For Boston Life Sciences, Climbing Housing And Transit Costs Could Be Drag Or Disaster
Boston’s longstanding economic engine — biotech — has conferred undeniable benefits on the metro area, hitting 106,000 total jobs last year and bestowing a reputation as a mecca of innovation and research. But as prices rise, biotech workers increasingly struggle to cope with rising home prices and access to reliable transit.
New stats from industry trade group MassBio and BioConnects New England suggest sustained future job growth, and salary projections for many members of the workforce that fall short of what’s needed in a pricey metro like Boston. A lack of public transit makes it difficult to travel to farther-flung research labs. And while the area’s status as a U.S. leader in biotech is entrenched, there is some concern that biotech companies searching for more cost-effective solutions might look elsewhere.
“Housing is a crisis, and our transportation is outdated, unreliable, and unsafe, and stifling economic growth,” said MassBio CEO Joe Boncore, a former Massachusetts state senator who focused on housing and transportation issues. “There’s a cost to modernizing our public transit system, but the bigger cost people should be concerned about is the cost of doing nothing, because ultimately, if we choose the path of doing nothing, you know, we're gonna lose our economic competitive advantage.”
Lab technologists or technicians in Boston make an average of around $50K a year with a bachelor’s degree, according to Jared Auclair, co-lead of BioConnects New England. This salary is far from enough to afford a larger rental apartment or house, or raise a family; the average two-bedroom apartment in Boston costs nearly $5K per month, according to Rent.com figures, which would by itself deplete that salary before the end of the year.
“Everybody acknowledges that there's a problem,” said Auclair, in response to the industry response to the region’s housing challenge. “But not much has been done in terms of commitment to investing in or finding solutions.”
There’s no argument the Boston area suffers from an affordable housing crisis, with some of the most expensive real estate in the country. The state set a goal to produce 135,000 new units by 2025, announced as a new zoning reform bill was signed by Gov. Charlie Baker last year. There’s also a shortage of reliable and rapid mass transit options which, exacerbated by the lack of affordable housing near jobs, has made the region one of the most congested in the nation, limiting access to job opportunities for many.
Industry figures disagree about what the impact will be in the short and long term on the growth of the biotech and life sciences industry. The industry can’t “rest on its laurels,” and it needs to support this critical sector of the region’s economy and make sure there’s enough middle income and workforce housing, NAIOP President Tamara Small said.
“If we are not able to produce this housing, workers and employers will go someplace else,” she said. “And now the ability to do that is greater than ever.”
Auclair sees the twin issues of housing and transportation as seriously harming the industry’s growth in the region.
A recent MassBio report said the Boston area will need 40,000 new workers in the next decade, based on available lab space. Auclair worries, with massive growth in other life sciences markets like the more affordable North Carolina and Philadelphia, that while Massachusetts is well-positioned now, it could repeat the same mistake it made with the digital revolution if it doesn’t course-correct.
While this is an issue that needs to be addressed, CBRE Senior Director of Research Ian Anderson remains skeptical these issues will make any significant dent in the region’s potential. He points to pre-pandemic San Francisco as an example of how the market will accommodate growth; tech employment in the city grew from 24,000 to 115,000 workers between 2009 and 2019, a 386% leap, with apartment rents shooting up 79%.
“The pressures are going to continue to grow,” he said about Boston, biotech and the cost of living. “But the chance of this hampering the growth of the industry in Boston is very, very low. Considering the industry’s stage of maturation and where it is in the economic cycle, there’s no place these firms want to be other than top clusters like San Francisco and San Diego. So it’s not going to be a realistic threat [to move].”
His colleague, CBRE Director of Research Suzanne Duca, who wrote an extensive report on life sciences talent, said that the deep-rooted investment in the ecosystem here means that the industry will do whatever it takes to solve the challenge.
While life sciences doesn’t carry quite the same stigma as tech does in the Bay Area — consistently blamed for the unaffordable conditions impacting much of San Francisco and surrounding municipalities — it does represent a sizable portion of the economy, and its continued growth contributes to the housing crisis impacting the region. Similar problems are seen in the Bay Area, where profit margins on life sciences projects are pushing aside much-needed housing.
Auclair said that as life sciences development continues to expand outward from the Boston region to cities such as Worcester (which does have an extensive bus network, one reason why it’s seeing so much growth), growth is taking place in areas lacking the public transit and multifamily housing stock that has helped preserve a modicum of housing options in places like Boston and Cambridge.
Auclair sees these challenges play out when he’s training new workers. As director of the Biopharmaceutical Analysis and Training Laboratory at Northeastern University, he trains students in a lab in Burlington, Massachusetts, 18 miles north of Boston. Those students often struggle to get to class because there’s no affordable housing nearby and transportation options are few and far between, he said.
There are some positive signs with recent legislation and other developments that have been some positive examples of growth helping the housing and transportation challenges. Recent zoning reform in Massachusetts has loosened local control over zoning decisions, making it easier to build.
Boncore said leaders in Beverly, Massachusetts, have done a good job of focusing on affordable housing production. And there have even been some examples of mixed-use projects featuring lab and housing options, such as the suburban Natick Mall, being redeveloped to include research space and housing.
But the speed and pace of affordable housing development isn’t keeping up with the need, and it is still challenging for affordable projects to pencil out without some kind of municipal tax breaks, federal funding or land donation, Jodka said.
Boncore said the industry and MassBio are advocating investment in public transit systems, and getting workers out of cars and into trains and other options. He also supports housing policies from the state that produce more supply; he noted the recently passed state-level Housing Choice Bill, a 2018 bond that earmarks $1.8B for housing, and the expansion and empowerment of local leaders to expand housing access beyond typical challenges of local control and NIMBY pushback.
There aren’t specifics on what the industry itself will contribute, in terms of funding or support for affordable housing development compared to actions taken on the West Coast, many tech giants have invested sizable amounts of money in multimillion-dollar funds meant to expand affordable housing production. Boncore said the industry had a “corporate social responsibility” to be at the table thinking through these issues with policymakers, and will continue to “work hand-in-hand with legislators.”
That effort will continue early in 2023, when the new state legislature and governor return to work. There’s hope from Boncore and others that efforts to streamline housing production can continue. It’s a stubborn, intractable problem that is far from unique to Massachusetts.
“No matter where the industry wants to go, it's in the United States, it's gonna be the same housing challenge,” Auclair said. “They have to solve it someplace, so they might as well solve it here.”