Tag Archives: workforce housing

Housing Costs May Cost Us Our Young Talent

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This post originally appeared in the Boston Business Journal on November 20, 2015.

ApartmentsIn the coming years, the Massachusetts economy may be at serious risk. The Commonwealth’s most valuable resource is its educated, skilled talent. Maintaining that resource is essential for continued economic growth. However, there is a threat which is making that goal harder and harder to achieve. Massachusetts has one of the highest housing costs in the nation – a significant barrier for talent recruitment and retention. Without an adequate supply of workforce housing, Massachusetts may soon lose that talent to other, more affordable, markets.

The UMass Donahue Institute’s Population Estimates Program concluded that the state’s population will increase by nearly 300,000 over a 20-year period. Good news, but the population of Massachusetts grew only by 3.1 percent between 2000 and 2010, while the U.S. population increased by 9.7 percent. Of concern, the study also projects an increasingly older population for the state.

Though a good portion of Massachusetts’ growth is driven by a net natural increase (number of births greater than deaths), a larger share of the growth is attributed to net immigration. Looking more closely, there is a net domestic outflow of residents (more people moved out of Massachusetts than into it from other parts of the U.S.), offset by a large number of international immigrants.

This is occurring during a boom time for the Greater Boston region, while the rest of the country, with a few exceptions, is still working its way out of the recession. Another way of looking at it is that, for the past few years, there have not been many job opportunities attracting our younger workers away from the state.

It was not that long ago that most of the country was experiencing stronger job growth than Massachusetts. As documented in a 2003 University of Massachusetts/MassINC report, Mass. Migration, over 200,000 more domestic residents moved out of Massachusetts than moved into the state between 1990 and 2002. And then, between 2002 and 2004, that imbalance became worse.

Fortunately, at that time, foreign immigrants helped to offset these population losses, but they frequently arrived with lower levels of education and skills than those who were leaving. Those departing tended to be younger, better educated, and more likely to be employed in a knowledge-intensive industry.

These trends will have substantial workforce and business implications and should be a call to action. The costs of both rental and for sale housing have been accelerating, reaching record highs. More and more young individuals and families are being priced out of the market. In some cases, the problem is restrictive zoning, other municipalities are shunning any housing that increases the school population, and in some markets, the cost of construction makes workforce housing uneconomical.

The solutions may be difficult, political, and costly, but without action at the state and local levels, the future of the Massachusetts economy is at risk.

Workforce Housing, Not Zoning Bills, Key to Economic Growth

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Earlier this week I testified before the Legislature’s Joint Committee on Municipalities & Regional Government on two “zoning reform” bills, the Land Use Partnership Act (LUPA) and the Comprehensive Land Use Reform Partnership Act (CLURPA).  Supporters of both bills claim that the legislation would encourage real estate development in Massachusetts.  Representatives from the real estate industry, however, disagree.  NAIOP believes that these bills contain many problematic elements which could hinder economic development at a time when it is needed most.

The bills make a number of changes to Chapter 40A; some would apply statewide and other changes would apply only in “opt-in” communities.  The legislation does have some positive aspects: zoning protections to special permits and site plan approvals, and limiting subdivision rules and regulations to subjects not already covered elsewhere by local ordinance or bylaw (e.g., stormwater management, off-site traffic impacts.)  However, other parts of the bill would reduce existing predictability and add financial risks for new business growth.

The most concerning aspect of the legislation would significantly alter the zoning freeze that exists under current subdivision law.  It would limit the zoning freeze to a specific proposed development plan, rather than just the land shown on a plan.  As a result, the freeze would be lost with any change in project use and/or density.  This would be a serious problem for commercial real estate developers who would be unable to respond to a changing market. 

Commercial projects require large initial investments in land, site work, and infrastructure for developments that are generally phased and take many years to complete. Without the protections of a subdivision zoning freeze that allows for flexibility in project uses as the markets change, financing would be very difficult to achieve and fewer projects would move forward. 

To truly encourage economic growth, the focus should instead be on creating workforce housing.  While housing costs have dropped recently, a lack of single family, smaller scale, higher density homes fuels the exodus of 23-40 year olds – a key population demographic for economic growth.  This is an issue of great concern to business leaders who struggle to attract the best talent when competing with other states that provide such housing opportunities.

If the Legislature is intent on addressing the Commonwealth’s competitiveness and its housing, it needs to take a different approach.  We urge the Legislature to work with the Patrick Administration, municipalities, and the business community to create a new program establishing zoning districts that permit the construction of a modest number of affordable, small, single-family homes.  The future of our workforce depends on it.