7th at noon. These businesses are encouraged to continue operations remotely. NAIOP has been inundated with requests from professionals who are not specifically listed. The Administration has launched an FAQ page to address some of the most commonly asked questions.
In addition, if the function of your business is not listed as essential, but you believe that it is essential or it is an entity providing essential services or functions, you may request designation as an essential business. Requests by businesses to be designated an essential function should only be made if they are NOT covered by the guidance. To request designation as an essential business, please click here Any questions can be directed to email@example.com
Construction Moratoriums Continue & Conflict with Executive Order?
Last night, Somerville ordered all construction projects to cease general operations, establish services necessary for in-use buildings to function, and make their sites safe to the general public by Friday, March 27. Somerville now joins Boston, Cambridge, and numerous other cities and towns that have put construction moratoriums in place.
We have received numerous requests for clarification on how the Essential Services list, which lists as essential: “Construction Workers who support the construction, operation, inspection, and maintenance of construction sites and construction projects (including housing construction)” and “Workers to ensure continuity of building functions, including local and state inspectors and administrative support of inspection services who are responsible for the inspection of elevators, escalators, lifts, buildings, plumbing and gas fitting, electrical work, and other safety related professional work”should be interpreted in communities where there is a construction moratorium.
As of March 23, Mayor Walsh and the BPDA made it clear that they do not plan to lift the moratorium. However, given the sheer volume of questions on this issue and the confusion that exists, we have reached out to the Baker-Polito Administration for guidance on this issue.
E-Notary Legislation Filed
Massachusetts is one of only a handful of states that does not allow for e-notarization. On Friday, SD2882, An Act Relative to Remote Notarization During COVID-19 State of Emergency was filed to allow for e-notarization until 3 days after the emergency declaration is lifted. The Real Estate Bar Association has been the lead on this issue, but NAIOP is supportive of the legislation and will be advocating for its passage.
Here are my last predictions as CEO of NAIOP (but not my last predictions)!
- Wayfair will double their occupancy in Boston.
- Boston and Cambridge Office rental rates will rise to record levels for new space surpassing $120 psf.
- Apartment rental rates will be flat.
- WeWork will make a move to the suburbs.
- Electric bikes & scooters will be allowed in Boston (and then regretted).
- Bitcoin value will fall, other Cryptocurrencies will rise.
- Foreign investment in commercial real estate will drop.
- The stock market will hit an all time low and an all time high.
- The Fed will raise rates ¼% only once during the next year.
- Tiger Woods will win a major.
Below were my predictions for 2018. Not too bad!
1. Amazon will pass on Boston for a campus, but leave us with a great consolation prize. [Yes and 1mm sq. ft coming to the Seaport]
2. No Turnpike air rights project will start construction (ditto for 2019). [None, so far]
3. Fed. interest rates will be up 75 basis points by end of year. [50 basis points]
4. In Boston, more condos will be permitted than rental apartments (other than the neighborhoods). [Rental approved by BPDA: 33%/Condo: 67%]
5. An office or lab lease will hit $100 per square foot in Cambridge. [Boeing office, 314 Main St.: $106.63 Net effective rent]
6. Construction costs, on average, will be up 7%. [ to date, 6-7%]
7. More than one million SF of commercial space will commence on spec. [Office: Boston & Cambridge: 1,008,000 SF; Lab: Boston & Cambridge: 1,226,000 SF]
8. The 128 office market will show more transactions (both numbers and SF) than the downtown market. [Downtown wins]
9. Foreign buyers will begin to acquire major CRE property outside of Boston/Cambridge. [No]
10. And, yes, the Patriots will do it again. [Almost!]
The Clean Air Act was created to respond to the ever-increasing air pollution that has come from industrial expansion and a reliance on fossil fuels for energy and transportation. Automobiles are a major source of air pollution (e.g. hydrocarbons, nitrogen oxides and carbon monoxide). It is estimated that road traffic accounts for about 40 percent of the pollution that contributes to ground-level ozone (the main ingredient in smog).
