With the life sciences industry in the Boston metro area, it’s not about “if you build it, they’ll come” but “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 agent JLL.
According to the Massachusetts Board of Biotechnology (MassBio), the first six months of the year represent the fourth-largest venture capital investment of any year for a Massachusetts-based biopharmaceutical company. This region is already known for its space limitations when it comes to life science development, which is why you see so many office projects turned into laboratories.
There are good reasons to build more houses if you want this business to thrive and survive.
“Housing and infrastructure remain crucial to establishing the company. That’s really the deciding factor,” said Kendalle Burlin O’Connell, president and chief operating officer of MassBio. “To support the incredible growth we’re seeing and to continue making Massachusetts the best place in the world for life sciences, we need to make sure affordable housing is available.”
Many state-owned life sciences companies require Federal Drug Administration approval for various pharmaceutical developments. After the permits were issued, space and staffing requirements increased rapidly. Just look at Moderna, which is doubling its workforce and planning a similar expansion trajectory for its Massachusetts headquarters and manufacturing plant after developing its COVID-19 vaccine. In 2021, biopharmaceutical jobs in Massachusetts will increase by 13.2%.
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“Massachusetts has really been at the forefront of the development of this area and the investments that have been made over the years, and it’s been a truly collaborative effort,” said Catherine Rollins, director of the Boston Urban Land Institute/New England. “I wouldn’t want to see us lose ground in terms of market leadership because we don’t work together and don’t think about the big picture in terms of commercial and real estate competitiveness.”
The Commonwealth is home to many corporations that could become the next Modern. MassBio’s 2022 industry brief projects that, by the end of 2025, 26 million to 59 million square feet of laboratory and manufacturing space will be added to the state’s life sciences inventory. However, Catherine Carlock of The Globe reports that 80% of current lab projects in the region may be “limited” in the face of rising interest rates and a declining economy, but that “as demand increases , the developments of the laboratory will become an established life”. . the sciences “districts, or groups, could be consolidated, with Cambridge leading as usual”.
Despite the potential for cooler demand, the Boston Planning and Development Board approved three new life sciences developments this month: 125 Lincoln St., 310 Northern Ave. and 51 Melcher St.
Housing availability and affordability are critical to maintaining economic competitiveness, so this consolidation will pose significant challenges.
“There are a number of reasons the industry is regionalizing,” O’Connell says of the recent trend of life sciences companies expanding into areas like Worcester, the Merrimack Valley and the North Coast. “There may be more affordable housing available, and we can step into these other communities and take advantage of a new and diverse workforce. Unless we have a strong and diverse workforce to support this evolution, these companies won’t be there.
Concentration of life scientists will drive up housing costs, but industry is better equipped to support them than the general public: The median annual salary of nearly 107,000 life scientists in the state is $201,549, well above the income median household in the state of $84,385, according to census data.
According to MassBio, diversifying the workforce would theoretically ease pressure on housing costs in several cities and free up supplies for people who don’t earn much.
MassBio is not the only one who thinks so.
“It’s consistent with the hub-and-spoke models we’re looking at where the focus will be, whether it’s Kendall Square or the harbor or a suburban alternative like Quincy,” said John Boyd Jr., the company’s director of consulting The Boyd. Co. “New Hampshire is also getting a lot of attention from life science companies, especially after the new tax increase.”
Expansion north and west will not be enough. The Boston area may have long been a leader in the life sciences, but the crown may be found on a new head. JLL’s Top 10 ranking includes more affordable housing markets such as Philadelphia (#5); Raleigh-Durham, NC (No. 6); and Salt Lake City (#10).
“As these companies grow their workforce, the talent often comes in from outside the market, whether it’s overseas or elsewhere in the United States. The idea is like building more homes where people want to live.” said Mark Bruso , principal investigator of JLL. administrator. “Honestly, Boston doesn’t know it yet, and it’s not going to get better anytime soon.”
Nearly every conversation about the need for more housing in the greater Boston area is heating up again. Simply put, there weren’t enough homes being built and densification was the solution. A nonprofit Rise for Growth study released earlier this year ranked Massachusetts the 11th worst housing shortage in the nation, with 108,000 more homes needed each year to meet demand.