As Housing Booms in MA, Residents Push for Even More Construction

August 2015 marked the third straight month of increased housing sales in Massachusetts. This continued spike has lawmakers worried about the availability of affordable housing in the commonwealthhousing units are being swooped up faster than they are being built. The goal is to make sure that, as MA continues to compete to bring in workers, it also competes to provide sufficient housing for those workers. A bill, sponsored by the Housing Committee co-chairs, Senator Linda Dorcena Forry (D) and Representative Kevin Honan (D), has been proposed that would increase the amount of housing stock in the commonwealth.

housing-massachusetts-single-familyHousing Partnership Directors Testify

In early October, advocates for the bill testified before the commonwealth’s Housing Committee. Somerville Mayor Joe Curtatone, among others, have stood behind the bill. MA Housing Partnership Executive Director Clark Ziegler testified that the average single-family home in metropolitan Boston takes up over one acre of land, which is about equal to one NFL football field. The size of these properties has less to do with what people want and more with what local zoning restrictions demand. Even though most buyers prefer homes on smaller lots in neighborhoods that are more walkable, zoning laws make these homes more difficult to put together. Many communities ban the building of multi-family homes altogether.

It isn’t news to say that the cost of renting housing (or the cost of taxes on owned property) in Massachusetts continues to spike. We’re still picking our jaws off the floor after reading this article about wages and rental costs. Even short-term rental properties face increased regulations and pricing. Residents statewide are feeling trapped—some areas are simply becoming too expensive for people to afford.

low-income-housing-massachusettsModerate and Low Income Residences

One of the goals of the bill is to address the lack of low- and moderate-income housing stock in Massachusetts. If passed into law, the bill would require communities to report the ratio of employed residents and available, reasonably priced housing. It will also help measure the negative effects of certain kinds of development in particular communities (e.g., building football-field-sized properties in low-income neighborhoods). The bill represents hope for an increasingly difficult housing market, but advocates have had trouble prioritizing it over short-term-agenda items like neighborhood safety and the energy efficiency of housing units.

Massachusetts Housing Boom

The average MA home sale price in August were $359,000, three percent higher than it was in 2014. Despite these concerns, The Warren Group reported in early October that there had been more than 6,000 single-family home sales in Augustmore than any month since August 2005. Home sales were up 16% from August 2014. Many expect the number of sales to continue to increase into autumn.

The Housing Committee is reviewing a total of six bills related to housing. The bills cover topics such as the expedited construction of multifamily housing (buildings with 20 or more units); the general increase of lower-income housing; and the investigation of the shortage of accessible homes for people with disabilities, veterans, and the elderly.

The real question is, where do you stand? Are more housing developments the answer to the increased need for housing in Massachusetts?

Will Aging Infrastructure Prevent Massachusetts Business Growth?

Massachusetts is known for its convoluted roadways and aggressive drivers. Its residents are no stranger to the aging infrastructure that transforms their daily commutes into heroic efforts of driving prowess and cunning. The roads are both difficult to navigate and dangerous to traverse— full of potholes and spans of structurally deficient bridges. Repairs are underway throughout the state on bridges, highways and tunnels, which only seems to add hours in detours and traffic as unsound areas are brought up to meet standards. While progress is being made, the work that has occurred has only made a small dent in Massachusetts’ transportation system woes, and is further affecting timely delivery of goods, commuting times, and the overall appeal of the state as a location to do business.

The New England Council, a business advocacy group, has expressed concern over the congestion caused by road construction, as these type of inconveniences are often a factor in whether companies stay and expand or leave a region. At the moment, 20 tunnel projects and over 250 road reconstruction and resurfacing projects have entered the design phase, according to the Massachusetts Department of Transportation. Whether these projects will occur, and when, is another story. If approved, these repairs would happen in addition to projects like the ongoing initiative to repair more than 450 bridges. Initially a $3 billion project, it is now predicted to cost a total of $14.4 billion by the time the statewide repairs are completed.

