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Another local college is closing. Texas startups just out-raised their Massachusetts counterparts for the first time. And a dozen mayors are so worried a misguided rent control measure will make it to the November ballot that they’re warning its passage would deepen the state’s housing shortage rather than ease it.
Read together, these Globe stories this week deliver a clear message: The state’s elite higher education industry, innovation economy, and housing market are all under stress.
School daze: Hampshire College, a small liberal arts school that has been under financial pressure for years, said it would close after the fall semester.
Enrollment at the Amherst campus has declined by half since the early 2000s to about 625 students, according to Hampshire president Jennifer Chrisler.
Its closing is part of a broader trend within higher education, in which smaller private colleges in particular have struggled, while the soaring costs of tuition have prompted more families to question the value of a four-year degree, write the Globe’s Brooke Hauser and Diti Kohli. By one new estimate, more than one-quarter of all private colleges in the US could close or be forced to merge within the next 10 years.
Fewer high school graduates are choosing to go to college amid a “public discussion in this country about the value of a liberal arts education,” Chrisler told The New York Times.
Moreover, higher education is facing an enrollment cliff. The number of college-age students will fall about 15 percent through 2029, according to Carleton College economist Nathan D. Grawe.
The implications for Massachusetts are large. Fifty-nine private, nonprofit colleges and universities contributed $71.1 billion to the state’s economic output, supported more than 320,000 jobs, and generated $2.4 billion in annual tax revenue, according to a 2023 study by Econsult Solutions for the Association of Independent Colleges and Universities in Massachusetts.
Texas toast: When it comes to venture financing, Austin is hot on Boston’s heels.
Texas startups gathered $5.8 billion from venture capital investors in the first three months of the year, topping the $5.3 billion for Massachusetts startups, according to research firm PitchBook and the National Venture Capital Association.
My colleague Aaron Pressman says it’s likely the first time ever that the Bay State has fallen behind the Lone Star State. In the previous four years, Massachusetts held an average quarterly advantage of $2 billion quarterly over Texas.
Though it may just be a slip in the rankings, and Massachusetts startups could pull back ahead for the rest of the year, the news comes as the state is dealing with several major challenges, Aaron reports. And it continues the narrative of decline for the state that invented venture capital investing and ranked behind only California as recently as 2013, when New York’s position as a capital of finance and media helped it pull ahead.
Trump administration policies, including research cuts and hostility to climate-change initiatives, have hurt the biotech and green-tech industries. The state hasn’t been a player in AI, which is sucking up hundreds of billions of dollars in investments. Texas, meanwhile, has emerged as a power in defense tech, robotics, and energy.
The financing slowdown matters because venture capital is the lifeblood of the life sciences, biotech, and technology sectors at the heart of the state’s high-end economy. Jobs, workers — and tax revenues — will go where that money flows.
Rent ruckus: Sky-high housing costs put the state at a competitive disadvantage to lower-cost rivals, and that disadvantage is getting worse.
A statewide rent control initiative likely headed to the November ballot is being sold as a fix. It isn’t.
The proposal would limit annual rent hikes to the rate of inflation, with a cap of 5 percent. But controlling rents won’t build a single new unit. And by capping landlord returns, it discourages the new construction that is the only real path to keeping rents in check. It would also depress property values, straining municipal budgets.
Last month I argued that the measure is a bad idea. This week, a group of mayors made their case against the initiative.
“What is especially ominous about the proposed ballot question is that it applies not just to the red-hot Boston housing market, but everywhere else in the Commonwealth,” New Bedford Mayor Jon Mitchell warned. “In Greater New Bedford and other regions where housing developers at times struggle to make their numbers work, it would effectively shut down housing production.”
Mayors from Worcester, Lawrence, Quincy, and Revere also oppose the initiative.
The solution to Massachusetts’ housing crisis isn’t a limit on what landlords can charge. It’s a combination of development incentives and zoning changes that make it easier and more profitable to build.
Final thought: None of this week’s developments — one soft quarter for venture capital, one college closing, one ballot initiative that hasn’t passed — is fatal on its own.
But the trends continue to move in the wrong direction.
Larry Edelman can be reached at larry.edelman@globe.com.