Property

Why a biopharmacist concentration in Cambridge and Boston would raise costs, exacerbate the housing crisis and knock the region off its throne.

The region is already notoriously space-constrained when it comes to life science development, which is why so many office projects are being converted into laboratories.

For the life sciences industry in Greater Boston, it’s not so much an “If you build it, they’ll come” case. But rather a case of “If you build it, where will they live?”

The region is home to the world’s largest cluster of these companies in the world – and has been for several years, according to an annual analysis by JLL real estate brokerage.

It brought the first six months of this year the fourth highest tier of venture capital investments at biopharmaceutical companies headquartered in Massachusetts in any full year, according to Massachusetts Council of Biotechnologyor MassBio. The region is already notoriously space-constrained when it comes to life science development, which is why so many office projects are being converted into laboratories.

There is a strong case for building more housing if you want these businesses to grow and stay put.

“Housing and infrastructure remain key to locating businesses. This is absolutely the deciding factor,” he said Kendalle Burlin O’Connell, president and chief operating officer of MassBio. “To sustain the amazing growth we’re seeing and continue to maintain Massachusetts as the best place in the world for life sciences, we need to provide affordable and affordable housing.”

Many life science companies based in the state are working to get any number of pharmaceutical projects approved by the Federal Drug Administration. Once approved, the need for space and manpower increases rapidly. Just look Moderna, which doubled its workforce and planned a similar expansion trajectory for its Massachusetts headquarters and manufacturing facilities following the development of a COVID-19 vaccine. In 2021, employment in the biopharmaceutical industry in Massachusetts increased by 13.2 percent.

“Massachusetts has been a true leader in cultivating this industry and making investments for years, and this has truly been a collaborative effort,” said Catherine Rollins, director of communications for Massachusetts. Urban Land Institute Boston/New England. “I would hate to see us lose market leadership because we’re not collaborating and thinking about the really big picture around economic competitiveness and housing.”

The Commonwealth is home to many companies that could be the next Moderna. The MassBio 2022 Industry Snapshot report estimated that by the end of 2025, the state’s life science inventory will add 26 to 59 million square feet of laboratory and manufacturing space. Catherine Carlock of The Globe, however, reports that 80 percent of lab projects in the region could be ‘cut back’ amid rising interest rates and a shaky economy, but “as demand declines, lab development may consolidate into established life science districts – or clusters – with Cambridge as usual leading the way.”

Despite potentially lower demand, the Boston Planning & Development Agency approved three new life science developments this month — 125 Lincoln St., 310 Northern Ave. and 51 Melcher St.

“Housing and infrastructure remain critical to locating businesses.”

Kendalle Burlin O’Connell, MassBio

Affordability and accessibility of housing are key to staying economically competitive, so this consolidation would be a big problem.

“The beauty of regionalizing the industry is for several reasons,” O’Connell said of the recent trend of life science companies expanding into areas such as Worcester, the Merrimack Valley and the North Shore. “There may be more affordable and affordable housing, and we can go into these other communities and tap into a new and diverse workforce. Unless we have a solid and diverse workforce to sustain this growth, these companies will not stay here.”

The concentration of life science workers would result in exorbitant housing costs, but the industry is better equipped to bear it than the general public: the average annual salary of the state’s nearly 107,000 life science workers is $201,549, much more the median household income in the state was $84,385according to census data.

According to MassBio, dispersing workers would theoretically put less pressure on housing costs across municipalities and free up supply for people who don’t earn as much.

MassBio isn’t the only one who thinks this way.

“This is consistent with the hub and spoke model that we see where the center of gravity will be, whether it’s in Kendall Square, whether it’s a seaport or a suburb like Quincy,” said John Boyd Jr. location selection Boyd Co. “Even New Hampshire is getting a lot of interest from life science companies right now, especially with the new tax increases.”

North and west expansion is not enough. Greater Boston may be a longtime leader in the life sciences, but that crown may be on a new head. The top 10 in the JLL ranking includes more affordable housing markets such as Philadelphia (No. 5); Raleigh-Durham, North Carolina (#6); and Salt Lake City (No. 10).

“As these companies increase the number of employees, talent often comes from outside the market, whether they come from within the country or elsewhere in the US. The idea is how to build more housing where people want to live,” he said Brand Bruso, senior research manager at JLL. “Honestly, Boston hasn’t figured it out yet, and it’s not going to get any better any time soon.”

Almost all talk about the need for more housing in Greater Boston goes back to densification. Simply put, not enough houses are being built and the solution is higher density. AND study non-profit Increase published earlier this year ranked Massachusetts the 11th worst housing deficit in the nation, with 108,000 more units needed each year to meet demand.

“I think these communities, if they really want to take the opportunity to build these really vibrant, diverse, mixed-use places, they should start with zoning, even if it’s not the s*xiest place to start,” he said. Kristen O’Gormandeputy director for SCB architectural firm.

Greater Boston needs more housing to retain its natural science crown, but it still has an asset: talent from top universities like Harvard and MIT.

“Housing is something that companies are definitely considering,” he said Jeffrey Myersdirector of research at real estate brokerage Colliers, “but that goes in the bin with a lot of other things where I think Boston has a really strong edge.”

A strong concentration of colleges and universities, as well as access to funding, clinical research labs and manufacturing space, are factors that could offset the higher cost of living and doing business in Massachusetts, said those interviewed for the story.

“There’s a lot of stickiness in Boston that’s not really related to the cost of housing,” Bruso said.

Send comments to [email protected].

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