Single occupancy vehicles have long dominated the roadways, especially for commuters. In an effort to reduce pollution, states, like Massachusetts, have adopted Rideshare Programs. Ridesharing is the sharing of vehicles by passengers to reduce vehicle trips, traffic congestion and automobile emissions. Ridesharing (carpooling, vanpooling, public transport), as well as bicycle commuting and walking, are all goals of these programs.
Locally, the idea has been for Massachusetts Department of Environmental Protection (MassDEP) to work with large employers (with more than 1,000 employees) to promote commuting options. The program depends on corporate surveys of worker commuter patterns, providing a menu of commuting options, offering incentives, and documenting the resulting annual changes in patterns, hopefully to successfully meet a specific performance goal of reducing by 25 percent the number of times commuters drive alone to work.
Unfortunately, for various reasons, these programs have had limited success, but continue to burden the employer with annual compliance costs. Part of the problem has always been the difficulty of organizing car-pooling and the uncertainties due to the drivers’ and passengers’ daily schedules.
We are all getting accustomed to technology searching for logistical problems to solve. The ridesharing conundrum is one of those problems and “real-time ridesharing” are the solutions beginning to be provided by Transportation Network Companies, such as Lyft, Uber and Sidecar. These companies, with their mobile apps, arrange one-time rides on an on-demand basis.
Both Lyft (Lyft Line) and Uber have now introduced a carpooling service in Boston. Passengers along a route get in the car at a price cheaper than the ride-for-hire alternative. The trip has to maintain its original route as it picks up other customers, who have to be ready immediately to get in the car when it arrives for them.
Although this service is currently limited to the Boston/Cambridge market, there is no question that an expansion of this service into the suburban market is inevitable.
It is also not very difficult to foresee an app that allows single occupancy drivers to easily connect with fellow commuters heading in the same direction, on a ride by ride basis. With no long-term commitments and many scheduling alternatives available, it seems like an easy fix. Yeah, we’ve got an app for that!
The real estate industry is all about people. Whether you’re a developer working to find an investor or a leasing agent trying to reach potential tenants during lease-up, real estate professionals are all looking to make the personal connections that are vital to success in the industry.
Social media in an incredible tool for reaching the people who drive the real estate industry. NAIOP Massachusetts, in partnership with communications firm Solomon McCown & Company, surveyed more than 100 real estate professionals in June 2015 on how they use social media for their business. How do architects, construction professionals, brokers, developers and professionals in all aspects of the business use digital communication tools? Here are the key takeaways from our survey.
LinkedIn is the most popular social media platform for real estate professionals (Tweet this!), with 52.3 percent of those polled saying they use it. Facebook was a distant second place, with 20 percent of professionals saying they use the world’s largest social media network.
Only 6.5 percent of those surveyed said they don’t use social media for personal or professional use. (Tweet this!) It’s clear that professionals in all areas of the industry are active on social channels.
81 percent of professionals in the real estate industry access social media networks on mobile devices. (Tweet this!)
Social media isn’t just used by young professionals. (Tweet this!) While nearly 81 percent of 21-30 year olds in our survey say they use social media both personally and professionally, 66.7 percent of 61-70 year olds also use digital communication tools.
100 percent of real estate brokers surveyed believe social media helps them to do their jobs. (Tweet this!) The only differentiation is to what degree social media is helpful: 61.9 percent of brokers consider social media to be very helpful, while 38.1% consider it somewhat helpful.
89 percent of brokers surveyed have found new leads through social media. (Tweet this!) No wonder 100 percent of brokers say that social media helps them in their professional lives!
One-third of real estate owners say they only use social media a few times a year. (Tweet this!) A scant 22 percent of owners say they understand social media enough to do it in-house at their companies. (What a missed opportunity!)
