How Boston’s leaders are navigating the complexities of urban development
November 2024 — Boston’s development leaders are navigating the delicate balance between modernization and preserving the city’s historic character, as rising costs, housing shortages, and sustainability demands reshape urban planning.
During the second panel of the Invest: Boston 2024 Launch Event, key figures involved in urban development discussed how Boston’s real estate landscape is changing today. Titled “Development Reimagined: The Evolution of Space in a Changing City, and What Boston’s Forward-Thinking Leaders Are Creating in the Process,” the panel was moderated by Will Andronico, managing principal of Baker Tilly and panelists included Chanda Smart, CEO of OnyxGroup, Reetika Vijay, managing principal at IA Interior Architects, and Mark Alaimo, managing shareholder at LCW CPAs. The panel explored sustainability mandates, adaptive reuse strategies, and the critical need for inclusivity in urban development.
Boston’s unique blend of historical architecture and high-density urban living poses significant challenges for developers seeking to modernize while maintaining the city’s character. Vijay noted, “Boston is a city of neighborhoods, each with its own strong live-work-play component. Developers are increasingly looking to underutilized spaces, like fringe neighborhoods and transit sites, to create vibrant mixed-use communities.” She highlighted projects such as Winthrop Center and One Congress Street as examples of adaptive reuse and infill development revitalizing previously overlooked areas. However, she pointed out a pressing issue: “Public transportation is not reliable, and our young professionals — the lifeblood of the city — are unable to live here.”
This challenge is exacerbated by the high cost of living. Recent data shows that renting in Boston now requires an annual income of at least $144,000 to afford the median monthly rent of $3,600. Additionally, the median sale price of a single-family home in Greater Boston has reached $950,000 and is expected to surpass $1 million this year.
Smart, drawing from her experience with OnyxGroup’s senior housing and affordable projects, emphasized the complexity of retrofitting Boston’s historic structures. “Preserving 17th- and 18th-century buildings while meeting modern green standards is both costly and time-consuming,” she said, adding that public-private partnerships are essential to filling the financial gaps in these projects. Smart also underlined the importance of community engagement: “We ensure that projects are designed with input from residents, particularly those from historically marginalized communities. It’s about creating spaces that serve everyone, not just a privileged few.”
Adaptive reuse emerged as a focal point of the conversation. Andronico introduced the concept, explaining that it involves repurposing buildings for new uses, such as converting offices into residential spaces. While this trend addresses both housing shortages and high office vacancy rates, Alaimo noted the financial challenges: “Retrofitting is often more expensive than ground-up construction due to demolition, green mandates, and structural limitations. It’s not a simple fix.”
Vijay agreed but stressed the importance of creating affordable housing: “Right now, most of the units being developed are luxury apartments. Our young professionals and average families — the backbone of our economy — cannot afford to live here. If we want to compete as a global city, we need to address this imbalance.” She suggested extending transit options to more fringe neighborhoods as a way to alleviate housing pressures while maintaining economic vibrancy.
Smart echoed the sentiment, emphasizing the need for workforce housing. “The people who serve our communities — EMTs, teachers, and assistants — are being priced out. We need to focus on creating mixed-income developments that include workforce housing alongside affordable and market-rate units,” she said.
Boston’s efforts to address these challenges include initiatives like Mayor Michelle Wu’s $67 million affordable housing plan, which aims to create and preserve over 800 income-restricted units across the city. However, as Alaimo pointed out, workforce housing — targeted at middle-income earners — is often overlooked. “If we don’t solve this, it will drive employers and workers out of the state. That’s our biggest existential threat,” he said.
Boston’s push toward sustainability is reshaping urban development, but it comes with significant financial hurdles. Vijay highlighted how sustainability has become a core priority for tenants and developers alike: “Sophisticated tenants are demanding buildings that are LEED-certified and meet other stringent green standards. However, achieving these certifications can add hundreds of thousands of dollars to a project’s budget.” While some Class A buildings have embraced sustainability, older structures struggle to compete, further widening the gap between new and existing properties.
Alaimo noted that tax incentives can play a vital role in offsetting these costs. “Massachusetts has introduced various incentives through the Affordable Homes Act and federal programs like the Inflation Reduction Act, which provide substantial credits for energy-efficient and affordable housing projects,” he said. However, he acknowledged that navigating these incentives is challenging, particularly for smaller developers. “We need a better system to connect developers with available credits and financing options to make these projects feasible,” he said.
When asked how large-scale projects can balance profitability with serving underrepresented communities, Smart reiterated the importance of partnerships. “Public-private collaboration is the key. We need mixed-income developments that balance affordable, workforce, and market-rate housing,” she said. Vijay added that inclusive design extends beyond housing to public spaces and transit access. “Communities want walkable, equitable spaces that reflect their needs,” she said, urging developers to engage with local residents early in the planning process. Recent proposals, such as the plan to convert Everett’s Mystic Generating Station site into a stadium for the New England Revolution, highlight how urban redevelopment can incorporate broader community needs while tackling outdated infrastructure.
As the panel concluded, the speakers agreed that while Boston faces significant challenges in urban development, the city’s vibrant neighborhoods, rich history, and innovative spirit provide a strong foundation for future growth. Alaimo emphasized the urgency of addressing workforce housing: “If we don’t solve this, it will drive employers and workers out of the state. That’s our biggest existential threat.” Vijay pointed to Boston’s ability to compete globally, saying, “If we can tackle transit, housing affordability, and sustainability, we’ll not just survive but thrive as a global city.” Smart closed with a call to action: “Development must be inclusive, sustainable, and forward-thinking. Together, we can ensure Boston remains a city for everyone.”
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