Boston’s next mayor will inherit a slew of issues affecting the city’s commercial real estate leaders.
Four elected officials are vying for Mayor Martin Walsh’s seat, as the development-friendly leader awaits an expected confirmation to become the next U.S. Secretary of Labor. Small but steady office and multifamily developer dollars have already backed candidates whose platforms currently are light on policy pitches eight months away from polling.
Major commercial real estate priorities for the next administration include advancing affordable housing, carefully handling a life sciences boom and leading an economic rebound in the city’s business districts decimated by the coronavirus pandemic, industry leaders said. While some hopefuls have a track record of housing reform efforts, only one has laid out a large plan that would directly impact all levels of commercial real estate in Boston.
Democratic City Councilor Michelle Wu penned a 76-page “Abolish the BPDA” memo in 2019 calling for zoning reform and increased city council oversight of development, and helped lead the council’s fight to harshly regulate Airbnb, which drew a targeted attack from the short-term rental company.
Wu and Andrea Campbell have amassed war chests approaching $750K as of February and have built platforms focused heavily on the city’s housing woes. Campbell, campaigning on police reform, authored the 2016 Community Preservation Act which last month guided $13M to affordable housing.
Councilor Annissa Essaibi George, who jumped into the fray in late January, is a former educator and small-business owner, married to a local multifamily developer. The candidate has yet to present a specific platform, but in last week’s city council meeting made calls for transparency in the city’s development process.
State Rep. Jon Santiago, who represents parts of the South End, Fenway and Back Bay, announced his campaign last week. An emergency room doctor at Boston Medical Center and a U.S. Army Reserve captain, he has sponsored numerous bills aimed at boosting affordable housing efforts statewide.
Interim mayor-in-waiting City Council President Kim Janey, who will become the city’s first woman and person of color to lead City Hall, has been mum on plans to run. The cousin of Janey Inc. founder Greg Janey has no recorded mayoral contributions, which are capped at $1K for individual donors. February financial reports are likely to be filed this week.
City watchdogs, developers and industry representatives Bisnow spoke to this month said it was premature to discuss individual candidates, but all highlighted increasing the city’s affordable housing supply as a priority. Walsh, whose office often touts affordable housing achievements, recently pitched a hike on linkage fees, or city payments or affordable housing and workforce training, for projects 100K SF and up. The proposed 42% hike would have cost developers an extra $22M had it been implemented in 2020.
“Continuing to expand the pie for resources to support affordable housing development is really critical,” Roxbury-based Madison Park Development Corp. CEO Leslie Reid said. “Streamlined permitting and regulatory approval. When we talk about equitable development, equitable development is when affordable housing goes faster.”
The MPDC has seen underdevelopment in its own backyard, while developers have plowed forward on luxury condos as the city’s average rental burden has gone up. Plans for a residential tower in Chinatown with affordable units have been on pause as the city allowed Millennium Partners to downsize its funding commitment for the tower, a requirement stemming from their billion-dollar downtown skyscraper.
Wu’s memo is filled with footnotes of examples of developers changing their plans after receiving approval, and last August she led the rejection of Walsh’s nominees for a city zoning board in a stark rebuttal of the mayor’s development policies.
“There can be some mechanism or pipeline approach to speeding through the approvals for affordable housing, including making adjustments to zoning where it’s necessary, or opportunities, to find ways in encouraging the development of as much affordable housing,” said multifamily developer and Wingate Capital Associates President Jeff Goodman.
Goodman in January donated $1K to Campbell’s campaign, which has publicly pledged to address the more than 1,000 vacant plots owned by the city’s Department of Neighborhood Development. Of CRE dollars given to candidates, Campbell shows approximately $5K from Boston-region-based residential real estate agents and developers, including$250 from Yanni Tsipis, vice president of the massive Seaport builder WS Development.
Wu, who scrutinized WS Development’s Seaport actions in her memo, counts nearly $11K in donations from the real estate industry in and outside of Boston, notably a $1K donation from local hospitality giant and Big Night Entertainment principal Edward Kane.
None of the candidates have directly addressed the lab development boom that has taken over the development of South Boston, the Seaport, Fenway and Allston, as the nation’s biggest life sciences developers have poured billions into the market.
Campbell, Essaibi George and Wu all voted to authorize an upcoming expedited committee discussion into increased life sciences oversight but have not made public statements regarding the rise in lab projects. Community concerns regarding speculative lab builds have begun to emerge in South Boston and the Seaport, but developers and business leaders say the industry should be welcomed as a creator of high-paying jobs.
“First of all, we need to be reminded that lab space, and the demand for lab space, is absolutely aligned with what’s helped us and what will move to help us out of this pandemic,” said Richard Dimino, president of infrastructure policy organization A Better City and a former city transportation head. “We have a responsibility to do that in a fair, thoughtful, balanced way, but to not find a way to embrace it would be really inconsistent with our own good.”
“These businesses like to be in clusters because of the kind of innovation and community characteristics as being close to one another,” Dimino said.
Life sciences and the struggling hospitality and retail sectors haven’t yet put significant money directly into the mayoral campaigns, but a revitalization of the struggling downtown should be a primary focus for the next mayor, industry leaders said.
“Whether it’s coming into the office and having lunch with co-workers or seeing a show, that is such a critical component of the entire city of Boston,” NAIOP Massachusetts CEO Tamara Small said. “For our industry, that’s a top priority, recognizing that commercial real estate is far more than just buildings.”