Somerville Street in Blizzard Nemo-

Massachusetts has been experiencing a notable increase in economic growth over the last five years, however businesses are concerned about the timely delivery of goods and services. In a fast-paced economy, meeting deadlines with a tight turnaround time is a key factor of success. Delays and detours ultimately affect the bottom line.

The difficulties commuters faced last winter, between impassable roads, service delays, and cancellations of the MBTA, has business owners worried about the reliability of their employees as well. Dilapidated infrastructure could potentially keep top job candidates from considering working in certain areas. Efforts are being made to overhaul the financial management of the MBTA, as a panel convened by Gov. Charlie Baker in April predicted that the MBTA’s revenue shortfall would total $560 Million by 2020 if changes are not made.

rough roadAlthough business and state leaders agree that Massachusetts’ infrastructure needs refurbishing, the means to pay for these improvements remains uncertain. Maintenance has been deferred multiple times due to lapses in funding, leading to obsolete equipment and crumbling roadways full of potholes. Gasoline taxes have traditionally paid for road and bridge projects, but voters have not approved an increase in the gas tax since 1993.

What do you think? Does the current Infrastructure impact Massachusetts business growth in YOUR sector or does it simply add to the Old England charm?

Brockton Residents Approve Casino In The Recent Referendum

The much anticipated casino referendum for the proposed $650 million resort casino for the Brockton Fairgrounds won by a close 143 votes. The Enterprise newspaper reported that approximately 32% of the city’s 44,010 voting population casted their votes to approve the multi-million dollar casino venture. According to the state’s law, local approval must be granted to obtain a casino license. The proposed casino will be a complex that is expected to include a 225 room hotel, an event center, and many restaurants set on approximately 45 acres of land. The cities of New Bedford and Somerset are also in contention with Brockton for the casino license that has been reserved for Southeastern Massachusetts.

Many of the citizens voted favorably due to the 1,500 permanent casino job opportunities and the minimum $10 million annual income that Brockton would gain if the project is approved. One of the concerns cited by citizens opposing the casino is its close proximity to the Brockton High School.

The project developer for the Brockton casino—Mass Gaming and Entertainment—had invested over $1 million in the campaign to win the approval of the citizens. However, opponents to the casino spent roughly $3,000 for their cause.

State officials have given the developers of the New Bedford casino until June 9th to secure their financial backing or their bid will not be considered. The developers have stated they are confident they can secure their financial backing by the deadline and that New Bedford will be conducting their referendum on the proposed Foxwoods casino on June 23rd. However, the developers of the Somerset do not intend to submit their application any sooner, as they have requested for an extension from the state’s gaming commission.

Considering the financials and after weighing the proposals, the Massachusetts Gaming Commission will make its final decision on the much-anticipated third casino license sometime this fall. The commission has not yet determined when they will be awarding the license for the casino in the Southeast region.

New York City Land Use Attorneys Getting Busier

As New York City Land Use Attorneys Getting Busier, Possible Boom Lies Ahead

In a city where real estate commands a price higher than nearly anywhere else in the world, nothing is easy. This applies to middle and working class residents coping with the high cost of living, as well as to real estate investors and developers to whom New York City government can seem like a maze of approvals and strict standards, comprised of countless committees and interests, all of whom have their own priorities and powers to exercise.

NYC’s Real Estate Market

Increased real estate development activity is affecting New Yorkers who aren’t even involved in the real estate business. The so-called “pencil towers” going up around 57th Street near Central Park are redefining the city’s skyline and breaking records for both heights of residential buildings and sale prices of residential units. Ordinary Manhattan apartments are selling for substantially higher prices as well. According to the Wall Street Journal’s analysis of New York City Department of Finance data, the average sale price for a Manhattan co-op or condo in 2014 topped $1.68 million, which is more than 16% higher than 2013, and 10% above the peak prices in pre-recession 2008.

Mayor de Blasio’s Affordable Housing Agenda

Following the stabilization of the economy at large and the resulting increase in New York real estate development there was a mayoral changing of the guards. Since taking the reigns as Mayor on January 1st, 2014, Bill de Blasio has sought to establish contrast with his predecessor, the billionaire Wall Street magnate, Michael Bloomberg. A prime example of this contrast is placing a dramatic increase in affordable housing in the city as one of his top agenda items. His administration seeks to “to build and preserve 200,000 affordable units over the coming decade.” Achieving such an increase will require changes to infrastructure, building skyward, and new regulations.

