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In addition to these external competitive forces, Boston and other municipalities in the region face an array of internal challenges that cause competitive disadvantages in comparison to other regions and figure mightily on residents’ decisions to stay or go.
CONFRONTING THE HIGH COST OF LIVING
A Rising Consumer Price Index
Metro Boston’s Consumer Price Index has risen faster than the national urban average in each year between 1997 and 2003. Rising costs across the spectrum of necessities on the index—from housing to health care to staple foods to transportation and home heating oil—have made Greater Boston one of the most expensive regions in the US, putting additional stress on families and households already living through an economic downturn and jobless recovery. Massachusetts also has among the highest tuition and health care costs in the country. According to the think tank MassINC, a 2003 survey published as The Pursuit of Happiness revealed that, “One quarter of Massachusetts residents polled said that they would move out of state if they had the opportunity, with 49 % rating the state’s quality of life as either ‘fair’ or ‘poor.’ Personal finances and the high cost of living were dominant concerns. The number one reason for wanting to leave was to go somewhere with a lower cost of living or lower taxes.”
The Stubbornly High Cost—and Short Supply—of Housing
The high cost of housing in Greater Boston remains the single most vexing issue for many state residents, newcomers and those interested in moving to the region. A University of Massachusetts poll found that in 1999, 11% of state residents have considered leaving the state due to high housing costs. By December 2004, 46% of Massachusetts’ residents said that they or members of their immediate families had considered leaving the state because of the high cost of housing. Employers also cite housing costs as their number one concern when it comes to attracting and retaining a qualified workforce.
The City of Boston—with 22% subsidized housing units— contains almost twice the percentage of affordable housing as the few suburban municipalities that meet the state’s 10% affordability goal. Greater Boston’s housing prices are among the priciest in the nation. Since 1997, median sales prices have soared 81% in the state and 109% in Boston. While median asking rents in the city are down 18% from their 2001 peak, most of the decrease is in the top end of the rental market, while lower rents continue to climb. Overall, rents in Boston are 50% higher than in 1995.
Throughout the 1970s and 1980s, new housing starts more or less kept pace with population growth, but the rate of housing production dropped in the 1990s, and since then has not kept up with growth rates in population or with the increase in single-person households. The Center for Urban and Regional Studies at Northeastern University estimates that over the next 10 years, the region will need to add at least 30,000 new housing units over and above current production levels in order to bring housing supply into line with housing demand. A new state law passed in 2004, Chapter 40R, encourages production of “smart growth” housing through the use of zoning overlay districts in city and town centers and at transit nodes. But until municipalities start taking advantage of the new law, production will continue to fall short.
Housing issues divide residents of the region into multiple factions: the overcrowded or homeless versus those living large; renters versus owners; homeowners who bought low versus those who bought high; urban versus suburban residents; and municipalities that welcome children versus those wishing to keep them out. Without concerted and sustained action, housing issues will continue to fracture the region’s political will and to stall economic growth.
ADDRESSING GROWING INEQUALITY
A Widening Earnings Gap
In 2000, Massachusetts ranked among the least egalitarian states in the nation with respect to income distribution, according to the Center for Labor Market Studies at Northeastern University, largely because gains from the knowledge economy in the 1990s were not as widely shared in Boston or the Commonwealth as they had been in the 1980s. The Center found that between the 1990 and 2000 census, full-time male workers in Massachusetts in the bottom 40th percentile lost ground; those in the middle made modest gains; but those at the top enjoyed dramatic increases, with a 25% gain for the top 1%. In Boston and the Commonwealth, these dramatic differences in earnings closely track educational attainment levels. Between 1990 and 2000 in Boston, those with less than a bachelors degree saw very modest gains, or even losses, in income, while those with a bachelors degree or higher saw their incomes rise by more than 20%. And because people tend to choose spouses with similar educational backgrounds, two-earner households in the Commonwealth compounded the rate of return from educational attainment—compounding income inequality as well. This widening income gap creates very different realities for those with good educations, who are fast pulling ahead, and those with less education, who are falling further behind.
Uneven Educational Quality and Access
With educational attainment as the key predictor of lifetime success in the knowledge economy, educational opportunity has become a civil rights issue. It is generally acknowledged among national education experts that Boston now leads the nation among large urban school districts on progress in education reform. Boston’s schoolchildren in nearly all grades are improving in proficiency of the MCAS tests faster than the statewide average. However, Boston and other urban districts with disproportionately large low-income and immigrant populations have far fewer students who are achieving “proficient” or “advanced” test scores when compared with higher income and more homogeneous suburban school districts.
Children’s school performance also often reflects their parents’ educational attainment levels. MassINC estimated in 2000 that about a third of Massachusetts’workers lack adequate training and the literacy skills to compete for jobs in the new economy. A large percentage of those with less educational attainment are immigrants and others at historic disadvantage. Despite the critical importance of workforce training and literacy, the state’s workforce development and adult basic education systems have been fragmented and underfunded, and those without literacy skills cannot easily gain access to adult basic education and English as a Second Language classes.
And perhaps because of an historic reliance on private universities to supply the region’s educated workforce, the budget for the Commonwealth’s public higher education system has been sharply cut, while fees and tuition costs have risen. According to the Massachusetts Budget and Policy Center, funding for public higher education in the Commonwealth has declined by $275 million, or 23%, since 2001, even taking into account the slight increase of 4% this fiscal year.
