Foundation for Growth Blog

The case for regional funding of public transit

Fri, 16 Dec 2011 00:00:00 EST

MassInc’s recent report on new funding strategies for transportation makes the case for overhauling how we fund public transportation.

Written by Ben Forman, Dan Darcy and James Emilio, the report warns that continuing to fund public transportation via sales tax revenues will ensure that the Massachusetts Bay Transportation Authority (MBTA) will continue to run up large deficits and will continue to get a disproportionate share of state revenues, thereby preventing Regional Transit Authorities from making the necessary investments they need to improve their public transportation systems.

The report proposes that a regional payroll tax or a tax on miles driven would enable the MBTA to close its operating deficit and make necessary improvements while generating increased revenues so that Gateway Cities could invest more funds in public transportation.

Financing transportation regionally gives strong incentives to work to align their regional planning and land use decisions to maximize the economic impact of these investments.

Right now, the report argues, increased spending for transportation is a non-starter because much of the state resents the fact that most of public transit dollars go to Boston. The report says shifting to a regional approach would be better.

The report warns that failing to address how to adequately fund transportation could stunt our economic growth and recovery. The report notes that between 1980 and 2010, per capita income in Greater Boston grew 1.8 times faster than in metro areas nationally. And while Boston is the nation’s 10^th largest metro area, the region has the nation’s fifth largest transit system, measured by ridership.

The T was an asset that supported the region’s economic success but it did not benefit from this success in terms of capturing the revenue needed to sustain and grow its operations.

…it is increasingly clear that unsustainable finances imperil the MBTA’s ability to continue to buttress regional economic growth.

With a regional approach to funding, the report argues that the MBTA would have the resources to keep pace with economic growth and Gateway Cities would have the assets to support its own economic growth.

Stronger service in communities like Brockton and Lowell could make the broader regional economy more productive.

An executive summary and the full report can be found on the MassInc web site.

McMorrow sees acute shortage in rental housing

Tue, 29 Nov 2011 00:00:00 EST

Commonwealth Magazine Associate Editor Paul McMorrow reads the recent census data and sees evidence of an acute shortage of rental housing in Greater Boston. McMorrow wrote in a Nov. 22 Boston Globe op-ed piece:

A decade ago, 40 percent of Suffolk County residents were sinking more than 30 percent of their incomes into rent, a threshold that federal policymakers consider to be unaffordable. Now, half of the county’s renters are paying unaffordable rents. A quarter of Suffolk County residents are devoting more than half their income to paying rent - a number that’s risen significantly over the past decade.

McMorrow sees the same phenomenon at work in Middlesex County, where housing producton has fallen off dramatically or has been limited to single-family homes.

In Middlesex County, roughly half of the new housing built over the past decade were single-family units. And development in key transit-rich cities has ground to a halt. Between 2008 and 2010, housing construction in Cambridge fell off its mid-decade pace by 92 percent; it fell by 87 percent in Medford, and 97 percent in Malden.

Local director worries about housing cost/wage gap

Wed, 12 Oct 2011 00:00:00 EDT

In an opinion piece for the local paper, Plymouth's community development director, Bruce Arons, is worried about the lack of affordable housing given that wages have not kept up with the high cost of housing, even though prices have dipped lately. Arons notes that 44 percent of Plymouth's homeowners use more than 35 percent of their income on housing while renters in town use on average 44 percent of their income for housing. And he looks at the current job climate and knows Plymouth is going to need more housing that's affordable:

Low- and moderate-income working households in Plymouth are facing a severe housing cost burden. Recent studies show that “high-tech” jobs are not eliminating traditional occupations that pay traditional wages. Retail salespersons, nurses, maintenance/repair workers, schoolteachers, security guards, hairdressers, administrative assistants, stock clerks, child care workers and firefighters (all traditional occupations) are on the U.S. Department of Labor’s list of occupations with the largest projected job growth for the next decade. This means a large number of working families will continue to earn their incomes from these and other traditional occupations with similar earnings.

