BOSTON - February 14, 2023 - Economic studies tie healthy manufacturing employment and ecosystems to greater economic resilience and innovation, which is of particular importance to the Boston region, and the revitalization of American industry is nationally acknowledged as critical to building a middle class and equalizing wage disparities. New data however show that there has been loss of industrial land over the past decade in the Metropolitan Area Planning Council’s (MAPC) region, spanning 101 cities and towns. MAPC provides insight into the issues facing industrial businesses and workforce and provides recommendations to mitigate the loss of industrial real estate.

“Land, Economy, Opportunity: Industrial Land Supply and Demand in Greater Boston” provides a baseline understanding of the industrial sector and presents a spatial analysis of the sector utilizing two main data sources - assessors records and CoStar. The report supports existing literature that links industrial sector employment to inclusive economic development for communities of color and in providing well-paying jobs to workers without access to a college degree.

Between 2011 and 2021, the region lost 10.9 million square feet of built industrial space – that’s approximately 190 football fields-worth of space. Nearly 75 percent of the loss occurred in MAPC’s Inner Core subregion, which includes 21 communities that radiate from Boston.

While industrial space in greater Boston declined 3.5 percent over the past 10 years, the utilization of remaining space actually increased by 6.5 percentage points over that same period. In other words, there is more industrial space in use in 2021 than there was in 2011.

“We have incredible need and demand for housing in Greater Boston, especially in the inner core of the region, but the pressure to convert industrial space to housing and other uses has made it hard for industrial firms to afford to stay, or for new firms to find space," said Jessie Partridge Guerrero, research manager at MAPC and one of the report’s co-authors. "We need to preserve industrial areas strategically, especially for smaller industrial firms, entrepreneurs, artists, and others who might be well-suited to co-locate with housing or retail space.”

In 2011, approximately 36 million square feet, or 11 percent of the region’s inventory, sat vacant. Now, regional industrial vacancy rates have decreased significantly to 4.4 percent, and there is no more cushion for additional loss.

The vacant space allowed for industrial sector growth. But despite the cushion, rents grew by 34 – 41 percent (adjusted to 2021 dollars), indicating strong demand and willingness to pay by industrial users. Now, any increase in demand or continued loss of industrial space – not compensated for by new construction – will continue to drive rent increases, threatening the survival of industrial firms throughout the region.

If the supply of industrial space in the Inner Core becomes increasingly constrained and expensive, some firms less able or willing to pay for an Inner Core location will be forced to move to a suburban submarket or even farther afield, where the land costs are lower. This scenario could have rippling impacts on our region’s transportation networks, housing, workforce, and equity.

Not all subregions experienced loss of industrial space; MAPC’s South West Advisory Planning Committee and North Shore Task Force saw modest expansion. Further research is warranted to look into what has driven this expansion and to understand whether particular industry subsectors, such as demand for logistics space to serve e-commerce businesses, have driven this growth.

“Cities and towns are being proactive and finding creative ways to protect and/or update current zoning, incorporate special permit requirements to hold on to their industrial firms, and allow new industrial tenants to move in, but more coordinated efforts at the local, regional and state level are needed to bring these strategies to scale,” said MAPC’s Chief of Economic Development Angela Brown.

MAPC makes several recommendations in “Industrial Land Supply and Demand in Greater Boston,” divided into municipal stakeholders and regional efforts, to begin to engage in the issue of industrial displacement and its effects on economic development, including:

• Integrate industrial land use and planning to master plan and economic development planning processes. Establish a baseline inventory of the local stock of industrial land and the businesses that occupy that space.
• Utilize land-use tools, including zoning and permitting, to combat real estate pressures on industrial land. Limit non-industrial uses like housing, big-box retail, and self-storage in core industrial areas to maintain affordable real estate.
• Create incentives for the development of light industrial space in mixed-use developments. Examples of such uses can include Food Production uses like butchers, confectionery manufacturing, breweries, and wine & liquor wholesalers, as well as Arts & Crafts Manufacturing.
• Consider transportation needs when planning and permitting industrial spaces. Encourage site design conducive to ridehailing, shuttle, bicycle, or transit travel, to the extent possible.
• Establish a regional or subregional economic development collaboration to retain and grow the industrial base to bolster well-paying and accessible jobs in the region.

This report is the only research done in the region since 2002 that provides an overview of the regional industrial sector. It should be used as a foundation for additional research that can support local and state decision making regarding land use and economic development, and contribute to the creation and retention of family-sustaining jobs – key actions areas of MetroCommon 2050.

“The industrial sector is made up of many different economic activities, such as production, distribution, and repair, that people don’t always think of when they hear ‘industrial.’ These activities are all part of a resilient regional economy and can offer better pay and benefits to workers without a college degree, or workers with limited English-language, than alternatives in retail or food service,” said Partridge Guerrero.

MAPC will host a webinar on Thursday, Feb. 16 at 2:00 p.m. to present the research and host a panel discussion with regional and national experts. Register online.