Housing costs have hidden toll

Business is booming at Boston Heart Diagnostics in Framingham, with plans to hire another 100 employees during the next year.

But the cardiac testing company’s ambitious growth plans are running up against the area’s soaring housing prices and ever more intense rush-hour traffic, said Susan Hertzberg, the company’s chief executive.

“We are recruiting from out of state, but the rate at which housing costs are growing is pushing up our costs where we can’t afford people who should be in our zone,” Hertzberg recently told researchers and local business leaders at a conference examining a new report on the regional economy.


Boston’s western suburbs are booming again, but relentless increases in the cost of living, from housing prices to grocery and gas bills, are providing challenges to businesses and institutions as they look to add employees, according to the Greater MetroWest Economic Profile 2014.

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The region has gained back all of the jobs it lost during the recession that ended five years ago, and is back in expansion mode, with an unemployment rate of 4.6 percent that is markedly below the state average of 6.3 percent, the report by Framingham State University’s MetroWest Economic Research Center states. The analysis focused on 13 area communities: Ashland, Framingham, Holliston, Hopkinton, Hudson, Marlborough, Natick, Northborough, Sherborn, Southborough, Sudbury, Wayland, and Westborough.

Technology, research, and professional services businesses have led the rebound, adding nearly 3,000 jobs from 2009 to 2012, or an 8.1 percent increase, the report found.

Banks and financial services added nearly a thousand jobs during the same period, a 16.5 percent gain, while hotels, restaurants, and other businesses in the leisure and hospitality sectors added 690 jobs for a 5.1 percent increase, according to the study.

“The good news is that it appears Greater MetroWest may have completed its recovery from the Great Recession,” said Donald MacRitchie, a Framingham State professor and codirector and chief economist at the MetroWest Economic Research Center. “It may have reached or even exceeded the number of jobs that existed before the recession.”


Yet along with a growing economy have come growing costs.

The area’s overall cost of living jumped 17 percent from April 2009 through last October, the report found.

Leading the way was a 20 percent increase in home prices, a 51 percent increase in gas prices and other transportation costs, and a 30 percent increase in health care costs. Food costs were up 11 percent, according to the report.

The region’s cost of living is also substantially higher — more than 40 percent overall — than the national average, the study said.

The situation has presented problems for Boston Heart Diagnostics, Hertzberg said during a panel discussion at the April 30 conference hosted by the research center.


On one hand, the region, in the heart of the research- and health care-intensive Boston area, is a perfect location for the company, and gives it access to a deep, local talent pool, she said.

‘The rate at which housing costs are growing is pushing up our costs where we can’t afford people who should be in our zone.’

Yet MetroWest’s housing and living costs can be daunting for prospective employees considering a move from a less expensive area.

Growing traffic congestion on the area’s major roadways — and the way it extends commuting times — is another challenge her company is facing, she said.

Boston Heart Diagnostics is in the market to lease another office building, but is having to intensively study traffic patterns to ensure it will not lose some employees after the move. A seemingly minor shift in location can significantly increase the commuting time for one group of employees or another, Hertzberg said.

“Moving three miles in one direction is OK, but three miles in another direction is an additional 20 minutes for other people and it’s a deal breaker,” Hertzberg said.

Susan Butler, associate director of science and engineering at the Army’s Natick Soldier Systems Center, or Natick Labs, also noted the growing challenge that clogged roadways, especially Route 9, pose for local businesses and institutions like hers.

“I hear in my organization that if you come down Route 9 and if you miss one light, you missed them all,” she said.

The lack of any major public transportation system serving MetroWest communities is a significant factor in the congestion on its roads, said Bonnie Biocchi, president and chief executive of the MetroWest Chamber of Commerce.

“We don’t have public transportation like they have in Boston, we don’t have public buses that run all night,” she said. “If you live 15 or 20 minutes from your job, you have get into your car.”

Nor is it just quality-of-life issues that pose a challenge to the “innovation economy” that drives growth and expansion in MetroWest.

While the local innovation economy is booming, the billions in federal research funding on which MetroWest and Massachusetts as a whole depend upon is under assault in Washington amid lean budget times, warned Patricia Flynn, a Bentley University professor who tracks the state’s innovation economy.

“We are more vulnerable than any other state to the cuts,” she said. “Our innovation economy really is dependent on inflows from the federal government.”

The full report is available on the research center’s website, www.merc-online.org.