Land Use Attorneys

New York City developers rely on land use attorneys to obtain required permits, ensure compliance with zoning laws, and to obtain approval from the city for their projects. There are two categories of development with regard to obtaining approval from the city: as-of-right developments and developments with discretionary approval processes.

The New York City Department of City Planning web site states that “An as-of-right development complies with all applicable zoning regulations and does not require any discretion­ary action by the City Planning Commission or Board of Standards and Appeals.” According to Frank Chaney, who is a land use attorney with Rosenberg & Estis, P.C. and a former Deputy Director of the Department of City Planning, “If there is any way shape or form by which developers can get approvals and permits without discretionary review, they’ll do it. The discretionary approval process can run from one and a half to two years on complicated projects.” As-of-right developments require limited assistance from attorneys, whereas applications with discretionary approvals are the bread of butter of land use legal practices. “Except for the usual due diligence done for all developments, people only need land use attorneys if there is some kind of discretionary approval involved.”

In New York, the recession which began in 2008 resulted in both reduced as-of-right development projects and projects with discretionary approvals. The onset of the recession didn’t immediately affect land use attorneys however, because the pre-recession pipeline of applications with discretionary approvals kept land use attorneys busy well into the first two years of the recession. Per Chaney, “once they [real estate investors and developers] were into the project, most applicants proceeded through the start of the recession into 2009, but the flow of new applications into the pipeline dried up.”

Chaney believes, however, that the demand for land use attorneys has increased since the recession-induced slump. “From 2010 until 2012 or perhaps early 2013, it was pretty slow.  I’m not sure we’re back at same level of activity we had prior to the recession but the gradual recovery has led to more and more activity.”

According to Ross Weil, of the New York City legal placement firm Walker Associates, land use and zoning attorneys have become hot prospects in the current job market. “When real estate is booming, land use work is booming. The current redevelopment efforts in the city mean a boom not just for residential property but commercial too. You can’t build a hotel without this kind of work.”

Uncertain Implementation of Affordable Housing Agenda

During his campaign for Mayor, de Blasio spoke often of increasing affordable housing in the city, and he hasn’t backpedalled since his inauguration. In fact, he’s doubled down, appointing Carl Weisbrod to chair the City Planning Commission and to serve as Director of City Planning, who has echoed the Mayor’s claims that the affordable housing agenda is a top priority.

Thus far, the most significant change in policy the administration has made in the name of increasing affordable housing in the city has been to convert the once voluntary, incentive-based Inclusionary Housing Program into a mandatory participation program. New York City’s Inclusionary Housing Program was originally established in 1987 for the purpose of incentivizing developers to include more affordable housing units in their projects via a zoning exemption allowing developers to build larger structures than they otherwise could obtain approval for, provided their project included a certain amount of affordable housing. In 2005, the Bloomberg administration substantially expanded the incentive-eligible areas in the city. Bloomberg’s major changes to the program seem minor in comparison to de Blasio’s.

In September, Weisbrod announced that affordable housing units will be required for any development projects requiring city planner approval. He spoke in unequivocal terms, saying “You can’t build one unit unless you build your share of affordable housing. You can’t build just market-rate housing, period.”

Alma Realty was among the first developers to opt in to the “mandatory” program with a 1,700 unit project on the East River in Queens, only to be met by resistance at the city council level, where leaders claimed that the 20% of units set aside for affordability wasn’t enough. After a compromise that included a raise to 27%, that project was approved, but the future is clear: achieving the mayor’s affordable housing goals isn’t going to be easy for the administration, or for developers.

Attorney Frank Chaney says he has received numerous calls and inquiries during the first year of the de Blasio administration from concerned people asking him about possible new affordable housing mandates. “What would be the criteria for them? On what basis would they determine compliance with mandates? Some of these questions have been answered to a certain extent, but there are still a lot of unknowns.”

