Mass Municipal Association and Real Estate Community Join Together to Support Housing Choice Legislation to Create Much-Needed Housing Across the Commonwealth

Today the following statement was issued in support of An Act to Promote Housing Choices (H.4290):

The Greater Boston Real Estate Board, the Home Builders and Remodelers Association of Massachusetts, the Massachusetts Association of Realtors, NAIOP—The Commercial Real Estate Development Association, and the Massachusetts Municipal Association, join together to express our strong support for H. 4290, An Act to promote housing choices. In its current form, this important bill is a unique opportunity to increase the much-needed supply of housing in Massachusetts.

As reported favorably by the Joint Committee on Housing, H. 4290 represents an unprecedented consensus by the major stakeholders to advance housing development. This narrowly tailored bill addresses the state’s need for housing while respecting the important role municipalities play in determining whether new housing is built. It does so by eliminating one barrier to housing production – the need for a supermajority vote of Town Meeting or a city council to approve zoning changes for housing and smart growth planning.

To encourage cities and towns to adopt zoning that supports sustainable housing production, the Department of Housing and Community Development created the Housing Choice Initiative. That program rewards communities that produce new housing and adopt best practices to promote smart growth with grants and technical assistance. Passage of H. 4290 will make it easier for communities to achieve Housing Choice designation.

Unlike another legislative proposal now before House Committee on Ways & Means (H. 4397), which would rewrite the Zoning Act in ways that are complicated, controversial, and would hinder the production of housing, H. 4290 contains no mandates or other provisions that are opposed by all of our organizations.

According to the UMass Donahue Institute, “the challenge for Massachusetts going forward will be to address the housing, transportation, and infrastructure constraints that make it more difficult for the workers who will be needed to fill these positions to relocate to the state and meet the needs of growing employers. While this challenge is not new, the price of inaction is high and rising.” Massachusetts is one of the most expensive states in the country in terms of housing affordability. It is critical that we do not complicate or increase housing costs by enacting legislation that would further worsen the existing problem.

Together with the recently enacted Housing Bond Bill, H. 4290 can make a significant impact on the Commonwealth’s historic shortage of housing. We respectfully urge the legislature to pass this important bill before the end of the formal session.

 

NAIOP 30th Annual Charitable Golf Tournament Brings Total Raised for Heading Home to Over $3 Million

Elisif_20180614_6535

On June 14, NAIOP held its 30th Anniversary Charitable Golf Tournament to benefit Heading Home, an organization that provides hundreds of Greater Boston families with housing and services to thrive in the long run. After a fun-filled day of golf, refreshments, and networking at The International in Bolton, MA we are thrilled to report that we have surpassed $3,000,000 in donations to Heading Home. This year’s proceeds will benefit the Heading Home Economic Mobility Center.

Thank you volunteers, sponsors and golfers for your support!

Special thanks to:

2018 NAIOP Golf Committee Co-Chairs: Shawn Hurley of Marcus Partners and Phil Dorman of Oxford Properties

Golf Steering Committee: Vicki Keenan and Matthew Siciliano of CBRE/New England, and John Myers of Redgate

&

Platinum Sponsors: Marcus Partners, Oxford Properties

Gold Sponsors: CBRE New England, National Development, Charles River Realty Investors, New England Development, Newmark Knight Frank, Redgate

Pin Flag Sponsors: Callahan Construction Managers and Walker & Dunlop

Silver Sponsors: Boston Properties and Turner

Hat Sponsor: NB Development Group

Entertainment Sponsor: Keller Augusta

Additional Sponsors:

Aerotek
AHA Consulting Engineers
Alexandria Real Estate Equities
Allen & Major Associates
Atlantic Management Corp.
Avison Young
Bank of America Merrill Lynch
Bard, Rao + Athanas
Consulting Engineers
BioMed Realty
Boston Financial Management
Boston Global Investors
Boston Realty Advisors
Bowdoin Construction Corp.
Chapman Construction/Design
Citizens Commercial Banking
Clarion Partners
Colliers International
Columbia Construction Co.
Commodore Builders
CUBE 3 Studio
DivcoWest
Dyer Brown Architects
Eastdil Secured
Eastern Bank
First American Title
Fort Point Project Management
Gensler
Gilbane Building Company
Haley & Aldrich
Hines
J.C. Cannistraro
J. Calnan & Associates
JLL
Jumbo Capital Management
Margulies Perruzzi Architects
Maugel Architects
McCall & Almy
McNamara Salvia
MIT Investment Management
Company
M&T Bank
NOREL Service Company
Office Resources Inc.
Perkins + Will
PES Associates
Red Thread
Related Beal
R.J. Kelly Co., Inc.
Rockland Trust Company
R.W. Holmes Realty Company
Samuels & Associates
Sanborn, Head & Associates
Sasaki
Skanska
SourceOne, Incorporated
Stewart Title Guaranty Co.
Synergy Investments
Taurus Investment Holdings
TD Bank
Timberline Construction Corp.
Tsoi Kobus Design
Unispace
View Dynamic Glass
VPNE Parking Solutions
Walker Consultants
WS Development

We will be back hope to see you again in 2019 for the 31st Annual Golf Tournament on June 20! For information, contact Debbie Osheroff at 781-453-6900 x3.

