Editor’s note – AIM Vice President of Government Affairs Sam Larson wrote the following article in January about the importance of housing affordability to the economic future of Massachusetts. Governor Maura Healey last week unveiled a $4 billion plan last week to address housing issues.

By Sam Larson
Vice President, Government Affairs

Massachusetts has spent decades making strategic investments in its economy. As a result of world-class colleges, universities and health-care facilities, the Commonwealth has been a hub of investment and innovation. However, these investments in the Massachusetts business climate will all be for naught if no one can afford to live here. The rising cost of housing in the state and demographic shifts have led to a property market that threatens the economic stability of the state.

As AIM promotes its theme of advancing the Commonwealth’s attractiveness and competitiveness, it is prudent to examine housing and transportation as quality-of-life issues that are pushing workers out of the state.

Massachusetts was identified as one of the “most moved-from states” for the third straight year according to United Van Lines, which tracks outward migration. Cost of living and quality of life were overwhelming factors in pushing working-age families out of the state. The primary reason behind those moves is that the median home price in Massachusetts rose from $285,000 in 2011 to $600,000 in August, an increase that has far exceeded the rate of inflation.

According to MassInc the state’s working-age, college-educated population will fall by 192,000 residents by 2030, a 10% drop over current levels. A talented workforce has long been the Commonwealth’s calling card and our competitive edge against states with better tax incentives. However, our key advantage is eroding quickly as skilled workers choose to live in states where their dollar buys them a better home and more affordable way of life.

On top of this, it has never been easier to work from home, in a different state, or anywhere else on the planet. As a result, workers are making their own decisions about where they locate. For some, it is a decision about whether they want to rent an apartment in Boston with four roommates or own their own three-bedroom home in a different, lower-cost state while earning the same salary.

Massachusetts employers are forced to create their own incentives to keep talent in the state, usually in the form of high wages. Even then, the cost of housing in certain regions has exceeded any economically viable offers businesses can make. AIM members from restaurants on Cape Cod to factories in the Berkshires cannot fill their worker vacancies regardless of the salary offered because any potential employee cannot afford to live near those prospective jobs.

There is no silver bullet to alleviate the problem. However, the basics of supply and demand are a great place to start. Since there are more people who need homes than homes available, the state must encourage a massive development boom to help fix the supply side of the issue. As of today, the Commonwealth needs at least 200,000 new units of housing to achieve a healthy market.

Policymakers will have to engage in uncomfortable conversations with their communities about how to accommodate the necessary growth. We need to reexamine decades of zoning and local policies that create more problems than they solve. The “Not in My Backyard mentality” is unsustainable for the state and communities must learn to accept more neighbors and denser living options.

Despite the daunting task at hand, the problem presents an opportunity. Everyone in the state is equally affected by this issue. It cuts through the traditional partisan, regional, and even the management versus labor divides. AIM plans to lead on this issue and find common-sense solutions.

Effective zoning and housing changes must be linked to efficient transit to facilitate sustainable growth. Policymakers must allow for denser housing near public transit centers. This will allow workers with cheaper, cleaner options to get to work and out of their cars.

That transportation must be reliable. As rush hour traffic returns to pre-pandemic levels and the MBTA runs trains at less frequent intervals than those in Kiev, both employers and workers need results that will rebuild confidence in the state’s transit system.

Voters passed a tax hike last fall and legislators have dedicated a portion of that windfall to transportation projects. AIM will be at the table ensuring that the money is spent wisely on improvements that deliver tangible results for commuters which will in turn allow the state’s economy to grow.

Massachusetts is on pace to become a museum. A nice place to look at and visit, a place dedicated to celebrating former success, but not a place for growth. It will take leadership, creativity, and patience to turn the tide and ensure that Massachusetts can again be a home for everyone.