When asked how he thinks de Blasio’s affordable housing agenda will impact land use attorneys in New York, Chaney answered “If they structure the affordable housing program such that it is as-of-right, not discretionary, then there might not be much of an uptick in work for land use attorneys. If it is subject to review and approval, there will be more work for people like me.”

In response to the same question, Ross Weil of Walker Associates said “The increase in development in the city which started in the late Bloomberg years as the economy improved has already led to a major increase in demand for land use attorneys. But if de Blasio’s affordable housing regulations make getting development projects approved more complicated, I’d say land use in the city would be an absolutely booming practice area.”

We’re in the early stages of what Mayor de Blasio called “the largest, fastest affordable housing plan ever attempted at a local level,” that he said would “change the face of this city forever.” If the implementation of his affordable housing agenda results in additional discretionary approvals for real estate development projects, then Mayor de Blasio could change the face of the land use legal practice area in New York City forever, as well.


Construction for New Allston – Brighton Commuter Rail Begins

This spring marked the commencement of construction for the new Boston Landing commuter rail station, part of the Allston-Brighton commuter line.

The new station will be located adjacent to the Massachusetts Turnpike as part of commuter line that connects Framingham and Worcester to South Station. It is expected to open in fall 2016, two years later than the original projected completion date.

MBB-2The station is estimated to cost approximately $20 million ($4 – $6 million more than the original projected cost) and is being financed by New Boston Landing LLC, a New Balance development company. It will provide service to employees of the well-known shoe company, and direct access to the company’s planned Boston Landing development, a complex of restaurants, shops, a hotel, and athletic facilities. The headquarters are still under construction.

A select panel put together by Gov. Charlie Baker earlier this year to study the state of the MBTA suggested that the agency should put expansion plans on hold. However, the panel also stated that projects like this one—which leverage private or federal money—should be exempt from any moratorium and should serve as an example of the type of construction the MBTA should pursue “to stretch every dollar.”

But the protracted timeline also illustrates some of the potential difficulties of a public-private partnership. When private companies foot the bill for major infrastructure projects, the state may find itself beholden to their timeline. With a project like Boston landing, where a private company is ultimately paying the bill, it can be difficult to negotiate penalties for delayed construction.

“Even if it was behind schedule, there aren’t any financial penalties because the private entity has agreed to foot that bill,” said MassDOT spokesman Mike Verseckes.

It is an issue that the state could potentially encounter more frequently in the future, as the state considers other opportunities for public-private partnerships. Last year, the Transportation Department launched a commission to help bring in more private sector partnerships, such a bridge in Cape Cod where the developer could potentially charge tolls and collect revenue.

If the state plans to embark on further public-private partnerships that relate to higher-stakes infrastructure projects—affecting highways, bridges or rails already used by commuters—it would be necessary for officials to take a closer look at ways to negotiate financial penalties for delays.

Will the MBTA Cause the Demise of 2024 Boston Olympics?

At a Suffolk University panel convened in Boston on March 17th, there was a discussion regarding two closely related subjects: improved infrastructure and the possibility of hosting the world’s Olympic Summer games in 2024.

This past December, Boston Mayor Marty Walsh said that the Olympics “allows us the opportunity to really talk to our partners in the state and federal government about upgrading the infrastructure that we have.” Additionally, a study by the state earlier in the year found that an Olympic bid would indeed be feasible.

The only problem? After a tough winter– as you may have heard, Boston had record snowfall at 107.6 inches– is estimated that the MBTA system has a backlog of $6.7 billion in needed work. With this amount of money needed, there aren’t many options.

One option would be to raise revenues or taxes. This could help not only solve existing problems, but tackle ones related to having a robust infrastructure for the upcoming Olympics. Current No Boston Olympics organizer and former MassDOT officer Chris Dempsey said that the pro-Olympics movement has objected to this.

Another option would be to simply address one issue or the other, leaving the other for future resolution. For better or worse, the Olympics would probably go by the wayside if it came down to this. While the Olympics could bring in extra revenue, it also can be a strain on the city, one that is not absolutely necessary.