 

Exploring Greater Boston with NAIOP

This post originally appeared on the Solomon McCown & Company blog. It was authored by Michelle Cassidy.

Elisif_20180606_5622You can see NAIOP’s bus tour photos online.

We recently had the pleasure of attending NAIOP’s annual, highly anticipated event: The Bus Tour. This year’s theme – “Then, Now, Next” – offered a glimpse into some of Boston’s most transformative developments in the city’s evolving and historically booming neighborhoods.

We journeyed from the Financial / Central Business District to the Seaport to South Boston / Dorchester. Then, we drove through the Back Bay / South End, before reaching the Fenway followed by our final stop in Allston / Brighton.

Each neighborhood provided a look into Boston’s past while highlighting its promising future. Many buildings that were originally constructed for industrial uses are being repositioned for today’s needs. Here’s a rundown of key takeaways:

Financial / CBD – While highlighting the beautiful renovation of One Post Office Square’s lobby, speakers emphasized that tenants are now moving to better brand themselves and attract / retain talent, whereas historically they were driven by cost. The lobby renovation enables substantial natural light to enter the building and complements the streetscape. Anchor Lines Partners / JLL are renovating the building’s other interiors – we love their flexible fitness floor concept which will provide tenants with a healthy lifestyle at their fingertips.

Eastern Seaport – Given Kendall Square’s limited space, there is a lot of potential for new lab and R & D space in the Seaport, particularly the Drydock area and Raymond L. Flynn Marine Park. Many industrial buildings such as the Innovation and Design Building and 451 D St. are being repositioned for innovative tech or life science companies. The successful mixed-use development along Seaport Boulevard is continuing into this area too. Parcel K, developed by Lincoln Property Co. and designed by Arrowstreet, will bring additional residences, a Hyatt Place hotel and 20,000 square feet of retail and restaurant space. The new Omni hotel, developed by Davis Companies, will also bring more keys, collaborative workspaces and luxury spaces such as a pool deck with views of the Harbor.

South Boston – Redgate and HILCO’s development of The Edison Power Plant is improving the connectivity between the Seaport and South Boston. The 2.1 million-square-foot development includes seven new buildings that consists of more than 1,000 apartments and condos, a 150-room hotel, 339,000 square feet of office space and 68,000 square feet of retail. Investors are taking note of visionary projects such as this and pursuing unique opportunities here; for example, Akelius, the largest listed company in Sweden, recently purchased the Carson Tower Apartments near Carson Beach.

Dorchester – Nordblom is repositioning the former Boston Globe headquarters into ‘The Beat’ (The Boston Exchange for Accelerated Technology). The team is transforming the space into a modern gem with high ceilings, two roof decks, a food hall and a possible brew pub. The space will have the ability to suit various tenants including flex tech, autonomous vehicles and robotics.

The Fenway – Given the booming Longwood Medical area, there is high demand for housing in this area, and Skanska’s recently delivered The Harlo, a luxury residential building with fabulous amenities and ground-floor retail speaks to that demand. There’s also commercial office development – the tour stopped at 401 Park, commonly known as Landmark Center. The building, which was originally a Sears’ manufacturing plant, is being repositioned by Samuels & Associates into an impressive mixed-use development with a million square feet of lab and office space, a coveted ‘Time Out’ food hall, and a 1.1-acre public park with retail and activities.

Allston/Brighton – Our last stop was at Boston Landing, a 1.9 million square foot mixed-use development by HYM and NB Development Group. We toured the luxury apartment building, Lantera, which includes impressive amenity spaces including a pool and roof deck. The interiors, designed and decorated by Elkus Manfredi Architects, are full of beautiful, vibrant colors and are definitely worth checking out. The development is also proximate to public transit. Now that the Boston Landing train station is completed, it’s easy to get to and from the heart of Boston to this area. The station, constructed by Skanska, is built to Envision® Silver verification. To date, this is the highest level awarded in Greater Boston and the first transit project in New England to achieve Envision.

