Lack of housing could strangle our life sciences industry

With Greater Boston’s life sciences industry, it’s not so much about saying “If you build it, they will come.” But more of a case of “If you build it, where will they live?”

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

According to the Massachusetts Biotechnology Council, or MassBio, the first six months of this year saw the fourth highest level of venture capital investment in Massachusetts-headquartered biopharmaceutical companies. The area is already notoriously limited when it comes to space when it comes to life science development, which is why you see so many proposals for offices converted into labs.

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

“Housing and infrastructure remain essential for the establishment of businesses. It’s absolutely a driving factor,” said Kendalle Burlin O’Connell, president and chief operating officer of MassBio. “To sustain this incredible growth we are seeing and continue to make Massachusetts the best place in the world for life sciences, we need to make sure there is available and affordable housing.”

Many state-based life science companies are working toward Federal Drug Administration approval for a number of pharmaceutical developments. When approval is granted, the need for space and manpower increases rapidly. Just look at Moderna, which doubled its workforce and planned a similar expansion trajectory for its Massachusetts headquarters and manufacturing facilities following the development of its COVID-19 vaccine. In 2021, biopharmaceutical employment in Massachusetts increased by 13.2%.

“Massachusetts has really been a leader in growing this industry and investing for years, and it’s really been a collaborative effort,” said Catherine Rollins, director of the Urban Land Institute Boston/New England. . “I would hate to see us lose ground as a market leader because we don’t collaborate and really think about the big picture of economic competitiveness and housing.”

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

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

Housing affordability and availability are key to staying economically competitive, so this consolidation would be a big problem.

“The beauty of industry regionalization is for a number of reasons,” O’Connell said of more recent trends in life sciences companies expanding into areas like Worcester, the Merrimack Valley and the North Coast. “There may be more housing available and affordable, and we’re able to go to these other communities and tap into a new and diverse workforce. If we don’t have a strong and diverse workforce to support this development, these companies won’t stay here.

Concentrations of life science workers would skyrocket the cost of housing, but industry is better equipped to handle it than the general public: the average annual salary of nearly 107,000 life science workers in the state stands at $201,549, well above the state’s median household income of $84,385, according to census data.

Spreading out workers would theoretically put less pressure on housing costs in various municipalities and free up supply for people who earn less, according to MassBio.

MassBio is not the only one to think so.

“That’s consistent with the star pattern that we’re seeing where there will be a center of gravity, whether it’s Kendall Square or whether it’s the seaport or whether it’s a suburban alternative, like a Quincy,” said John Boyd Jr., director of site selection consulting firm The Boyd Co. taxes.

Expanding north and west will not suffice. Greater Boston may be the longtime leader in life sciences, but that crown could end up on a new head. JLL’s top 10 ranking includes more affordable housing markets like Philadelphia (#5); Raleigh-Durham, North Carolina (No. 6); and Salt Lake City (No. 10).

“As these companies grow their workforces, talent often comes from outside the market, whether out of the country or elsewhere in the United States. The idea is that how do we build more housing where people want to live” , said Mark Bruso. , Senior Director of Research at JLL. “Boston, frankly, hasn’t figured that out, and it’s not getting better anytime soon.”

Almost every conversation about the need for more housing in Greater Boston comes back to density. In other words, there are not enough houses being built and higher density is a solution. A nonprofit Up for Growth study released earlier this year ranked Massachusetts 11th for the nation’s worst housing deficit, with 108,000 more homes needed each year to meet demand.

“I think these communities, if they really want to jump at this opportunity to build these really vibrant and diverse mixed-use places, a place to start is zoning, although that’s not the sexiest place to start. “said Kristen O’Gorman. , associate director of the architecture firm SCB.

Greater Boston needs more housing to retain its life sciences crown, but it still has a trump card: talent from top universities like Harvard and MIT.

“Housing is something that companies are definitely looking at,” said Jeffrey Myers, director of research at real estate brokerage Colliers, “but it comes in the bucket with a lot of other things that I think Boston has a really strong advantage.”

The high 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 this story.

“There’s a lot of rigidity in Boston that’s not really associated with the cost of housing,” Bruso said.

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