It was a sunny October morning in 2019 when then-City Councilor Michelle Wu proposed abolishing the Boston Planning & Development Agency.
It was hardly a new idea. Boston politicians — especially aspiring mayors — had for years called for ridding the city of its powerful real estate arm. But none before had issued a 76-page white paper on the topic. Wu was serious. And when she won the mayor’s race just over two years later, she soon set about doing what she’d pitched, filing legislation to disband the BPDA that now awaits a vote on Beacon Hill.
Of course, the world — and particularly the world of urban real estate development — has changed quite a bit since that bright October morning.
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Downtown office vacancy in Boston is hitting highs unseen in decades, and office values are projected to drop for the first time in years. Three prominent banks have collapsed since March. Spiking interest rates and materials costs have driven up the price to build. Boston’s decades-long run of population growth has ended, at least for now. Even the lab boom has slowed.
All that upheaval creates uncertainty, which developers — and the deep-pocketed insurers, pension funds, and investors who fund their projects — loathe. And that has some wondering if now is really the best time to add even more uncertainty by overhauling the agency charged with planning, reviewing, and approving development in Boston.
“It’s not too early to question,” said Sam Tyler, the former and longtime head of the Boston Municipal Research Bureau, a business-backed city budget watchdog. “Is the direction she’s heading really in the best interest of the city at this particular point in time, when there is so much uncertainty, and without having first tried to make her objectives work within the structure of the BPDA?”
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Wu contends the structural change is needed, and needed now. She has long called for a more predictable development process, emphasizing planning and overhauling zoning codes — not just project-by-project development review — as a key part of the BPDA’s dual planning and development mission. And the agency under her tenure has at last begun incorporating neighborhood plans into the city’s zoning code.
At a BPDA all-staff meeting at Faneuil Hall in February, Wu discussed how centralizing planning and development work would perhaps be the defining legacy of her administration, according to a person in attendance at the meeting.
Wu again emphasized her sense of urgency in an interview with The Boston Globe.
“The way that we have been making decisions around how we grow as a city have not been focused on the long-term health and sustainability of our communities and our economy,” Wu said. “Especially in this moment of economic uncertainty, there’s all the more responsibility for us to focus on the long term, and setting the foundation that will make this sustainable.”
Wu spent much of her first State of the City speech outlining plans to transform the BPDA, proposing a city planning and design department and establishing an advisory council that would bring together all city departments with planning functions. In January, she petitioned the state to dissolve the legal structures behind the BPDA — the Boston Redevelopment Authority and the Economic Development Industrial Corp. — and create a newly formed BPDA, many of whose staffers would eventually fold into that new city department.
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How and when that transition takes place is unclear. Wu contends the structural change is a matter of “incredible urgency,” particularly as the cost of housing pushes many families out of Boston.
The BPDA is “siloed off” from the governance and budgeting process the City Council oversees for other city departments, she said, and its $89.5 million budget is largely funded by rental income on property the agency owns — separate from other city property such as parks and schools. What’s more, Wu said, the development review process that guides new growth has “overtaken and subsumed long-range planning.”
“The budget for the [BPDA] is self-generating from the properties that they own, and it is separate and off the books from city government,” Wu said. “That has meant resources get pulled to what generates more resources.”
As a city councilor, Wu was a frequent critic of both the BPDA and the Zoning Board of Appeal, particularly after a BPDA staffer pleaded guilty to a federal bribery charge tied to a ZBA vote in 2017.
Once she became mayor, the city’s development regime was an immediate priority. In just one two-day stretch barely a month after taking office, Wu announced plans to study hiking fees on new development and rent control, pursue a new tax on high-dollar property sales, and eliminate parking requirements for certain affordable housing projects.
The rapid-fire announcements — seemingly made with little consultation from the development industry — caught many off guard. What wasn’t immediately clear, though, was whether Wu would actually follow through and dismantle the BPDA.