Connectivity continues to improve throughout Greater Boston thanks to the transformative developments and renovations we visited on the Bus Tour. We’re excited for all these projects to deliver and to bring additional vitality to the neighborhoods in which they are located.

Brownfields Tax Credit Extension Signed into Law

On May 31, Governor Baker signed the Housing Bond Bill, An Act Financing the Production and Preservation of Housing for Low and Moderate Income Residents (H. 4536), which authorizes $1.8 million in new capital spending for the production and preservation of affordable housing. The bill included one of NAIOP’s top legislative priorities – a 5-year extension of the Brownfields Tax Credit.

TWEETCaptureThe Brownfields Tax Credit, which was set to expire in August without this important extension,  encourages new “innocent” owners to clean up contamination.  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 to the Department of Revenue for a credit equal to either 25% or 50% of the cleanup cost. If the site has an Activity and Use Limitation (AUL), then 25% would apply; if no AUL, then eligibility increases to 50%. Without this tax credit, first created in 1998, contaminated properties would remain a public health risk and there would be no incentive to clean up and redevelop these sites.

In addition to the Brownfields Tax Credit Extension, the bill does the following, among other things:

  • State Low-Income Housing Tax Credit Extension. Extends the state’s ability to commit $20 million per year in tax credits to affordable housing projects until 2025 and authorizes an additional $5 million per year in tax credits specifically to support the preservation of existing affordable housing.
  • Housing Development Incentive Program Tax Credit. Extends the states ability to commit $10 million per year in tax credits to market-rate housing projects in Gateway Cities until 2024.

The brownfields tax credit extension provisions (Sections 5, 6 and 7 of the Housing Bond Bill) were first filed at the start of the 2017-18 legislative session, at NAIOP’s request, as Senate Bill 1610 by Senator Michael Rodrigues.

NAIOP is grateful to Senator Rodrigues for his leadership on this issue and applauds the housing bond bill conference committee members (Reps. Kevin Honan, Joseph McGonagle, Bradford Hill and Sens. Joseph Boncore, John Keenan, Patrick O’Connor) for championing the brownfields tax credit, which increases housing, creates new employment, and enhances local and state tax revenues by restoring blighted properties to productive use.

While another NAIOP-supported provision that increased the tax credit to 50% for  projects with an Activity & Use Limitation and twenty percent of the housing set aside for those making 120% or less of Area Median Income had been included in the Senate version of the bill, that provision was not included in the final bill.

Thank you to NAIOP members that advocated on behalf of this key policy priority for the commercial real estate industry and the Commonwealth.

Prepare to be automated out of a job

robotIsn’t there a civic responsibility to plan for massive dislocation?

What should we do if we knew that, in the near future, a large sector of our country’s workers, currently employed with good-paying jobs, would be put out of work by new technologies? Would we ban the new technology to save those jobs? Or, do the scientific breakthroughs and related increases in growth and productivity outweigh the job-loss negatives?

These questions are not theoretical. Thomas Friedman explores these issues and others in his 2016 book, Thank You for Being Late: An Optimist’s Guide to Thriving in the Age of Accelerations. And a December 2015 study by the McKinsey Global Institute found that the US economy is only reaching 18 percent of its “digital potential.”

The McKinsey report projects that “about half the activities people are paid almost $15 trillion in wages to do in the global economy have the potential to be automated by adapting currently demonstrated technology. While less than 5 percent of all occupations can be currently automated, about 60 percent have at least 30 percent of constituent activities that could be automated. ”

Going forward, McKinsey projects, more occupations will change than will be eliminated through automation. Even a 4-year-old study done at the University of Oxford’s Martin School “estimates that 47 percent of jobs in the US are ‘at risk’ of being automated in the next 20 years.”

As the studies illustrate, it is very clear that technological advances are now coming faster and faster and starting to supplant even white collar skills.

Take, for example, the potential impact of autonomous vehicles. In the US, there are 3.5 million professional truck drivers, in addition to all of the drivers for mass transit, local deliveries, taxis, etc. One out of every 15 workers in the country is employed or associated with the transportation industry. Clearly, the impact of this new technology could be devastating to a large part of the nation’s workforce and their families.

If these disruptive technologies keep probing for efficiencies in our economic system and accelerate the obsolescence of certain classes of workers, isn’t there a civic responsibility to prepare for that inevitability? Living in a world reminiscent of Ayn Rand’s philosophy of positivism, where it is the survival of the fittest and “tough luck” to anyone else, is not going to sit well with the millions of the soon-to-be-unemployed Americans.

