Despite an uncertain economy, Michelle Wu pushes on with her grand plan for Boston Development Agency.

The world of urban real estate development has changed dramatically since October 2019. Boston’s office vacancy rates are at their highest in decades, and office values are projected to decrease for the first time in a year. Three major banks have gone bankrupt, and construction prices are rising due to soaring interest rates and material costs. Even the lab boom is slowing down, creating uncertainty for developers and investors. With all this turmoil, some argue that now is not the right time to overhaul the government agencies responsible for Boston’s development plans, reviews, and approvals, adding more uncertainty to the mix.

Michelle Wu, Boston’s new mayor, believes change is needed now more than ever. As a city council member, she was critical of both the Boston Planning and Development Agency (BPDA) and the City Planning Appeals Commission, particularly after a BPDA official pleaded guilty to federal bribery charges in 2017. Immediately after winning the mayoral election, Wu set out to introduce the BPDA dissolution bill, arguing that the agency is “isolated” from the governance and budgeting processes that other city departments are subject to. Wu believes that the development review process has led to short-term thinking and overtakes long-term plans, which is not in the city’s best interest.

Wu proposes centralizing planning and development work by establishing an urban planning and design department and an advisory committee that brings together all urban departments with planning functions. She has petitioned the state to dismantle the legal entities behind the BPDA and create a newly formed BPDA. However, for over 200 employees, the restructuring of government agencies was far from comfortable. Although it is unclear when the transition will occur, Wu argues that the urgency for structural change is increasing due to rising housing costs that are pushing many families out of Boston.

The BPDA and the mayor have great power to decide who appoints most of the directors and boards and decide what and where to build. For the past two decades, commercial real estate has been the driving force behind Boston’s tax base, and a boom in development has seen property tax revenues grow almost three times, from $925.9 million in 2002 to $2.94 billion this year. However, with the loss of experienced staff and a volatile economy, developers’ concerns are increasing. The uncertainty created by Wu’s proposed changes has made it difficult for developers to know what to expect next. Therefore, concern rises about the future of urban real estate development in Boston.

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