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Boston Globe
12-06-2025
- Business
- Boston Globe
Boston's office market goes from bad to worse. What's Wu's Plan B?
Boston Mayor Michelle Wu might do well to heed those words as the city faces a likely drop in commercial property tax revenue driven by the post-pandemic shift to hybrid work. Wu is skilled at projecting confidence about Boston's future. But is she also preparing for what experts increasingly see as a potentially painful cycle of falling office building values, shrinking property tax receipts, and mounting fiscal strain? Advertisement It's tough to tell. Last week, the Boston Policy Institute and the Center for State Policy Analysis at Tufts University Get Starting Point A guide through the most important stories of the morning, delivered Monday through Friday. Enter Email Sign Up Such a decline would leave a potential $1.7 billion hole in the city's budget, larger than the shortfall the two groups estimated in their When asked by reporters about the projections, Wu underscored the city's rock-solid bond rating, fledgling effort to convert office buildings into housing, and decisions by Lego and Eli Lilly to set up shop in Boston. 'We are going to continue to celebrate and highlight the progress that we have made, while continuing to double down on believing in Boston,' she said. Advertisement That's hoping for the best. But then she went on: 'Others can be part of a shadowy organization that is looking to tear down the city's progress.' That was a shot at BPI, a 501(c)(4) think tank that can engage in politics Its earlier report with Tufts' state policy center, which doesn't take political positions, was used by real estate and business groups to help kill Wu's bid to temporarily shift more of the tax burden onto commercial landlords. The diss might be good politics for the mayor, who faces a reelection challenge from Josh Kraft. But in disparaging BPI, she sidestepped what could be her biggest challenge in a second term: keeping residential taxes in check without the once-dependable growth in commercial real estate levies. Boston generates But, as the BPI report warned, 'In the current economic environment, Boston's unusual tax structure has ceased to be a source of resilience and has become a liability.' That's a harsh reality at a time when Against that backdrop, Wu's cheerleading can come across as tone deaf —or worse, denial. 'Although we're facing the same uncertainty that cities everywhere are dealing with right now, the reality is that Boston is in the best possible position to weather this moment,' Wu said last week after the City Council Advertisement Really? With everything the city is up against? To be fair, Wu said in April that the city needs to be ready 'for the worst in every case.' And her $4.8 billion budget included a below-average increase of 4 percent, a nod to the fact that the city couldn't continue the ramped up spending of previous years. 'The City is taking an all hands on deck approach to reinvigorating Downtown — both by promoting economic opportunity to attract more people at night and on the weekends and by adding housing to bring more people to the neighborhood during the day and after work hours,' a Wu spokesperson said in a statement. Wu is once again The change — which would limit any increase in tax bills for residential property owners at the expense of struggling commercial landlords — was rejected last year by the Senate. Its chances for passage this year are slim to none, which raises this question: What's Wu's Plan B? The mayor hasn't said. Hope for the best. It's not clear the city is prepared for the worst. Larry Edelman can be reached at
Yahoo
12-06-2025
- Business
- Yahoo
As Layoffs Mount, One Question Is Getting Louder: What Happens To Skyscraper Offices In Cities Like Boston When People Are Replaced By AI?
