If there ever was a time to put the pedal to the metal on zoning reforms and planning efforts, it’s now.
As Scott Van Voorhis outlines in his column this week, first-quarter earnings reports from several local and regional banks that have been tentpoles of the local development scene have put paid to the idea that we’ll see a rebound in easily accessible financing for real estate projects.
It could be several quarters until this gets sorted out, especially if a recession hits this year. The industry is also being forced to wait until interest rates come down enough to help multifamily projects, in particular, pencil against high construction labor costs.
Each day without accelerating housing production is a loss for Massachusetts’ workers, retirees and children. But that said, there’s no reason we can’t come out of this rough patch ready and raring to make a serious dent in the commonwealth’s housing needs.
To do that, towns and cities should aim to have their MBTA Communities-compliant zoning reforms finalized by the end of this year, or at worst teed up for passage in the spring Town Meeting cycle.
As we’ve noted many times in this space, driving down the cost of permitting by letting multifamily be developed as-of-right on realistically-sized parcels with realistic dimensional restrictions can be quite impactful. Whether you think affordable housing or market-rate housing should be prioritized, this is a necessary first step to both.
But the other big contribution rezoning can have, if done right, is seriously boosting the supply of land available for multifamily development. This isn’t just about growing the number of multifamily projects – it’s also a way to drive down the cost of land both market-rate and affordable developers must pay. If a town only has five sites that are big enough to host a 40-unit multifamily building, there’s going to be stiff competition for them. But if that number suddenly blossoms to 25 sites or even 50, suddenly each landowner has a lot less ability to jack up their prices because they know the developer they’re negotiating with can always go next door.
This is the biggest argument for avoiding what seems to be Newton’s chosen path – getting so cowed by anti-development voices that new multifamily zoning districts are shrunk so far as to only generate minor increases in density – and following Lexington’s lead instead. While the latter’s plan has its problems, like rezoning a brand-new fire station for multifamily uses along with the grocery store across the street, its overall effect is laudable.
So, to our readers in municipal government: Get on your horses and ride. The market has given you a window where you can undertake planning without quite so many new development proposals breathing down your neck. Push forward, secure in the knowledge that zoning for more neighbors is the only sure way to lower costs for everyday Bay Staters and reverse the racist legacy of exclusionary zoning.
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