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Edward L. Glaeser

Sunny pitch to lure Hub’s industries

By Edward L. Glaeser
June 3, 2010

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FOR THE LAST three years, the Atlanta Development Authority has come to Boston to try to sell our hottest industries, like life sciences, on Atlanta’s low costs and well-educated workforce. Atlanta has grown by 1.2 million people since 2000, while Greater Boston’s population has grown by less than 200,000. Boston needs to work hard to remain a competitive location for the businesses that Atlanta is trying to poach.

Atlanta shares some advantages with other Sunbelt cities, like an absence of land use regulations and nor’easters, while some people, doubtless lacking in character, have been known to complain about our weather. Over the 20th century, no variable has done a better job at predicting city population growth than January temperature, and there is nothing we can do about that.

Boston is not only cold but old and the country has moved to newer, car-oriented cities, including Atlanta. Some outsiders, assuredly also lacking in character, gripe about driving Boston’s streets, which were built around foot traffic and streetcars. The Big Dig’s cost reminds us how hard it is to retrofit a pre-car city for the automobile, and unless gas prices permanently spike, Americans will continue to move to Sunbelt sprawl.

Greater Atlanta has long been a builders’ paradise; Greater Boston is not. Over the last five years, the Atlanta area has permitted more than 210,000 units, while the Boston area has permitted fewer than 56,000 units. Middlesex County has about 50 percent more land than Fulton County, Georgia, and a similar density level, but Fulton permitted approximately three times as many homes over the last five years. Plenty of people want to live in Massachusetts, but our maze of local land use regulations has made it enormously difficult to build.

Restricting construction in a strong market makes housing unduly unaffordable. The latest Census data show that median housing prices are 60 percent higher in Middlesex County than in Fulton. The latest realtors’ data show that the median sales price in Boston is $322,000, as opposed to $110,000 in Atlanta. There is a great irony in the fact that progressive Boston, which claims to care about the unfortunate, has done so much worse than Red State America at providing ordinary Americans with affordable housing.

And now the state is considering repealing Chapter 40B, which is the most important tool it has against communities that make Massachusetts less competitive by restricting construction. The repeal would make it easier for Atlanta to attract our businesses by making Massachusetts even more expensive.

Atlanta is a particularly tough competitor for Boston because it is also well educated — 46.3 percent of the adults in Fulton County, which surrounds Atlanta, have college degrees. The share of adults in Middlesex County, that have completed college is only slightly higher: 48.5 percent

Greater Boston has thrived — despite its weather and high prices — because of its brains. Education has proven to be a great source of urban success. As the share of people with college degrees in your metropolitan area increases by 10 percent, your income rises by 8 percent, holding your own education constant. The concentration of skills in Greater Boston enables people to learn from one another and provides a steady flow of smart entrepreneurs. Boston proved able to reinvent itself since the 1970s because the same density that once helped hogsheads onto clipper ships now speeds the spread of ideas. Yet Atlanta is challenging us there as well, with its own myriad universities and Georgia’s Hope Scholarship program, which provides free public tuition and some private tuition to any Georgia resident with decent grades. The program pays off by both educating Atlanta’s children and attracting smart, education-oriented parents.

Other cities are trying to recruit our people and businesses. We can’t fix our weather, and we shouldn’t build more roads, but we can build more housing and improve our school systems. Boston’s human capital is the bedrock of the region. We need to provide the education, quality of life, and affordable homes that will keep that human capital here.

Edward L. Glaeser is a professor of economics at Harvard University and director of the Rappaport Institute for Greater Boston. His column appears regularly in the Globe.

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