As artificial intelligence keeps reshaping the workforce, more people are starting to wonder what will happen to all the towering office buildings in downtown areas. With companies pushing for efficiency and reducing headcounts, large office spaces are already sitting half-empty. According to the latest Moody's Analytics report, the average vacancy rate for office property in the U.S. is 20.4%, which is the highest vacancy rate on record. Don't Miss: Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — 'Scrolling To UBI' — Deloitte's #1 fastest-growing software company allows users to earn money on their phones. A new report from the Boston Policy Institute estimates that the city of Boston could lose $1.7 billion in tax revenue over the next five years because of empty offices and falling property values. 'Things are not getting better,' Evan Horowitz, executive director of Tufts University's Center for State Policy Analysis, which co-published the report, told WBUR-FM recently. 'Offices remain empty. Their valuations continue to fall. We think they'll fall further than we thought.' The report projects a growing budget shortfall in Boston, from $135 million this year to more than $550 million by 2029. The assessed value for office buildings has already dropped 9% this fiscal year, a dip similar to what was seen during the 2008 financial crisis. Some buildings have reportedly sold at discounts as steep as 70%. According to the report, Boston is especially vulnerable because more than a third of its budget comes from commercial property taxes. By comparison, other U.S. cities rely on that type of revenue for just 11% of their budgets. To make matters worse, Massachusetts law limits Boston's ability to raise money through other taxes. Trending: Invest where it hurts — and help millions heal:. While policymakers debate revenue forecasts, many people online are raising a more basic question: 'What happens to skyscraper offices in the city center when people are replaced by AI?' This exact question was posed on a recent Reddit thread in r/Layoffs, and users floated a range of possibilities. Some were skeptical about AI entirely replacing workers, calling it more of a smokescreen. 'AI is just a buzzword. Most of these jobs are being replaced by Indian and Philippines workers who work entirely remotely,' one person wrote. Others focused on real estate: 'Convert them to luxury apartments.' Another user pushed back, noting how expensive that process can be: 'This is always way more expensive than people think because the offices were not set up with electrical/plumbing/heat that is suitable for apartments.' Some suggested turning empty towers into data centers, housing, or even hotels. 'Hotel Torre Catalunya used to be an office building and they transformed it into a hotel here in Barcelona,' one Redditor said. But others were more cynical, claiming cities would 'rather demolish these office towers than convert them to affordable housing.' One comment captured the growing sense of frustration: 'We are quickly moving into cyberpunk/corporate fiefdoms territory.'The larger concern is that cities like Boston built their budgets around the assumption that office life was permanent. Now, with hybrid work becoming the norm and companies leaning on automation, that model is looking shaky. 'We can't rely on big office towers that attract commuting workers,' Horowitz told WBUR. 'It doesn't mean the city can't be vibrant. The city has lots of other amenities that people enjoy. It just has to find a new way to secure its future strength.' For now, city leaders, business owners and regular workers are all stuck asking the same question: What do we do with all this space? Read Next: Here's what Americans think you need to be considered wealthy. Deloitte's fastest-growing software company partners with Amazon, Walmart & Target – Up Next: Transform your trading with Benzinga Edge's one-of-a-kind market trade ideas and tools. Click now to access unique insights that can set you ahead in today's competitive market. Get the latest stock analysis from Benzinga? APPLE (AAPL): Free Stock Analysis Report TESLA (TSLA): Free Stock Analysis Report This article As Layoffs Mount, One Question Is Getting Louder: What Happens To Skyscraper Offices In Cities Like Boston When People Are Replaced By AI? originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Sign in to access your portfolio
Politico
05-06-2025
- Business
- Politico
The future of Boston's budget
WARNING $IGNS — A report warning of post-pandemic financial turmoil ahead for Boston stoked a tense debate last year about the city's fiscal future. An updated analysis says things are only looking worse. The report released this morning by the Boston Policy Institute and Tufts University's Center for State Policy Analysis predicts that office values in Boston could drop 35 per cent to 40 percent below FY24 levels. That's even worse than the 20-to-30-percent drop the same team predicted in last year's report. What does that mean for Boston's bottom line? Revenues could come in $1.4 billion to $2.1 billion lower than previously projected over the next five years. 'The question for the city is how they want to address it,' Evan Horowitz, executive director at the Center for State Policy Analysis, told Playbook. 