The good news is that a number of remedies are on the table: early education for all; an increase in the length of the school day; charter schools and more school choice; support for failing schools; more teacher training; improved math and science instruction; increases in the state’s higher education budget; and more coherent workforce training. However, rather than being seen as essential components of a seamless system of educational excellence for all, each initiative is forced to compete with others for available resources.
CREATING NEW POLICIES FOR A NEW ERA
Too Many Eggs in Too Few Baskets?
Between January 2001 and March 2004, Massachusetts lost more than 6 % of its jobs, the biggest drop of any state in the nation, with about half of them in high tech sectors. Although about 20,000 new jobs were created during that time—most in health care and education— altogether about 195,000 jobs have disappeared since 2001. Thinking ahead, many point optimistically to projected job growth in industry sectors such as life sciences, which currently accounts for less than 2 % of jobs in the state, and nanotechnology, an area in which Greater Boston is shaping up to become a major center. But these sectors, while essential to future growth, will require and draw highly educated specialists from elsewhere. These sectors also may prove to be as mobile and subject to “off-shoring” or consolidation as other high tech sectors are proving to be. To broaden the prospects for job creation and economic competitiveness, the think tank Mass Insight is calling for investment in the Commonwealth’s public universities to spur innovation and create rooted partnerships with private universities and local industries.
Trading Manufacturing for Service Jobs
The Center for Labor Market Studies and others predict that the largest number of future jobs in the Commonwealth may lie in both high and low-paid service sectors. Manufacturing jobs—which have been decreasing in the Commonwealth for decades—further shrank from about 408,000 in 2000 to approximately 323,000 in 2004. Along with the jobs went skill sets vital to a broadly prosperous economy. To counteract that trend, the Center proposes strategic investment in technical education and workforce training. Likewise, the City of Boston has identified what it calls “Back Streets” employers in the manufacturing, wholesale, commercial services, logistics, food processing and building/contracting sectors that are critical to its economic base. Boston currently has more 4,000 “Back Streets” businesses, which generating 100,000 jobs—many with salaries two to three times higher than service jobs. Retaining these jobs will be a challenge, since 13% have left the city over the past decade.
Congestion in “Generica”
Automobile ownership and vehicle miles traveled in Boston and the region alike have far outstripped population growth, reflecting a mismatch between jobs and people, and resulting in more congested roadways. Throughout the region, high land and housing costs are pushing development to the region’s edge, bypassing older industrial cities and neighborhoods. Commutes are longer; creative and family time becoming rare; and vehicular greenhouse gas emissions increasing. At the same time, development is consuming productive agricultural land and distinctive natural landscapes at a rate of about 40 acres a day. The stakes are high and rising. Competitor regions are developing the kind of healthy, livable communities we appear eager to lose. The authors of last year’s Boston Unbound report for the Boston Foundation ask the essential question: “If the Boston region starts to look like Anywhere USA, combined with an extraordinary cost of living, why pick it?”
Growing Dependence on Imported Fossil Fuels
While a number of regions are investing in renewable energy research and production, New England has become one of the least self-reliant areas in the world. California has signed an agreement with nine other Western states to increase renewable energy supply and drive innovation. While Massachusetts has adopted a law requiring the percent of energy generated from renewable sources to increase from 1% in 2003 to 5% in 2010, the European Union is committed to a goal of 20% of energy from renewable sources by 2020, and China has committed to obtaining 10% of its power from renewable sources by 2010. Japan is already using solar energy to fulfill some of its energy needs. Boston is leading the way within the region, with a new “green” building code as of 2004 and signed agreements with regional partners to reduce energy consumption.
Competing Infrastructure Demands
The Big Dig notwithstanding, the Commonwealth lags other regions in its attention to its roads and bridges. The American Society of Civil Engineers reports that 61% of Massachusetts’ roads are in poor or mediocre condition, and 51% of bridges in the state are rated structurally deficient or obsolete. The state may also be in legal violation of agreements to extend public transit to inner core communities. Older industrial cities throughout the region are requesting new or more frequent commuter rail service to create connections to the mainstream economy. A group of six Boston-area communities have joined together to call for investment in a circumferential Urban Ring that would link its residents to jobs throughout the inner core communities and provide opportunities for new smart growth housing and mixed-use development. However, the MBTA is challenged to keep its plant and equipment in a state of good repair, its debt service consumes one-third of the operating budget, and there is fiscal pressure for even more fare increases.
DEVELOPING THE “COLLABORATIVE GENE”
A Fractious and Exclusionary Civic Culture
Greater Boston’s civic culture arguably poses the greatest challenge of all because it leaves the region ill equipped to handle all of the other challenges. According to most external observers, Greater Boston’s civic traditions and structures are badly out of sync with the times. In their 2004 report Boston Unbound, nationally recognized journalists Neal Peirce and Curtis Johnson suggest that Greater Boston lacks sufficient civic structures for cross-sectoral, inclusive deliberation and decision-making. While most competitor “citistates” have mechanisms in place to allow leaders to come to consensus and to execute quickly on shared strategies, the authors described Greater Boston as “lacking the collaborative gene.” They call for greater engagement in the life of the city and region by the heads of the area’s large and well-resourced institutions of higher education and medical care, as well as for more openness to new, more diverse voices, innovative thinking, and a regional approach to shared problems.
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