Sustainability Codes Adding More Hurdles For Boston-Area Developers, But New Federal Funding Could Help

As construction projects face pressure from every direction, developers are trying to find new ways to move them forward, and some are looking to federal funding as a solution.

Projects have become harder to pencil due to high interest rates and construction costs, and several building experts speaking Wednesday at Bisnow's Boston Construction and Development event at the Seaport Hotel said a series of new city and state sustainability codes are keeping some developments at a standstill.

However, they said the Inflation Reduction Act of 2022, which aims to invest in domestic energy production and promote clean energy, could help to pull some of the pressure off of developers and help them meet the ambitious climate goals.

"This is a tomorrow problem that you have to think about today," said Steven Burke, senior director of sustainability at Suffolk Construction. "This interplay with the Inflation Reduction Act might actually make some of this a little bit less painful."In March 2023, the city of Boston 

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Multifamily Loan Losses Spike As Debt From 2021 Peak Comes Due

While much of the concern over commercial real estate distress has focused on the office market, a new report shows multifamily loans are the ones that saw the biggest spike in losses last year. 

The loss rate for apartment loans last year reached 16%, up from around 5% in the prior two years, according to MSCI’s U.S. Capital Trends report released Wednesday.The rate of losses is still less than half of what it was during 2009, when lenders were taking losses on 37% of apartment loans, but MSCI…

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Federal Reserve Still Sees 3 Rate Cuts In 2024 But Holds Rates Steady For Now

The Federal Open Market Committee on Wednesday didn't budge on interest rates, noting that it “does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent,” the central bank said in a statement.

Nine FOMC members said they believe three interest rate cuts this year are appropriate, in line with what the committee indicated in December. Five other members indicated that two cuts would be the correct course, according to materials released by the Federal Reserve Wednesday. 

Fed Chair Jerome Powell expanded on the likelihood of rate cuts with a chance of further hesitation during a press conference Wednesday. “We believe that our policy rate is likely at its peak for this tightening cycle and that if the economy evolves broadly as expected, it will likely be appropriate…

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