'Do they want to let tax rates rise for homeowners to make up for the shortfall? Or do they want to change their revenue expectations?' Last year's report caused a stir among city officials and budget-watchers. Boston Mayor Michelle Wu panned the finding that the city could face a billion-dollar 'shortfall' as 'false information.' That's because the city can't face a budget shortfall, per se — it's required to have a balanced budget. But because the city's budget is built mainly on property taxes, falling commercial property values leave Boston's budget writers with two options: Slow spending to make up for the decline, or raise taxes to meet spending needs. That meant Boston homeowners saw a more than 10 percent bump in their tax bills in FY25. 'The way that our tax laws are structured … what happens when one sector might have their valuations fall is that it simply shifts onto another sector. There is no choice,' Wu said at the time. Wu tried to push a measure on Beacon Hill that would've allowed the city to shift more of the tax burden onto commercial owners, but couldn't get approval from the state Senate. Lawmakers on Beacon Hill have yet to weigh in on a similar bill the mayor filed this year. The report comes after a couple high-profile high rises have sold for less t han they were bought for years ago. Boston budget officials have pointed to the city's AAA bond ratings from both Moody's Ratings and S&P Global Ratings as a sign of the city's fiscal health. 'What the bond rating agencies are saying is Boston is in a very healthy position to tackle this problem,' Horowitz said. GOOD THURSDAY MORNING, MASSACHUSETTS. Worth noting: The think tank behind the new study has a history with Wu that dates back beyond its founding in late 2023, CommonWealth Beacon reported last year. BPI, a 501(c)(4), also doesn't make their donors public. TODAY — Gov. Maura Healey participates in a fireside chat on child care at the at the ALX Business Summit at 1:45 p.m. in Brighton. Lt. Gov. Kim Driscoll is honored at the MassDems Roosevelt Awards Dinner at 6 p.m. in Boston. Boston Mayor Michelle Wu holds a campaign press conference at 9:30 a.m. and hosts a coffee hour at 10 a.m. in Roslindale. Have a tip, story, suggestion, birthday, anniversary, new job, or any other nugget for the Playbook? Drop me a line: kgarrity@ DATELINE BEACON HILL — Massachusetts House votes to overhaul Cannabis Control Commission by Katie Lannan, GBH News: 'State representatives outlined their vision of a more efficient and accountable Cannabis Control Commission as they passed a bill Wednesday that would overhaul the embattled agency and make other changes to the way marijuana is regulated in Massachusetts. The bill won unanimous support in the House, though advocates for equity in the marijuana industry cautioned some provisions could threaten the survival of small, local businesses.' — Healey administration calls proposed food stamp changes 'reckless and dangerous' by Martha Bebinger, WBUR: 'Massachusetts would have to find between $185 million and $704 million dollars a year to maintain food stamps for 1.1 million residents if the U.S. Senate approves cuts proposed in a House bill. The legislation would shift costs for anti-poverty aid like the Supplemental Nutrition Assistance Program (SNAP) to states to help offset increased federal tax cuts. This includes aid for people well above the poverty line.' — Maura Healey delivers millions to boost downtown Boston housing revival by Lance Reynolds, Boston Herald. — Don't call it the 'millionaires' tax: Inflation is raising the bar on who pays Massachusetts' high-earner levy by Matt Stout, The Boston Globe. FROM THE HUB NEW YORK STATE OF MIND — Boston Mayor Michelle Wu got a shoutout from two New York City mayoral candidates during their Wednesday night debate. The two mayoral hopefuls — progressive state Rep. Zohran Mamdani and City Comptroller Brad Lander — said they believe Wu is the most effective member of the Democratic Party. — Boston City Council passes Michelle Wu's $4.8 billion budget, with $9M in amendments by Gayla Cawley, Boston Herald: 'In a marked change in tone from the infighting that occurred last year, the Boston City Council unanimously approved the mayor's proposed $4.8 billion city budget for fiscal year 2026 with $9 million worth of Council amendments. Council Vice President Brian Worrell, who shepherded the Council's budget process as chair of the Ways and Means Committee, spoke to the importance of putting together a budget that reflects the needs of residents, amid the federal government's threats to cut funding for Boston and other sanctuary cities.' — Dutch quantum computing startup establishes base in Downtown Boston by Jon Chesto, The Boston Globe: 'Dutch computing startup Qblox has picked a Financial District office tower as its launchpad into North America. The privately held company, which makes and sells hardware and software to quantum computing developers, hosted a grand-opening ceremony on Wednesday at its 99 High St. office, dubbed its North American headquarters.' — Massachusetts U.S. Attorney Leah Foley slams Boston Mayor Wu for 'false narrative' of ICE by Lance Reynolds, Boston Herald. FROM HARVARD YARD — Trump halts entry of foreign students seeking to attend Harvard by Gregory Svirnovskiy, POLITICO: 'President Donald Trump has issued an order barring foreign students from entering the U.S. to study at Harvard University in an escalation of his fight with America's oldest university. The president said in a statement announcing the order Wednesday that he has also empowered Secretary of State Marco Rubio to begin revoking visas of foreign students at the Ivy League school.' MIGRANTS IN MASSACHUSETTS — Family of detained Milford teen pleads for