Photo: Secretary of Housing and Economic Development Mike Kennealy by Leise Jones Photography

Story: Gail Spector

Massachusetts is a global leader in life sciences and technology. It’s home to many of the world’s best colleges and universities and one of the nation’s best K-12 education system. Businesses large and small are adding employment and innovating every day.

But everywhere Gov. Baker’s economic development head goes, people want to talk about housing.

“We are a high-growth, high-wage innovation driven economy. In some respects, it’s all at risk unless we can close our housing production gap,” Secretary of Housing and Economic Development Mike Kennealy told the crowd gathered for the Newton-Needham Regional Chamber’s annual Spring Business Breakfast.

Housing production in Massachusetts dropped by 50 percent in the last 30 years compared to 1960-1990, he said, even though the economy has surged.

Massachusetts mayors and business leaders understand that “we have a housing production system that has not kept pace with the vitality of our economy, the visions of our communities or the needs of our citizens,” Kennealy said.

Vacancy rates for rental properties hover at three percent when they should be a healthy 6 percent and vacancies for home ownership is a fraction of one percent, while a stable rate would be around two percent, Kennealy said.

Home values and rents have increased by 75 percent in the last 15-20 years, making Massachusetts the third most expensive state for home ownership and the most expensive for rent for a two-bedroom apartment.

Kennealy’s keynote address was part of a campaign across the state to promote Baker’s proposed “housing choice” bill that would make the permitting and approval process less onerous for cities and towns to build residential housing.

By lowering the vote threshold for elected bodies from a super majority (two-thirds of votes) to a simple majority, municipalities could more easily approve zoning changes and special permits for certain projects, which in turn would generate more residential construction, particularly in areas with high-density potential.

“We’re not telling municipalities what to do. We’re making it easier for them to do what they want to do,” Kennealy said, adding that municipal leaders want to create the kinds of housing they need for their communities.

“We want [Massachusetts] to be a place where young people can find housing that works for them. We want this to be a place where seniors can stay in their communities. We want this to be a place where businesses can attract more talent. We want this to be a place where the burden on families is lessened.”

“At the end of the day, as with anything about public policy, this is about who we are, what we want, what we believe, and what are our goals.”

Kennealy’s words at the May 3 event followed a new video debuted by the Newton-Needham Regional Chamber about how the housing shortage harms local businesses’ ability to attract and retain workers.

The video featured interviews with local business owners who highlighted the challenges in finding employees who can’t afford to live where they work.

Christopher Allen, director of the Boston Marriott Newton, listed hiring and retaining employees as one of the hotel’s biggest concerns. “I can comfortably say that our hiring situation is critical right now,” he said.

Seana Gaherin, owner of Dunn-Gaherins Food and Spirits, expressed the same concerns.

“This is the worst it’s ever been for Dunn-Gaherins,” said Gaherin, who has owned the pub for 28 years. “Basically we’re trying so hard to figure out every day, how do we find people to come to work in our operations. Work is easy. It’s just finding a place to live that’s key.”

According to an economic development report commissioned by the city, 89 percent of Newton workers commute into the city daily while 85 percent of residents commute out.

“If we were to add housing stock to this region, both workforce housing and affordable housing, the commuting opportunities become great, whether that’s pedestrian, public transportation, scooters or bicycles. Development needs to be broad enough and diverse enough so that it’s inclusive and not directed at one particular income level,” said Allen from the Marriott.

The chamber’s housing video was made by Another Age Productions and can be viewed by clicking here.