“When the rate of change eventually exceeds the ability to adapt, you get dislocation – when the whole environment is being altered so quickly that everyone starts to feel they can’t keep up,” Friedman writes in his book. “There is a mismatch between the change in the pace of change and our ability to develop the learning system, training systems, management systems, social safety nets, and government regulations that would enable citizens to get the most out of these accelerations and cushion their worst impacts. This mismatch is at the center of much of the turmoil roiling politics and society today.”

Bill Galston from The Brookings Institution suggests that many of the displaced workers have not been able to find new jobs that pay as much as the previous ones, with wages dropping an average of 40 percent when they do find a new job.

Eric Teller, CEO of Google X Research stated, “We certainly don’t want to slow down technological progress or abandon regulation. The only adequate response is that we try to increase our society’s ability to adapt.” For workers going forward, the only way to retain a lifelong working capacity is to engage in lifelong learning.

Governments (federal and state) are going to have to do better in two areas. First, they will have to provide a much improved “safety net” for the unemployed.  There will be more of the unemployed and these workers will be out of work for a much longer period of time. It will certainly take longer to find a comparable job that meets the worker’s skills (with fewer of these jobs available). And it will take longer for the worker to get additional training to qualify for those jobs that are available.

I suggest that we need a new system of wage insurance to minimize the negative effects of extended unemployment. The system would provide workers going through a training program with supplemental wages over what they would be currently receiving to give them time to be retrained for a higher-paying job.

Secondly, the US will need to adapt its institutions and training pathways to help workers acquire new skills.  The nation’s educational system and job training programs have not been sufficiently agile to respond to the needs of those businesses that are expanding and hiring. Even a college degree is not sufficient to guarantee a new job in the new economy. New online training modules that can be adapted and adjusted in short order will be needed to fine tune a prospect’s skill set to match a company’s requirements.

According to Friedman, the new workplace employers will value workers who can demonstrate the needed abilities for the job. These employers will need to provide multiple avenues for lifelong learning that are priced right, available on demand, and seamlessly responsive to the changing needs of the workplace. They also need to be fueled by a regulatory and tax policy to assure their widespread adoption.

What is very clear is that the status quo is not an option. Government will soon have to acknowledge that one of the greatest threats to our society will be the wasting away of our human resources. If there is no hope for the future (a job, a family, a home) for everyone in America, then the golden age of America, as a land of opportunity for all, will be a thing of the past.

A Housing Plan That Works

The business community is generally a bit skeptical when it comes to grand plans to cure critical deficiencies in the marketplace. One of the most pressing problems for Boston, and many other major cities around the country, is the lack of affordable housing and the inflationary pressures on existing housing stock. In 2014, Mayor Marty Walsh commissioned a new housing plan to confront the city’s problem of a population growth outpacing its production of housing.

The plan that resulted set a target of 53,000 new housing units to help rebalance the market and decrease the pressure on rents and housing prices in the city’s older (and more affordable) housing stock.

Through a cross department plan allowing for streamlined and expedited permitting, expanding the offerings of city-owned real estate, promoting innovation in housing production, and adding significant resources to housing production, the city has worked collaboratively with the development community to achieve real, measurable success.

Through December 2016, nearly 20,000 units were either completed or in construction. Over 21,000 units are currently in the permitting process. Housing unit completions have finally outpaced the city’s population growth.

Has the housing plan worked? For the first time in many years, rents in older units decreased or stabilized in the neighborhoods with the most new development in the past 5 years. The sharpest decreases were with studios and one bedrooms, with two bedroom units seeing modest decreases and three bedrooms rents stabilizing.

It is a serious challenge to develop a program to create new affordable, work-force housing without deep subsidies. However, we can now see that producing new market rate units can actually dampen the inflationary trends for the existing older housing stock. As long as the city can continue to work closely with the development community to keep the housing pipeline flowing, we may be able to keep Boston accessible to everyone.

Immigration is a major driver of our economy

immigrationOn Friday, President Trump signed an executive order on immigration and refugees. It establishes federal travel restrictions stopping the issuance of visas to Syrian nationals, suspends all immigration from seven Muslim-majority Middle Eastern countries for 90 days, and extending the ban to citizens of those countries who hold U.S. visas or green cards.

There has been limited impact of this Executive Order on the real estate industry in Massachusetts. That said, besides the obvious humanitarian crisis that this only exacerbates, our region is dependent on, and benefits greatly from, the diverse immigration into our schools and industries. Our domestic population has never been able to fully meet the demands of our growing businesses, with almost every economic boom fueled by immigration.

Historically, refugees have contributed greatly to our Commonwealth. They are an integral part of our engine of innovation, working for our local companies and, in many cases, starting their own businesses, hiring many of our young, skilled resident talent.

We encourage the Trump administration to reconsider this abrupt change in policy.