The train stations that are already starting to undergo improvements include the Red and Orange line trains, along with the Government Center station. Incidentally, these renovations would also be needed if the Olympics were to take place. The expansion of South Station and upgrades on the JFK/UMass station would also be nearly necessary to host the Summer Olympics.

Study Says a Carefully Planned Boston Olympics Could Bring in Billions

As Boston prepares its bid for the 2024 Summer Olympic Games, supporters and detractors have come out of the woodwork. However, according to a study done by The Boston Foundation and the UMass Donahue Institute, the Olympics could bring up to $4 billion to the state’s economy.

According to the study, the bulk of the revenues generated would come from the creation of 4,100 construction jobs during each of the six years needed to ready the city. In addition, the city could see increased revenue during the Olympic Games themselves with tourists adding an estimated $300 million. In addition, the study estimates that another 4,300 temporary jobs will be created just for the span of the Olympics.While the report outlines the economic benefits of having the Olympics in Boston, it also cautions against overspending with the warning that it would offset the economic benefits the Games would bring. Historically, other cities have exceeded their budgets for preparing for the Olympic Games by an average of 252 percent. The report points out that the International Olympic Committee has always exposed the host city to all financial obligations that come with hosting the games.

While the report outlines the economic benefits of having the Olympic Games in Boston, it also raises substantial questions about the fiscal viability of having an Olympic-sized budget for the games.

In addition to concerns with overspending, the report also points out shortfalls in public transportation and infrastructure that would need to be addressed. The report drew no conclusions as to the likelihood that Boston would receive a disproportionate amount of public money to improve its infrastructure. The study was also unable to determine how extensive these improvements would actually be.

Quincy Officials See New Project Jumpstarting Downtown Redevelopment

In recent years, the city of Quincy has demonstrated an impressive commitment to its economic growth and revitalization. It was, in fact, the first city in the Commonwealth to receive District Improvement Financing (DIF), a state program that enabled the city to create a district improvement financing zone in Quincy Center. The plan is to use the newly generated tax revenues from businesses moving into the refurbished district to fund other important city infrastructure projects.

A Master Tax Increment Financing (TIF) program has also been designated for the downtown area since 2005. This program awards those businesses who invest in Quincy Center and create new jobs a 5% local real estate tax exemption.  These businesses also become eligible for a state tax credit.

The City’s downtown redevelopment plan has been in the works for some time and, in contrast to the huge downtown redevelopment plan announced at the start of 2014, the current plan seems financially sound and quite modest in scope. Quincy’s City Council established a new zoning district, increasing the height allowances, easing density and parking requirements, and instituting a streamlined permitting process. This zoning district encourages mixed-use development that should add to the vitality of the downtown.

Quincy Mutual Fire Insurance and Gate Residential Properties are financing a 400-unit apartment building and $100 million retail project which will be the first portion of the redevelopment. Construction on a six-story apartment building containing 169 units will begin in early 2015 with completion targeted for 2016. This building will have 12,000 square feet of both retail and commercial space. A second building will follow which will have retail space and 220 apartments.

The mayor of Quincy, Thomas Koch stated that “Quincy Mutual’s commitment to the city and its persistence in seeing this vision through to reality is nothing short of extraordinary. This plan confirms what we’ve known for some time — that Quincy Center’s potential is ready to be captured. The joint venture between Quincy Mutual and Gate Residential brings together two companies with tremendous expertise and who are committed to getting this project completed”.

Quincy Mutual has been in Quincy since its establishment in 1851. Quincy Mutual President and CEO K. Douglas Briggs also prepared a statement “Quincy is our hometown. More than half of our employees are residents of Quincy and adjacent communities, so what happens here has always been important to our company and the community. We are now partnered for West of Chestnut with a developer in which we have great confidence”.

The news release also included a statement from James Moran the executive vice president of Quincy Mutual: “We have the right team in place, and with Gate Residential we have a developer who fully understands this market and knows how to build projects with luxurious amenities that will appeal to individuals who value easy access to Boston in a relaxed urban environment.”.

