Developers, City Officials Say Partnerships Are More Crucial Now As New Policies Move Forward

As the mayor moves forward with proposals like rent control and increases in linkage fees that worry Boston developers, industry leaders say it is important to maintain positive relations with the public sector.

The real estate industry has become more aggressive in its pushback against Mayor Michelle Wu's agenda, including a six-figure lobbying campaign against her rent control proposal, but experts at Bisnow’s Boston Construction & Development event said there are things real estate should be doing to help the city deliver on their shared goals: housing affordability and sustainability. 

City officials at the event, held at the Westin Copley Place hotel, also stressed how important it is to have a strong line of communication with development groups when creating new policies surrounding commercial real estate projects.

“We want to understand what challenges you’re all facing and understand how can we streamline our program policies to set those expectations so that you can make those plans,” said Hannah Payne, the carbon neutrality director for the city of Boston.

Boston Planning & Development Agency Director James Arthur Jemison said that the Wu administration is looking to receive feedback from the real estate industry on the best ways to modify its policy proposals so projects can still move forward in the city. 

Just outside of Boston, Everett has seen its own development boom in recent years because of its proximity to the city and its large available sites.

“The creation of any type of policy is always going to be twofold,” said Matt Lattanzi, Everett's director of planning and development. “Ensuring that you're actually meeting the goals that we've set forth, that we want to achieve, but also working with the private developers and oftentimes the municipality.”

With the Encore Boston Harbor casino on the waterfront and new development coming into the city’s Commercial Triangle, Lattanzi said the creation of new policies can be difficult as the city looks to hear feedback from its residents and partner with private developers.

“Most of the time people think that the developer and city are at odds. That is far from the truth,” Lattanzi said.

Last month, the Greater Boston Real Estate Board began a $400K lobbying campaign against Wu's rent control policy, arguing that the policy will lead to more pain in the market. Last week, the city council voted in favor of the policy, which will now travel to Beacon Hill for review.

Sarah Lemke, senior vice president of New England Development, said that all of these added pressures from city policies are making it harder for developers to push forward with new projects.

"There are many things that are killing us right now," Lemke said. "You've got construction costs, high interest rates, including increases in linkage and inclusionary housing requirements, depending on whether you're doing commercial or residential, and then sustainability standards going up every day."

RISE Construction Management co-founder Jim Grossmann said that the industry may be focused on these major policy proposals, but that there are ways to work through the changes and still bring on new development.

“That's the reality as an industry, we have to focus on what's happening from a cost model perspective. Are the standard dynamics in the marketplace changing?” Grossmann said. “If we collectively focus on that, the policy will be achievable, much more so than it is today.”

Grossman also said the real estate industry should regularly talk to city officials and community members to reach agreement on how to move projects forward. 

"It's been really a boots-on-the-ground effort," Grossman said. "It's about getting out there early, making sure that you coordinate with local elected [officials] in the BPDA but getting out to the community groups because they're a strong voice and having a dialogue." 

Davis Cos. Senior Vice President of Construction Marco DiMuzio said building close relationships with the community can help ease the process of navigating city policies.  

"We are involved in a robust community engagement program, where we get out there. We have got the town hall meetings or meetings to inform the community of what we're going to do, and with proper planning and engagement in the community, we find that once we get through the permitting process or into the permitting process, it's a much smoother road," DiMuzio said. 

Payne, Boston's carbon neutrality director, said that when it comes to achieving sustainability goals, city leaders need to be more understanding of the challenges developers face when new policies add on to each other.

“We are also looking at how do we build on the different policy?” Payne said. “We’re trying to make sure that all those things are working together and not adding additional burdens but are supporting the bigger decarbonization goals.” 

Payne said that these public-private relationships are crucial in learning from different experiences to determine what types of policies are actually feasible for developers to plan toward now. She said not only is it important to provide residents with education on the city's sustainability effort but to help developers understand their role in achieving goals set through BERDO and other net-zero initiatives.

Some big developers have already made substantial moves to push the city forward with sustainability like MP Boston’s Winthrop Center, which is slated to be the world’s largest office building to achieve Passive House certifications, or WS Development’s commitment to renewable energy in its New England portfolio including three buildings in Boston’s Seaport area.

Many of these developers are facing intense pressures as more strict carbon emission caps are starting up in 2025 to meet Boston’s goals under BERDO 2.0.

Josh Billing, vice president of construction for HYM Investment Group, said that it is vital for city officials to be transparent and consistent about their goals so that these projects will be efficient.

“There’s always the bigger challenge for us in solving the economic equation for housing that works,” Billings said. “Having the best information that we can from the point of how the landscape is going to look like, from a regulatory perspective, from an economic perspective, that helps us ensure that we’re moving projects through the pipeline that remain viable and become real.”