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Massachusetts Economy: A Home for Everyone that Everyone Can Afford

Posted on January 17, 2023

By Sam Larson

Massachusetts has spent decades making strategic investments in its economy. World-class colleges, universities and health-care facilities have made the commonwealth a hub of investment and innovation.

These investments will all be for naught, however, 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 important to examine housing and transportation as quality-of-life issues that are pushing workers out of the state.

Massachusetts was identified as one of “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 $510,000 in 2021, 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 competitive edge against states with better tax incentives. However, this 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.

At the same time, it has never been easier to work from home, or in a different state, or anywhere else on the planet. Would you rather rent a place with four roommates or own your own three-bedroom home at the same salary?

Without a real commitment by policy makers and Massachusetts employers to find solutions that lower housing costs, our talent will continue to leave. Employers have tried to provide their own incentives to keep talent in the state, usually in the form of high wages. Even with these wage increases, however, 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 potential employees cannot afford to live anywhere near those prospective jobs.

Housing challenges are extremely complicated and there is no silver bullet to alleviate the problem. 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 should encourage a massive development boom to address the supply side of the issue. As of today, the Commonwealth needs at least 50,000 new units of housing to achieve a healthy market.

Making these changes will require uncomfortable conversations about how to accommodate the necessary growth. It will require a re-examination of decades of zoning and local policies that have not yielded the development necessary to meet demand. The harsh reality is that when it comes to building more affordable housing, the Not in My Backyard mentality is unsustainable if Massachusetts is serious about economic success and growth.

The Massachusetts housing problem presents an opportunity as well. Everyone in the state is equally affected by the issue. It cuts through the traditional partisan, regional, and even the management-versus-labor divides. That is why AIM will continue to use its platform 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. Policy makers 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. It will also facilitate the state workforce being able to get to their places of employment. A place to live is great, but if you can’t get from your home to your work, then can you afford to stay there?

Transportation must be reliable and affordable. As rush-hour traffic returns to pre-pandemic levels and the MBTA runs trains at less frequent intervals, both employers and workers need results that will rebuild confidence in the state’s transit system. Just last week, we saw Boston traffic ranked fourth worst in the world, with the average driver spending 134 hours stuck in traffic last year.

As with housing, there is no easy solution when it comes to transportation challenges. What is clear is that more data must be collected about how people are commuting – and when – before any policies are put forward regarding new mandates. What we know now is that public transportation options could be expanded and reliability of those systems needs massive improvement.

Massachusetts voters in November passed a tax hike and legislators have promised to dedicate a portion of that windfall to transportation projects. AIM will be at the table to ensure that the money is spent wisely on improvements that deliver tangible results for commuters. Those results 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. And while Massachusetts has been at the forefront of our nation’s history, we cannot allow it to not be at the forefront of our future. It will take leadership, creativity, and patience to turn the tide and ensure that Massachusetts can again be a home for everyone.