his release by Sarah Betancourt, GBH News: 'Marcelo Gomes Da Silva's bedroom has a bunk bed, pale gray walls and a drum set. It was from here that his parents and younger siblings begged the federal government to release the 18-year-old Milford student in a video.' RELATED — Milford student arrested by ICE has fever, sleeping on floor, attorney says by Adam Bass, MassLive. THE RACE FOR CITY HALL — As activists accuse Kraft campaign of breaking election law, Kraft campaign alleges violations by Emma Platoff, The Boston Globe: 'More than a dozen Boston Democratic activists on Tuesday asked the Massachusetts Office of Campaign and Political Finance (OCPF), the state agency that polices campaign finance, to investigate what they described as 'troubling evidence of illegal campaign spending and coordination' between Josh Kraft's campaign for mayor and an outside super PAC, 'Your City, Your Future,' that has supported his campaign. Less than 24 hours later, the Kraft campaign fired off its own letter to OCPF regulators, alleging campaign finance law violations by Mayor Michelle Wu, including claims that public employees are improperly working for the mayor's political campaign by using public resources during office hours. CHARLIE ON THE NCAA NOT ENTERING THE TRANSFER PORTAL — Former governor and current NCAA President Charlie Baker is not eyeing a return to public office … in the near future at least, he told the Boston Globe. Baker is 'not going to be a candidate for anything in 2026,' he told the Globe's Michael Silverman in a wide-ranging interview. FROM THE DELEGATION — Rep. Clark pushes congressional colleagues across the aisle to defeat budget bill by Tiziana Dearing and Rob Lane, WBUR: 'U.S. Rep. Katherine Clark, the House Democratic whip, says even though President Trump's massive budget bill has moved into the Senate chamber, her Democratic colleagues are going to keep criticizing the legislation. Echoing recent words from Elon Musk, who had led the president's cost-cutting unit, Clark called the legislation a 'disgusting abomination.'' — Some federal workers lost health coverage they had paid for. Stephen Lynch wants answers by Andrea Hsu, WBUR. DATELINE D.C. — Trump issues new multi-country travel ban by Myah Ward, POLITICO: 'President Donald Trump on Wednesday issued a sweeping new travel ban for people from 19 countries, citing national security risks. The ban fully restricts people from Afghanistan, Burma, Chad, Republic of the Congo, Equatorial Guinea, Eritrea, Haiti, Iran, Libya, Somalia, Sudan and Yemen from entering the United States. The president is also partially restricting and limiting U.S. entry for nationals of Burundi, Cuba, Laos, Sierra Leone, Togo, Turkmenistan and Venezuela.' THE LOCAL ANGLE — Worcester city councilor charged with assaulting police after ICE arrest by Brad Petrishen, Telegram & Gazette: 'Police have charged District 5 City Councilor Etel Haxhiaj with assault and battery on a police officer and interfering with police following a May 8 U.S. Immigration and Customs Enforcement operation on Eureka Street. The Police Department sought three charges against Haxhiaj on May 12, court records made public June 4 show. An assistant clerk-magistrate, at a closed-door hearing June 4, found there was probable cause to issue two of them.' MORE — Worcester police chief stands behind decision to charge city councilor by Brad Petrishen, Telegram & Gazette: 'The charges his department filed against District 5 City Councilor Etel Haxhiaj related to the May 8 U.S. Immigration and Customs Enforcement operation on Eureka Street were necessary to prevent people from interfering with police, Police Chief Paul Saucier said.' AND — 'I did the humane thing': Worcester city councilor stands by actions at ICE arrest by Adam Bass, MassLive. — Homelessness at all-time high in Worcester County by Lynn Jolicoeur, WBUR: 'Homelessness is at an all-time high in Worcester County, according to data from this year's annual homeless census. The Central Massachusetts Housing Alliance released data from the census Wednesday. It found 3,110 people were homeless the night the count was conducted in January. That represents a 20% increase over last year. More than one-third of those experiencing homelessness were children.' — Security guards start duty monitoring City Hall as part of new safety measures by Toni Caushi, Telegram & Gazette: 'Visitors walking into City Hall June 3 may have noticed a new presence roaming about the hallways. As part of the city's plan to heighten security at City Hall, two security guards per shift have started to monitor the four floors which by the end of the month will include the introduction of a walk-through scanner. The city has said that visitors will also be required to sign in upon entry.' — Massachusetts orders Taunton to release some footage from mayor's 2024 arrest, by Sarah Bawden, WPRI: 'The Commonwealth of Massachusetts and the city of Taunton are at odds over whether footage of Mayor Shaunna O'Connell's arrest last summer should be made public. ... Galvin's office ruled back in April that, while body-worn camera footage from O'Connell's arrest was exempt from disclosure, footage from the booking room could be released in a redacted form. In a follow-up decision on May 14, the state gave the city 10 days to release portions of the booking room footage. But that hasn't happened.' HEARD 'ROUND THE BUBBLAH HAPPY BIRTHDAY — to Auditor Diana DiZoglio, state Rep. Kevin Honan, Teddy Warner, state Sen. Adam Gomez and Aaron Moser.
