John Fish made his name right here in Massachusetts.
Over the past four decades the Hingham native has built Suffolk into the state’s largest construction company. He is the chair of Brigham and Women’s Hospital and Boston College (the first non-alumnus to hold the position). And he cofounded the Massachusetts Competitive Partnership, the elite business public policy group.
What many people might not realize is that while Suffolk was busy putting up some of Boston’s biggest buildings — Encore Boston Harbor, Winthrop Center, One Dalton, to name just a few — Fish was busy pushing the company into new markets, including New York, Miami, Dallas, and San Francisco. Last year, nearly half of Roxbury-based Suffolk’s $5.7 billion in revenue was generated outside Massachusetts, and of its 3,000 employees, 1,800 work in other states.
The point here is that Fish not only knows Boston, but he’s also seeing business conditions on the ground in parts of the country far from our parochial bubble. Moreover, as chair of the national Real Estate Roundtable, he’s getting first-hand experience promoting the industry’s policy priorities in Washington.
I spoke with Fish on Wednesday, and while we covered a range of topics, here are his views on three issues he considers pressing.
The looming commercial real estate debt crisis could derail the economy
More than $900 billion in loans backing commercial real estate and multifamily housing is set to come due this year and next. But high interest rates — and low occupancy in downtown office buildings and retail locations — have left many owners underwater, owing more to lenders than the value of their property.
This has raised serious concerns about how the debt can be refinanced without forcing banks to take big writedowns and increase their capital cushions, which would prompt them to curb lending, throttling back the economy in the process.
“We’re in a very precarious situation,” Fish said.
The Real Estate Roundtable has asked federal banking regulators to give lenders and borrowers more time — as they did following the 2008-2009 financial crisis and the onset of COVID-19 — to restructure the debt while property valuations stabilize and owners raise more equity to back their loans.
If regulators agree, “there’s no doubt in my mind. . . the debt can be preserved and [bank lending] won’t be interrupted,” Fish said.
At the same time, Fish said, it’s crucial to get more workers back in the office, and the federal government should lead by example. About half of the government’s 2 million civilian employees began working remotely in March 2020; many have yet to return. Last month, the Biden administration told federal agencies it wants to “substantially increase” in-person work, but Fish believes it needs to be more aggressive.
“The federal government is the entity that asked people to go home. And the federal government has not reversed that course and asked people to come back,” Fish said.
Fish said working together in the same place “is a very important thing to the culture of American business,” and more office workers in America’s downtowns would give a boost to surrounding businesses.
The construction industry is being constrained by a labor shortage
“Unemployment in construction today in America is zero,” Fish said.
That has sent wages — and building costs — sharply higher.
He cited three factors for the dearth of workers: an aging workforce, the loss of workers during the pandemic, and immigration limits. And he lamented the failure of the House to go along with a bipartisan Senate bill in 2013 that would have provided a pathway to citizenship for millions of undocumented immigrants, offered temporary work visas for lower-skilled workers, and significantly strengthened border security.
Fish said an immigration overhaul along the same lines as the one that failed in 2013 is essential to keep the economy growing.
“If we don’t solve the immigration crisis we are going to continue to experience high wages, high construction costs, and a shortage of housing,” he said.
Massachusetts is sending out an anti-business vibe
Fish was an active behind-the-scenes opponent of the Fair Share Amendment, the union-backed ballot proposal for a 4 percentage-point surtax on incomes above $1 million.
Voters’ approval of the so-called millionaires tax, he said, sent a loud message to the rest of the world that Massachusetts wasn’t particularly interested in supporting businesses.
Fish said that it’s time for a “more important conversation” about the growing anti-business sentiment in the state. He didn’t call out Governor Maura Healey or any Democrats in the Legislature, instead saying Massachusetts has a lot of young people, and “the younger people are, the tendency is to look at business with a jaundiced eye.”
But Fish made clear that, in his view, things had changed since Charlie Baker left the corner office.
“The last administration across the board really put emphasis on the importance of business” in driving economic and social prosperity, he said.
“What’s important is that we appreciate more of what we have to offer” to attract and retain businesses “and to build a consensus with both the political establishment and the business community in a way that our value proposition doesn’t get diluted or impaired.”
Compared with putting up a skyscraper in the middle of Downtown Crossing, building a consensus on how to make Massachusetts more competitive seems like the harder job.