Gate Residential, which is a division of Redgate Holdings LLC, also made a statement through its principal, Damian Szary, which said “West of Chestnut offers residents outstanding amenities and vibrant urban living in a historic community, conveniently located on the Red Line. West of Chestnut marks a new chapter for Quincy Center, and we’re excited to announce this terrific team that will build the type of project that will attract a new wave of young professionals to Downtown Quincy.”.

Other companies participating in the project are Graffito SP of Cambridge and Landworks Studio Inc., Sheskey Architects, and Duffy Design Group, all of Boston.

Quincy Center was due for a $1.6 billion overhaul by Street-Works, a developer from White Plains, New York, but the plan was deemed unfeasible and was terminated in April, 2014.

Worcester Chamber to Host Debate of Boston Olympics Bid

The Worcester Regional Chamber of Commerce is about to host a debate discussing the pros and cons of Boston winning its bid to host the 2024 Olympics Games. The debate will be held as two separate functions, and is intended to discuss the possible implications for Worcester should Boston become the host city.

Representatives from the Boston 2024 Partnership, sponsors for the bid to bring the Olympics to Massachusetts, as well as their opponents, No Boston Olympics, will present their arguments to chamber members. This debate will address the potential impacts of Boston becoming the host city and Worcester’s potential level of involvement should that occur.

The discussion will begin on Tuesday, March 10, with opening statements from Richard Davey, former state transportation secretary and CEO of the Boston 2024 Partnership group. He will be discussing the partnership’s plan to run a cost-effective event using private funds, existing facilities and temporary venues. He will also discuss the organization’s belief that hosting the Olympics will greatly contribute to the commonwealth’s long-term growth.

On Friday, March 13, the debate will continue with statements from Chris Dempsey and Kelley Gossett, co-chairs of No Boston Olympics. The group believes that a pattern of overspending, years of construction, and few proven economic benefits for past host cities, make hosting an undesirable choice for Boston. They will discuss their view that the state should maintain its budgetary focus on schools and rebuilding transportation infrastructure.

A first time bidder in the Olympics, Boston beat out other major cities such as Los Angeles, San Francisco and Washington D.C. to become the official U.S. entrant. While its bid is heavily dependent on the use of existing facilities such as Gillette Stadium and the TD Garden, several venues would have to be constructed before Boston could host an international event on the scale of the Olympics.  This list would have to include – at a minimum – a temporary stadium able to seat more than 60,000, a velodrome, and an aquatics center.

Boston’s bid was privately funded by the Suffolk Construction Company, and has continued to gather more than $11 million in private funds.

Unfortunately, attendance for these debates is restricted to Chamber members only and will not be open to public. If you are unable to attend, watch this space for further details as they become public after the debates.


Worcester Chamber Looks at Springfield Casinos as Model


Downtown_Springfield,_MAIn what could soon become a blueprint for other regions to follow when planning for urban development, the proposed MGM Springfield casino is being set up to embrace its surrounding community rather than shut it out or physically divide it. According to James Murren, Chairman and CEO of MGM Resorts International, their $800 million casino project planned for Springfield’s South End hopes to establish a new model for the company’s casino communities.

One person closely watching the situation is the President and CEO of Worcester’s Regional Chamber of Commerce, Timothy Murray, who says, “Their vision is to create a new paradigm that’s outward looking and encourages the kind of cross-pollenization of locally owned businesses.”

Murray’s interest in the nearby project is directly related to Worcester’s $565 million CitySquare development project that is still under design. The hope is that the hotels and other needed developments in the downtown area for this project will be assessed carefully.

Murray, former mayor of Worcester as well as the Commonwealth’s former lieutenant governor, compared the potential of this project to those of the past. According to Murray, instead of opening up new possibilities, a project may end up dividing the city like the Worcester Center Galleria ended up doing. During his time as Mayor of Worcester, Murray oversaw the demolition of that mall, the space it once occupied now being used for the CitySquare project.

Muuray said the project, “is about undoing what the mall created and creating a true mixed-use district.”  It’s hoped that MGM Springfield will similarly embrace its surroundings and not  simply create an obstruction to community use of an urban area.