Middle class life is increasingly under siege in Greater Boston, and not just from crazy home prices, as maddening as they are.
Our increasingly traffic-jammed roads and creaky, overstressed train and subway lines have turned even simple commutes into grueling ordeals. And the impact of our growing gridlock can be seen in a very interesting statistic – the dramatic rise in popularity of new office and commercial developments near subway and commuter rail stations.
The amount of vacant office and lab space within 15 minutes of a train or subway station in the Boston area is a super-low 7.4 percent, according to a new report out by Encompass Real Estate Strategy Inc. By contrast, the vacancy rate in corporate suites and labs beyond that 15 minute radius is nearly double that, weighing in at 13.8 percent, finds the report, Node 2016.1.
Companies are not just battling it out for the best and brightest these days; they are also desperately fighting for a spot closest to the nearest train station as the region’s transportation network goes from bad to worse.
After all, if your employees can’t get to your office or lab without an exhausting commute, you are headed for trouble.
“An accelerating requirement from many tenants to be able to provide accessible workspaces is showing up in all the numbers,” said Brendan Carroll, director of intelligence at Encompass. “The development community is being forced to adjust their focus to address what is becoming a mandatory requirement for many tenants.”
Transit-oriented real estate has made the biggest gains since the end of the Great Recession. Vacancy rates have fallen across the board in the office and lab markets over the past five years, but they have dropped the fastest for office buildings and labs near public transportation.
Overall, companies have gobbled up more than 10.4 million square feet of empty space near rail and subway stations, Carroll notes. That’s enough to fill 10 Prudential towers.
And developers have jumped on the bandwagon. While roughly half of Greater Boston’s existing lab and office market is near public transportation, nearly 70 percent of all new projects under construction fit the bill. That’s 3.7 million out of 5.3 million square feet of new lab and office space currently taking shape in Boston, Cambridge and beyond, including all of the seven top largest projects, Encompass finds.
TOD Fever
The conventional explanation – and it’s certainly right to some extent – is that high-tech, biotech and other New Economy firms know they need to set up shop near rail and subway stops to recruit young talent.
Today’s carless and increasingly urban Millennials have no interest in trekking in everyday from the suburbs, or so the argument goes. If you are some hot tech startup, the last thing are going to do is set up shop in the public transportation desert on 495.
Not coincidentally, the same argument is being made by boosters of transit-oriented apartment development. Millennials aren’t interested in living out in the suburbs, so no need to bother all that much with building supposedly outmoded single-family homes in the suburbs.
But this argument conveniently ignores huge student debt loads that make buying more difficult for the rising generation, as well as the fact that there are few if any affordable homebuying options in the suburbs that don’t require exhausting commutes.
Yes, there are lifestyle choices being made by 20- and 30-somethings that developers of both new corporate digs and new apartments are responding to. But too often the bigger picture is being overlooked or, in some cases, ignored because it doesn’t fit into the agenda of activists pushing transit-orientated development – or TOD, as it is called – with what amounts to ideological fervor.
No Relief On The Roads
And the bigger picture here is that these are trends that being driven as much, if not more, by sheer necessity as by lifestyle desires and vague desires to be more environmentally conscious.
For companies looking to recruit the best talent out there, whether 20-somethings or 40- and 50-year-olds, finding a location employees can actually get to without burning out half the week commuting is increasingly difficult. By moving to a new building near public transit, you expand the pool of potential employees and double the transportation options available. That’s crucial given the increasingly woeful state of transportation – both public and private, road and rail – across heavily congested Eastern Massachusetts.
Our region’s main highway for commuters, Route 128, has been overloaded for years, with more traffic on the way amid a building boom along the highway. Getting into Boston from the South Shore on Route 3 is a nightmare, and undoubtedly reflected in the region’s relatively lower home values compared to the western and northern suburbs.
Our local roads aren’t much better, with secondary roads and suburban town centers invariably clogged with traffic just about any time of the day.
On top of all that, the best that can be said of the MBTA right now is that it is barely adequate, if that. Gov. Charlie Baker has done a good job whipping a bad system into some sort of shape, but commuter rail trains are still reliably late and jammed and subway service isn’t much better.
And given a budding state deficit and a threadbare T budget, there is little extra money to go towards expanding the current system, with plans to extend the Green Line into Somerville now hanging by the thinnest of financial threads.
Waxing poetic about the virtues of transportation orientated development is all well and fine. But the trend is being driven a lot more by hard-nosed reality than car-hating, anti-sprawl activists would care to admit.