The point being, having a job does not guarantee a place to live at an affordable price. Low- to moderate-income workers simply do not earn enough. In recent decades, home prices and rental rates have increased faster than income in most parts of the country, increasing the need for affordable housing. Many of the people you see every day – your child’s teacher or childcare worker, the clerk employed at the local store, the elderly man on the bus, a police officer, custodian, office worker or waiter.

For low- to moderate-income working families, high housing costs are a difficult option that requires major compromises such as shortchanging pensions or savings, becoming indebted or living in homes that are smaller or more expensive than they desire. The gap between what people can afford to pay for housing and the cost of housing is widening – and a major cause of concern, especially here in Plymouth.

Using the courts to stall growth

Tue, 27 Sep 2011 00:00:00 EDT

Regular Boston Globe op-ed page contributor Paul McMorrow points out another example of how the courts are used to stall development when he writes about the Town of Holliston's three legal challenges to a development proposal to build 200 mixed-income condominiums. Holliston has lost all three but has managed to stop a development that first came before the town seven years ago.What irks McMorrow the most is that in many respects the development should be a no-brainer:

It’s the sort of development project that should appeal to a wide range of constituencies. It would bring some density to the western suburbs, where large-lot zoning has long been used to constrain growth. It would put a polluted former dumping ground back into productive use. And it would add 50 moderately-priced units to a town where just over 3 percent of the housing stock is affordable.

The Town of Holliston has challenged the development by trying to enforce its own wetland bylaws, which are stricter than the state's, and by challenging the developer's plans to finish the cleanup effort, which the town says is vague.

Land use proposals a good start

Tue, 02 Aug 2011 00:00:00 EDT

In testimony before the legislature this spring, MHP's Clark Ziegler said proposals to change the state's land use laws are a good start but don't go far enough to address the state's perpetual lack of housing production and corresponding slow growth. MHP's executive director advocates for a more comprehensive growth proposal that would include the creation of an office of state planning and the establishment of state and regional growth benchmarks that set clear expectations about how much housing is needed to sustain the state's economy. Ziegler testified:

The problem in a nutshell is that our 351 cities and towns, each with their own zoning codes and land use regulations, make decisions based on their own perceived interests. That is not how it works in most other states, where land use decisions are made at the regional level or where local decisions must be consistent with regional or state plans. It is widely accepted that Massachusetts needs to be an attractive place for families to live and for employers to expand and create new jobs, yet in our own individual cities and towns we typically make decisions that achieve just the opposite. We require mammoth building lots to limit the amount of housing that can be built, try to minimize the number of kids in our schools, and make it clear that while we recognize the need for housing in theory, we want it to happen in some other community.

In our view, the stage needs to be set now for a far more comprehensive examination of state growth policy. Toward that end, MHP has initiated a multi-year research and policy analysis project -- called Foundation for Growth -- to better understand the connection between housing, jobs and the state economy and to propose state growth policies to strengthen that connection.

To read Ziegler's entire testimony, click here.

Goodman: Zoning for housing big key to job growth

Fri, 22 Jul 2011 00:00:00 EDT

In his blog, Mike Goodman of UMass Dartmouth summarizes his response to questions by industry leaders about what policy changes would have the greatest impact on growing jobs in Massachusetts.

At the top of his list is to rewrite our archaic zoning regulations so that Massachusetts can build the housing it needs to grow its economy. Goodman writes:

While the housing market in Massachusetts remains moribund, the Commonwealth still has thousands fewer housing units than are required for a healthy market given expected job and population growth. This structural shortfall serves to keep housing less affordable and makes it more difficult to attract and retain the next generation of workers and their families. If the Bay State is able to add jobs more rapidly than is expected, this shortfall will only grow larger absent key policy reforms.

Goodman thinks providing incentives for communities to grow is the solution.

Ideally, reform would focus on the state laws that govern zoning and land-use regulations and provide clear incentives for communities to participate in programs that promote responsible and sustainable commercial, industrial, and residential growth patterns including expedited permitting programs . Mandatory training for local officials that have oversight of land-use would also encourage a more informed and professional approach to development decision-making at the local level.

