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Published in The Boston Globe on 1/31/05

Housing, immigration called keys to the future
Greater Boston urged to rethink its policies

By Diane E. Lewis, Globe Staff  |  January 31, 2005

Greater Boston is a magnet for the creative class, but it won't become world-class without more affordable housing -- or immigrants.

Two different experts; two different theories about how urban areas must grow if they wish to compete in a global economy.

Take Richard Florida. The urban theorist ranked Boston number three in the country after measuring its ability to attract the hip, educated people who comprise the creative class.

In his book ''The Rise of the Creative Class," Florida compared more than 300 urban regions. He gives Greater Boston -- and Massachusetts -- thumbs up because they rank high in the three T's: talent, technology, and tolerance.

''Massachusetts does well by virtue of its urbanized population, phenomenal educational resources, and global connectivity," Florida said.

Now, in a book due out this year titled ''Flight of the Creative Class, Florida posits a new theory: If the United States, including regions like Greater Boston, expects to compete against emerging and established foreign communities for talent, they must embrace the immigrant population.

''As far as the immigration question is concerned," said Florida, ''it will be one of the most important creative-economy issues in coming years.

''Put simply: Places that find ways not just to tolerate immigrant populations but to fully embrace and harness their positive entrepreneurial, cultural, and social inputs are the ones that will flourish in the global economy."

Harvard University economist Edward Glaeser argues that housing -- not immigration -- will determine whether urban areas like Greater Boston become world-class, or just ''boutique" enclaves for the wealthy elite.

Glaeser said that Boston's ability to grow is being hampered by an overheated housing market.

He also said places with lots of affordable housing tend to attract more workers. But in Greater Boston, where many condominiums sell for more than $300,000, a study by the Greater Boston Chamber of Commerce revealed that younger workers were leaving, in part, because of the high cost of housing.

''This is less of a world city or region than it should be or could be if it had a different set of policies surrounding new construction," said Glaeser. ''And it will not reach its full potential over the next 20 to 30 years if it continues with these policies. So, if Boston's economy is to grow, then we'll have to build more housing."

Glaeser, director of the Rappaport Institute for the Greater Boston Area, said more than 30,000 building permits were issued for residential construction in Boston proper in the 1960s. By the 1990s, the number had dropped to 3,600.

In 2003, a total of 2,800 permits were issued, according to the city's Department of Neighborhood Development. Last year, there were 3,800 permits.

All told, more than 13,000 units have been built since 2000.

Glaeser credits Boston Mayor Thomas M. Menino with increasing the city's housing stock, but said the city must maintain its current rate of production.

To make a significant impact, however, residential building also must go up in the suburbs, he said.

The economist recommends relaxing housing policies to permit construction of taller buildings in designated parts of Boston and the suburbs. His theories about housing and employment will appear in an upcoming issue of the Journal of Economic Geography.

''Given Greater Boston's role as a capital of the information age, it should not be losing ground relative to the country," said Glaeser, referring to the state's population declines. ''To keep pace with the country as a whole, we should be increasing our number of housing units by at least 1 percent per year, which would require about 3,300 permits annually."

''Boston is now in the lowest quartile of metropolitan areas in terms of the number of building permits issued for new housing, relative to the existing housing stock," said Raven Saks a Harvard University doctoral candidate who works with Glaeser.

As result, employment in the Boston metropolitan area has fallen. For example, the annual rate of employment change from December 2000 to December 2004 was minus 2 percent per year, according to the US Bureau of Labor Statistics.

Glaeser sums up his theory thus:

Communities with good housing and room for growth won't have any trouble attracting workers. But if Boston fails to increase its rate of housing construction by at least 1 percent per year, its growth rate will decline -- along with its population.

Florida points to the vibrancy that immigrants like Raman Sud, vice president of mValent Inc., a Burlington software company, bring to Greater Boston. Sud, 44, emigrated to the United States from India in 1983 and enrolled in Temple University in Philadelphia. He left four years later with a degree in computer science and took a job in Silicon Valley at a telecommunications firm.

In 1994, Sud launched his own venture, but closed it after nine months. Two years later, he moved to Boston.

''I was drawn by two things: the Internet boom, which was taking off, and the density of higher education institutions," said Sud.

Florida said keeping the immigrant pipeline open is vital to this country's future. And, he said, more should be done to bring the children of low-wage immigrants who have settled here into the mainstream.

Federal statistics might explain why: By 2006, the United States will have 151 million jobs, but only 141 million workers to fill them, according to the Government Accountability Office. That gap is expected to widen as baby boomers (workers born from 1946 to 1964) retire.

Other countries also anticipate a brain drain. Last week, the European Union's executive body announced plans to develop a common immigration policy to help ease a future labor shortage in Europe. In 25 years, the workforce of the union's 25 member countries will drop by 20 million. The new policy is expected to call for more skilled immigrants to help maintain economic growth.

Meanwhile, some foreign students are traveling to other countries such as Canada to study, rather than to the United States, because of US visa restrictions that are supposed to prevent potential terrorists from entering the country.

Florida, though, contends that too many restrictions will cause the country to lose talent.

Diane E. Lewis can be reached at 

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