Northeastern University’s recent annual housing report card shows housing costs went up by roughly 50 percent in Greater Boston over the last decade, while household income fell. This perverse trend has clearly overwhelmed the great potential of our creative industries to create jobs. With 7.2 percent of residents out of work, Massachusetts now falls in the bottom half of states (29th) ranked by the unemployment rate.
For over a decade, Northeastern researchers have issued a perennial warning that housing is chocking our economy. The state has responded with one innovative effort after another. These initiatives have been beneficial, but the stubborn reality is we still need much more housing production. This year Northeastern’s report offers an auspicious glimmer of hope: the region is now seeing a big bump in demand for urban living. The new trend points to a real opportunity in a bill currently before the Legislature, which would catalyze private investment in pro-growth Gateway Cities.
Across the region, Gateway Cities like Chelsea offer a reservoir of housing opportunity. Our communities are dotted with old mill buildings that can be converted to housing, and vacant land hungry for infill. As Gateway Cities, we also have tremendous infrastructure with excess capacity — roads, water, and sewer — plus connections to highways and mass transit.
What we lack is a well-functioning real estate market. In contrast to everywhere else in the region, rents are too low for developers to make projects work. Herein lies the rub: Development won’t occur until values go up, but values won’t go up unless development occurs. We need pump-priming projects that clear away some of the blight, inject a bit of new economic activity, and send private investors a signal that a turnaround is underway.
The legislation, An Act to Promote Transformative Redevelopment in Gateway Cities, would give economic development agencies tools to address this Catch-22. In the past, this kind of public subsidy would have been misguided; demand just wasn’t there. But there’s clearly a new affinity for urban living. The Housing Report Card shows that in sharp contrast to a decade ago, when production was mostly single-family homes in high growth suburbs, today new development is occurring in the form of urban multi-family projects.
With the right public investment, we can create high-quality urban living in Gateway Cities at a price-point that will keep middle class families, and the employers looking to hire them, here in our region. Advancing the transformative redevelopment legislation will put people in the construction trades back to work expanding the supply of housing, better positioning the Massachusetts economy for growth, and generating large returns for taxpayers over the long term.