Zoning for backyard cottages taking hold in Seattle

Thu, 30 Jun 2011 00:00:00 EDT

The cottage home concept hasn't had much luck getting off the ground in Massachusetts. But it is gaining momentum on the West Coast. Seattle's decision to expand a pilot programming allowing the construction of backyard rental cottages is paying dividends. Fifty-seven smaller homes have been permitted since the zoning policy was expanded from a few neighborhoods to across the city back in 2009. And one urban policy expert told Governing Magazine that permitting cottages is a good way for cities to increase density without radically changing neighborhoods.

“Cities are struggling with, ‘How on earth do you increase density in a suburban neighborhood of single-family homes?’” says Witold Rybczynski, an urbanism professor at the University of Pennsylvania and the author of Makeshift Metropolis and other books on urban planning. “The backyard cottage is an easy first step toward densification (and) an effective way to increase density without a radical change in neighborhood standards.”

The purpose of the zoning is to provide badly needed affordale housing without chewing up more land. Seattle’s code limits cottages to a footprint of 800 square feet, and they max out at 22 feet tall. Construction costs typically range from $50,000 to $80,000, although more elaborate units can cost upward of $140,000 to build. Landowners are required to live in the main house or the cottage for at least six months out of the year.

When the pilot program was launched back in 2006, neighborhoods voiced concerns about parking, larger cottages dwarfing small lots and how backyard rental cottages might change the feel of the neighborhood. But a city survey found that 84 percent of the residents near these new cottages did not impact traffic or parking.

How much more housing do we need to build?

Wed, 01 Dec 2010 00:00:00 EST

We constantly hear that the state does not build enough housing and that results in high prices and loss of jobs. So, how much more housing do we need to build to keep and add more jobs here? The UMass Donahue Institute has tried to answer this question.

In a 56-page report commissioned by the Foundation for Growth and the Massachusetts Housing Partnership, UMass estimates that if current trends continue, we'll grow at a rate of 2.7 percent and add 87,000 jobs to the economy. Housing construction between 2010 and 2020 is expected to add 170,000 new homes. This would create a statewide shortage of almost 30,000 units (46,000 in Metro Boston with overbuilding in other parts of the state). The shortages are based on the vacancy rates necessary to have a stable, healthy market.

UMass also estimated how much housing we would need if Massachusetts were to add three times as many jobs. Here's the key number:

A healthy construction response, with no housing shortages, would require 340,196 new housing units between 2010 and 2020. This is 169,700 more housing units than current construction trends predict by 2020.

So, if Massachusetts were to adopt growth policies to allow for more housing production, this is a potential number they would need to strive for.

Recovery barriers in place

Mon, 26 Jul 2010 00:00:00 EDT

Remember our Recipe for Growth analysis of 242 metro areas? In this study, economist Ed Moscovitch found statistical evidence that production of new housing was a pre-requisite for job growth. In other words, cities that enjoyed economic growth early in the century had a flurry of building activity in preceding years. Well, if that’s the case, then Scott Van Voorhis says that there are many barriers in place to prevent Massachusetts from building its way out of this recession. In a recent Banker & Trademan column (subscription required), Van Voorhis observes:

(The) issues of new stretch energy codes, anti-40B legislation and permit extension serve to encapsulate all the barriers the Bay State still faces if it seeks to build itself out of this recession.

Smith: Cities can tell us what kind of housing we need

Fri, 09 Jul 2010 00:00:00 EDT

David Smith is excited about the Brookings Institution's new report, The State of Metropolitan America. In an excellent summary of the 100-plus page data rich report, Smith says it redefines the United States as a United Nation of Cities and says it is useful in anticipating the types of housing that will be needed to ensure that cities continue as the main engine of our economic growth. Smith writes:

Despite our frontier heritage and ethos, America is predominantly a nation of cities, and we are becoming even more a nation of larger, more complicated, and more interconnected cities.

And if housing is what keeps cities from being nothing more than extended shopping malls and office parks, then if we want to foresee the shape of multifamily residential properties, we ought to understand where and how our cities will grow. If we can envision where the jobs and people will go, we can project what housing they will need, want, and be able to pay for.