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Other mayors — including Wu’s immediate predecessor, Martin J. Walsh — tinkered around the edges but left the agency’s fundamental powers alone. Commercial real estate drives Boston’s tax base, and the development boom of the last two decades is a big reason why property tax revenue has nearly tripled in that time, from $925.9 million in fiscal 2002 to $2.94 billion this year.
The BPDA and the mayor, who appoints its director and most of its board, have vast powers to decide what gets built and where. Writer Rachel Slade in Boston Magazine a decade ago likened it to “the ring at the heart of ‘The Lord of the Rings’: If you make it your own and harness its powers, you can do almost anything you want.”
In her first year in office, Wu avoided direct questions about the BPDA’s future. She hired Arthur Jemison away from the US Department of Housing and Urban Development to be both her chief planner — a newly created Cabinet position — and BPDA director. In a talk last June with commercial real estate industry group NAIOP Massachusetts, Jemison hedged, acknowledging “we’ve heard a lot about words like ‘abolishment,’” but said the administration was refocusing on how “the way we’re organized needs to allow there to be a more predictable process.”
Changing the agency’s structure has been anything but comfortable for its 200-plus staffers, however. At that same all-staff meeting in February, one staffer told Wu he was having trouble sleeping due to the stress of the undefined transition, according a person in attendance. (The BPDA’s HR director later sent an all-staff e-mail saying the full transition would take up to two years to complete and that “no one is losing employment,” according to a copy of the e-mail obtained by the Globe.)
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Since Walsh left to join the Biden administration, the BPDA has lost experienced staff at a rapid clip. While many have been hired to fill the open roles, the loss of institutional knowledge is still profoundly felt, both inside the agency and out, say people familiar with the BPDA’s operations. Agency leadership typically changes with a new mayor; former BPDA director Brian Golden departed the agency around this time last year. But a wave of other nonpolitical appointees have also departed. Longtime legal counsel Eileen Brophy and Lisa Richardson had nearly 40 years of combined experience at the agency; both left earlier this year.
All the uncertainty — on top of a wobbly economy — adds another layer to developers’ concerns.
“What’s happening now in the city of Boston is a little bit of the opposite of what makes development move really smoothly,” said Gary Kerr, managing director for real estate firm Greystar in Boston. “You’re stuck saying: ‘I’m not sure what the next steps are.’ Are you going to start talking, negotiating, dealing with a person who may not be in that job in nine months?”
Last fall, Greystar opened a luxury Back Bay apartment tower at 212 Stuart St. And while it’s developing both a lab in Somerville and around 2,000 housing units in Everett, it currently has no more future projects on the books in Boston. It doesn’t make economic sense for Greystar to build housing in the city right now, Kerr said, and it’s difficult at best to explain to potential investors what comes next in Boston’s development process.
“All housing right now basically doesn’t make any sense. Even if the land is free, it doesn’t make any sense,” Kerr said. “When we say, ‘We don’t know what could happen, and when it could happen,’ nobody wants to capitalize these projects.”
Establishing a city planning department “in itself is a great thing,” Kerr said, but the uncertainty of “a slightly opaque transfer of an agency” and the potential for years between now and when that department is established creates an “instability” that “breeds an environment in which development doesn’t happen.”
And that, he said, will only make Boston’s housing crisis worse.
For a range of reasons, things have already slowed. The BPDA last year approved just 2,647 housing units — the fewest since at least 2015 — with 2,086 OK’d since the start of 2023. Some 10,379 housing units were permitted between 2020 and 2022, according to city data from the Mayor’s Office of Housing. Wu and Jemison both say they’re focused on getting the pipeline of around 23,000 housing units that are approved but not yet built under construction.
Wu says she understands the difficult economic times both locally and globally — and she wants her administration to set a foundation for the city’s success. That’s why she’s pushing ahead with her long-term plans for the BPDA despite some short-term pain.
“The structure itself has to change,” she said.
Catherine Carlock can be reached at catherine.carlock@globe.com. Follow her on Twitter @bycathcarlock.