Bloomberg
05-06-2025
- Business
- Bloomberg
Boston Tax Hit From Office Market Slump Swells to $1.7 Billion
Boston's office buildings stand to lose nearly half their value over five years, costing the city as much as $1.7 billion in cumulative tax revenue. Office buildings have been selling at steep discounts recently, signaling a deeper-than-expected spiral in an market that's struggled with the persistence of hybrid work and higher interest rates, according to a report on Thursday from Tufts University's Center for State Policy Analysis and the nonprofit Boston Policy Institute.
CBS News
16-02-2025
- Business
- CBS News
Boston falling behind rest of state when it comes to housing, Boston Policy Institute says
Once again, Boston Mayor Michelle Wu has filed a bill asking the state legislature for permission to temporarily raise the commercial property tax rate beyond legal limits in order to deal with projected revenue losses tied to the sharp decline of commercial real estate values. Wu's tax bill based on Menino bill We're now entering year two of debate over this problem, which was initially made widely public by a report commissioned by the Boston Policy Institute, a new non-profit dedicated to analysis of city issues. Institute Director Greg Maynard tells WBZ-TV that "The bill that Mayor Wu is supporting in the state Senate is actually based on something that was passed 20 years ago under Mayor Menino, and that was enabling legislation that let cities and towns all across Massachusetts choose to do the same thing that Boston is trying to do now. Mayor Menino got support from a whole bunch of mayors all over the state, as well as from Governor Romney, and so he was able to put together a coalition and really, really get that done, make the case that it was important. Mayor Wu, although she's using the same legislation that Mayor Menino did 20 years ago, didn't put anything close to that coalition together, and she didn't get anything close to the coalition in terms of business leaders." The Mayor's previous effort stalled in the Senate and a compromise with business leaders fell apart when it turned out potential tax hikes on residential property owners weren't as severe as the city had forecast. But the relationship between the mayor and many elements of the business community has been rocky for some time, and we asked Maynard why. "I think an important part of it is, you can see the reaction from the Wu administration to BPI's report last year. Our report came out, the mayor and members of her administration called it misinformation and said that it wasn't true. And then shortly after that, offered this piece of legislation we're talking about now, which is designed to solve the problem that BPI's report identified." But Maynard notes: "I think that Mayor Wu's tax bill actually brings up some really important questions about how Prop. 2 ½ [the state law limiting local property tax growth and establishing the two-tiered tax system for commercial and residential property] actually operates, and whether a split tax rate…[is] actually legal or constitutional." Housing enters mayoral race Meanwhile, the 2025 Boston mayoral race is underway, with challenger Josh Kraft and Wu already engaging on issues like housing development. On housing, Maynard says "the debate we've seen over the last two weeks in Boston shows how far the housing debate in the city has come. It's really focused on supply, and so Boston is finally starting to move into a debate around how to build more housing, which is something the rest of the state has been engaged in for a long time. But Boston's politics, for whatever reason, has been really resistant to talking about the core of the issue…the MBTA Communities Act [requiring communities served by the T to reform their zoning to allow for more multi-family housing] brings up a really important issue that I think is going to be addressed in this mayor's race, which is that because of the MBTA Communities Act, there are communities around Boston that now have denser by-right development just on the other side of the line from Boston. So it's tougher to build in Boston now than it is in the communities that surround it and some of the suburban communities…so towns like Everett and Revere have built way more housing as a percentage of their total stock than Boston…the state has legalized ADUs [accessory dwelling units], the city has not done that. They haven't followed Cambridge's lead, either with the parking minimum abolition or with this massive upzoning. And so Boston is really falling behind the rest of the state in terms of making it easier to build. The city's made it more expensive to build with stuff like increasing inclusionary zoning and increasing environmental requirements, but they haven't done anything to loosen restrictions like we're seeing in communities here in Massachusetts and all across the country." Maynard also discussed recent developments in the city's push to install bike lanes. You can watch the entire conversation here, and please join us every Sunday morning at 8:30 for extensive discussion of the key issues in the mayoral race and elsewhere across the region on the weekend edition of "Keller At Large."
