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End The Crises: MassDOT, Business Leaders Ramp Up Calls To Pass Housing, Transportation Bills

Boston’s economy remains strong, but business and political leaders say the region needs a wake-up call on housing and transportation to maintain the momentum.

End The Crises: MassDOT, Business Leaders Ramp Up Calls To Pass Housing, Transportation Bills
Metropolitan Area Planning Council Deputy Director Rebecca Davis and Massachusetts Department of Transportation Secretary and CEO Stephanie Pollack

Greater Boston’s commercial real estate sector had one of its strongest years of the decade in 2019. Urban office vacancies ended Q4 at a cyclical low of 7.1% and the region’s lab vacancies hit a historic low of 5%, according to Newmark Knight Frank.

Massachusetts’ 2.9% unemployment rate remains below the 3.5% national average, although economists have warned low employment may actually begin to negatively impact the state economy. There are not enough people, or homes, to fill the jobs continuing to arrive in the Bay State.  

“When I look at the world, the biggest threat to the economy of Greater Boston is housing,” Massachusetts Department of Transportation Secretary and CEO Stephanie Pollack said Wednesday at Bisnow’s Boston 2020 Forecast event. “We are not going to be able to continue the great prosperity we’ve seen in Greater Boston unless we can figure out how to build housing, and as much of that as possible near transit.”

End The Crises: MassDOT, Business Leaders Ramp Up Calls To Pass Housing, Transportation Bills
Samuels & Associates Chief Operating Officer and principal Leslie Cohen and Bozzuto Development Co. Senior Vice President Lauren Jezienicki

When MassDOT runs traffic models, the transportation agency uses commercial development and projected job numbers as well as the regional housing stock to analyze congestion. However, Pollack said MassDOT can no longer run the model in balance due to there being fewer houses than there are projected jobs in the region. 

“We have to either take development out of the model or make up housing where it does not exist,” Pollack added. “That is a crisis.”

For the third year in a row, the Massachusetts legislature is considering Gov. Charlie Baker’s Housing Choice bill, which would allow communities to pass housing-related zoning changes with a majority vote instead of the current two-thirds majority requirement. Baker sees the bill as a key tool in promoting housing density near transit stations, an initiative Pollack said she spends much of her time focused on. 

“Lowering the threshold to just a simple majority for some of these zoning changes is an important first step in terms of making development easier and really critical in solving this major challenge,” Metropolitan Area Planning Council Deputy Director Rebecca Davis said.

End The Crises: MassDOT, Business Leaders Ramp Up Calls To Pass Housing, Transportation Bills
BSC Group President and CEO Sean O’Brien and Kendall Square Association President C.A. Webb

Increased housing density around all 284 stations on the MBTA commuter rail and subway lines would add much-needed supply and reduce traffic congestion, according to a December report by the Massachusetts Housing Partnership. The affordable housing advocacy group estimates 253,000 new residential units could be created by increasing density from 6.4 units per acre to 10 units around each station. 

“Housing production is key to solving a lot of problems,” Samuels & Associates Chief Operating Officer and principal Leslie Cohen said. “It’s key to solving transit, maintaining growth and growing these job centers we’re seeing pop up all over the city.”

But other panelists want to see a direct approach to transit and congestion. 

End The Crises: MassDOT, Business Leaders Ramp Up Calls To Pass Housing, Transportation Bills
Hirschfeld Properties Chairman and CEO Jeffrey Hirschfeld, MetLife Real Estate Investors Director Ashleigh Simpson and MP Boston Principal Joseph Larkin

Businesses in Kendall Square have warned state officials they need to make significant improvements to transit, especially following a June 2019 derailment on the Red Line, which runs directly under the neighborhood.

Leaders from about three dozen Kendall Square businesses, including Boston Properties and MIT, sent a letter to state leaders following the derailment and called for more revenue to address transportation and “end this crisis.

Kendall Square Association President C.A. Webb, who drafted the letter, doubled down on the claims Wednesday.

“My biggest hope for the next 10 years is that, in 2020, we do right by our future in passing a comprehensive transportation bill that does not look small or incrementalist,” Webb said. “My biggest fear for 2020 is that our legislators punt, add a few cents to the gas tax or to [transportation network companies like Uber and Lyft] and, in 2030, we’re going to be sitting here with the problems exacerbated and all the companies adding value to places like Kendall Square will have moved on to Austin or Denver or LA or other places that are doing better planning and making smarter investments.”

End The Crises: MassDOT, Business Leaders Ramp Up Calls To Pass Housing, Transportation Bills
Cobu founder and CEO Benjamin Pleat and Crescent Heights Executive Vice President Simon Spira

Infrastructure is the top issue facing real estate, according to the most recent Counselors of Real Estate survey. Congestion on area roads and railways are also testing residents’ patience locally. A third of people who live inside Greater Boston’s Route 128 have considered moving away from the region due to traffic, according to a MassINC Polling Group poll last year. 

Raising the gas tax has become a common way for states to fund transportation improvement projects. Massachusetts leaders last raised the gas tax in 2013, and a 15-cent gas tax hike has gained widespread support from mayors in the Greater Boston area. Transit advocates have also called for congestion pricing to be added to area roadways at peak travel times. 

But Pollack said the region’s transportation problems will take more than revenue to solve.

“The truth is just capital won’t solve the problem,” she said. “We are way behind other parts of the country in how we deliver projects in public-private partnerships, in joint ventures and how we do procurement.”

End The Crises: MassDOT, Business Leaders Ramp Up Calls To Pass Housing, Transportation Bills
Colliers International Managing Director Frank Petz and National Development Managing Partner Brian Kavoogian

While public-private partnerships have gained traction in infill transit projects like Boston Landing and Assembly Row, Pollack said it is still difficult for a real estate developer to assist on something like a station improvement and gift it to the MBTA without going through a public procurement process. 

Baker’s transportation bond bill, which is still in a state transportation committee, has language that would make it easier for MassDOT to execute P3s with a developer and improve the transit network, according to his transportation secretary.

Bozzuto Development Co. Senior Vice President Lauren Jezienicki, whose firm is partnering with the MBTA on the North Quincy Station redevelopment, sees a widespread initiative as key to solving both transportation and housing issues. 

“All of the towns and cities around need to come together, think really big picture and really solve some of these transit, housing and infrastructure problems that cannot be solved as a city or a town in a stand-alone way,” she said.