How do professionals measure success? In our poll, 65 percent of respondents said that engagement with their target audience was the most important goal for their social media campaign. Sourcing new leads was the primary indicator of success for 26 percent of those surveyed.
Take a deep dive into the data unearthed by the NAIOP/Solomon McCown survey in the infographic below.
It is that time of year when we try to look forward and plan accordingly. For the commercial real estate industry coming off a rather good year, we have to wonder if we are at the top or still growing?
Here are my predictions for the coming year:
1. Foreign buyers will outspend domestic investors for Boston and Cambridge properties and will make a dent in some communities along 128 (e.g. Burlington and Waltham). They will also be a major buyer of Boston condos.
2. Boston properties will be seeing a record number of office properties changing hands with some of those properties having already transferred ownership within the last 3 years.
3. No surprise that office rental rates in Boston and the surrounding areas will be increasing. I predict a minimum of 10% over this year. Apartment rents will continue to rise with some resistance in the newest buildings.
4. The Wynn Casino construction project will not be starting in 2015.
5. There will be one speculative office building announced in Cambridge, that’s it.
6. Design firms will have their busiest year renovating spaces and providing greater efficiency for existing tenants.
7. Construction costs are going to be up substantially, especially in downtown Boston, with greater difficulties getting multiple competitive subcontractor bids.
8. Boston will experience a major hurricane this coming Fall with substantial flooding due to storm surge.
9. The Federal Reserve will finally raise rates.
10. Boston will be selected by the US Olympic Committee to represent the US bid for the Summer Olympics.
The Boston Globe recently reported that “the state’s tech sector is growing fast, but a shortage of qualified workers is preventing Massachusetts from becoming the capital of the nation’s innovation economy”, according to the 2014 State of Technology Report released by the Mass Technology Leadership Council. “Creating the jobs isn’t the hard part – filling them is the hard part,” said Tom Hopcroft, chief executive of MassTLC. “We can’t find enough people with the skills to fill all of these tech jobs.”
These are not the only types of jobs that remain open according to this Boston Globe graphic, which shows that it is not just the high end tech jobs that are having trouble finding workers.
So, what is worse – not having the jobs, or not being able to provide the workers for those companies that are expanding? It should be the former. Trying to create new jobs is not only difficult, but there is actually no proven way to do it. If what we have is a gap in training, or the proper transportation to access trained workers, we should be able to remedy that.
Local and state government should be partnering with local community colleges, vocational schools, and universities to work directly with those businesses that are fortunate enough to be growing and hiring. If we don’t fix this imbalance expeditiously, we may have bigger problems. Companies will begin expanding elsewhere and, then not having any local jobs to fill would be a lot worse.
I was in Vermont when Irene hit and the devastation that resulted is hard to fully comprehend. We have certainly had our share of storms and Nor’easters, but it wasn’t the high winds that were the problem – it was the flooding of most every river in the state.
Rivers became lakes, overflowing across roadways, through homes and businesses, hitting owners – few of them with flood insurance. Flooding is not a normal event here – they call this a “500 year” storm!
Bridges were washed away and roads disappeared. In our town of Waitsfield, the river rose almost 20 feet and undermined the historic covered bridge. A key historic building that lost its foundation may be condemned. The flood ran through the local stores, leaving behind 4-6 inches of sludge and an unhealthy film on everything inside.
But on Monday morning, under a bright sun, hundreds of volunteers in Waitsfield and Warren lined up to help. (And I know that this was the case throughout the state.) Fulltime residents and vacationers joined together to help by emptying homes and businesses of endless buckets of sludge and all sorts of debris. People worked to scrape away the muck from the streets. This work has continued and a headquarters has been established in the center of town for volunteers to find out where they are needed next.
It is frustrating to see so many suffer through a natural disaster like this, but it is also inspirational to see the unrestrained community response of neighbors, friends, and visitors. I don’t know if all of the businesses will be able to recover from this setback, but for those that do, it would not have been possible without the help they received from these generous volunteers.