Greg Vasil

The optimists and pessimists gather around at year-end and always seem to find good reasons to carry on with their sunny or cloudy dispositions. The truth, as with all things in business and real estate, tends to land in the softer and less comfortable middle.

This year did not bring half the success we wanted, but the successes we did see brought hope to build upon at the state and local level. But the warning signs of outrageously bad ideas to “solve” the housing crisis in particular leave us concerned and primed to ensure decision-makers know exactly what’s at stake.

The year brought significant market fluctuations, policy changes, proposed measures still under consideration and headlines pointing out the sharp reality of our housing crisis.

Here’s something worth remembering, though. The fact of the matter is, we are five years out since the start of the pandemic, and the effects on the real estate industry are still widely felt. There are signs that the state sees those negative impacts and is willing to act to support those who rely on the residential and commercial real estate community.

Bright Spots in Housing

Thanks to the Healey-Driscoll administration, the state saw significant changes in the way home inspections and broker fees are handled in the commonwealth.

In June, new standards on home inspections were announced (effective in October), which protect homebuyers by prohibiting sales where a home inspection is waived and which prevent a home seller from accepting an offer on their home if they know the buyer intends to waive their right to an inspection.

Effective Aug. 1, the state also clarified the rules around broker’s fees, ensuring that whomever hired the broker for a sale paid the fee. This ban, approved by the Legislature and signed by the governor within the state budget, prohibits landlords of residential rental properties from requiring tenants to pay broker fees, but allows tenants or landlords who hire brokers to pay those fees.

Another bright spot for residential housing construction was the legalization of accessory dwelling units across the state, allowing seniors on fixed income, young people and others to build or utilize more reasonable housing.

Throughout the year, we saw residential costs continue to hover, on average, at or above $1 million – so we know we have work to do.

CRE Still Needs Help from Government

On the commercial side, the struggle continued. Property values continued to fall and occupancy rates have not rebounded from the pandemic.

While many suggest simplistic answers such as converting commercial land to residential property, the reality is that doing so remains incredibly costly and more significant government help will be required to further these goals, especially with tariffs and related construction costs remaining barriers to construction.

As the year wound to a close, regulators focused on proposed changes designed to cut back on environmental regulations to fast-track housing development.

We were among those who praised these Massachusetts Environmental Protection Agency regulations as a vital step forward, but also advocated that the state should consider far greater flexibility with respect to density, floodplain and stretch energy code to truly reach the state’s goals.

As always, our industry found itself fighting against wrong-headed ideas that will stifle development and only increase costs, including Boston Mayor Michelle Wu’s proposed transfer tax and rent control proposals.

Rent Control Threat Looms

Turning the corner into 2026, rent control remains the existential economic threat to the commonwealth.

It appears that proponents of the most aggressive forms of rent control may succeed in putting a proposal similar to one adopted in St. Paul, Minnesota on the statewide ballot next November.

Our industry is united in our opposition to this retread of an idea that will only hurt consumers, property owners and renters in the state. It will also destabilize our economy and significantly impact local budgets and tax rates.

In the meantime, we will of course continue to advocate for solutions we know will work – encouraging new housing in MBTA communities, supporting fair housing efforts and allowing communities to utilize Community Preservation Act funds to support more reasonably priced housing.

Greg Vasil is the CEO of the Greater Boston Real Estate Board.