The good news is the Boston area is hardly alone in facing serious headwinds from the pandemic’s upending of work patterns and the uncertainty it’s introduced about our economic future. The bad news: simply having plenty of company in our misery does not mean we can sit back and wait to ride some broad trend that will eventually pull us out of the hole we’re in. 

That’s the message from a report issued by the Massachusetts Taxpayers Foundation, “Urban Economies on the Precipice,” which paints a dire picture of the state of things in Boston and five other major US metropolitan areas.

Average office vacancy rates in major US cities hover around 50 percent (it stands at 30 to 35 percent in Boston). Transit ridership in the metro regions, home to the six largest public transit systems in the country, is down sharply. Downtown foot traffic is off by 30 to 40 percent in five of the cities and by a whopping 66 percent in Washington, DC. 

The driver of all the disruption: a shift to remote work that took hold when COVID hit, but has quickly become a permanent change in how white-collar workers do their jobs. The report says the rate is now “settling” at about 30 percent of work being done remotely. 

“This is not a Boston phenomenon,” said Doug Howgate, president of the Taxpayers Foundation. But how well the region fares under the new reality, he said, is very much under our control. The question now is “how Boston reacts to a global phenomenon,” said Howgate.

In many ways, the roadmap the report lays out for how the region should respond is the same one local leaders have advocated for years – but with added urgency now tacked on. 

“For us to meet the moment here and make sure the area thrives in this new world, we’ve got to get our act together in a few ways,” said Howgate. 

With the second highest rents in the country, the report says, the Boston area needs a much more muscular response to the need to build more housing to temper the run-up in housing costs. 

We’re also near the top when it comes to time lost to traffic congestion. Meanwhile, the report says a quarter of transit users in the Boston area spend more than two hours per day getting to and from work, a major inhibitor of efforts to get people to return to the office. All of that points to the urgent need to get the MBTA out of its death spiral and back to some semblance of a smooth functioning transit system 

Beyond attention to those fundamentals, the report says the region needs to double down on exploiting its advantages as a leading competitor in the innovation economy. It points to the big state-backed life sciences initiative as the sort of thing we need more of. 

Howgate said yesterday’s announcement that Cambridge was selected – following a full-court press by state officials, Rep. Richard Neal, and UMass president Marty Meehan – to be an “investor catalyst” hub for a new federal health research center is a great example of a win in that competition. 

Turning the usual slow-and-steady philosophy on its head, the report says fast adaptation is the only way to weather the changes and come out in good shape. “It’s a sprint, not a marathon,” it declares. 

Underscoring the need for fast response to changing conditions, the report suggests that the pandemic-driven disruption will soon be followed by another major convulsion, estimating that  artificial intelligence could replace as many as a quarter of US jobs. 

“Generative AI” will exert further “downward pressure on service jobs and demand for office space,” the report says. 

Research has already warned, before any impacts of AI, of an “urban doom loop” from dramatically reduced office occupancy rates. A reduction in commercial real estate values could pose significant “financial risk to banks and cities,” the report says.   

If you need to recognize there’s a major problem in order to tackle it, Howgate said he at least sees positive signs that state leaders understand the need to move aggressively on multiple fronts. 

Between things like the push to reauthorize the state life sciences initiative, a housing bond bill expected to land soon, and tax relief aimed at maintaining the state’s economic competitiveness, he said, “you’re beginning to see the outlines of a plan.” 

MICHAEL JONAS

FROM COMMONWEALTH

Tax relief: House and Senate leaders unveiled what they called a generational tax relief package that includes nearly every tax break the two branches had discussed over the last two years and stayed within the budget for this year by reducing the size of a handful of them. 

– The tax cuts that were trimmed back a bit included the child and dependent tax credit and the reduction in the tax on short-term capital gains. The House had proposed reducing the 12 percent tax on short-term capital gains to 5 percent – the same as the tax on regular income – but settled for lowering it to 8.5 percent. 

– The tax breaks will put more money in the pockets of low-income residents, renters, seniors, housing developers, and businesses. The package also includes a significant reduction in the estate tax, doubling the threshold for the tax to $2 million.

– Gov. Maura Healey reacted very positively to the tax relief package, but didn’t say whether there were items she might veto.  Read more.

Tax cap change: The tax relief package includes a House provision significantly altering a voter-approved tax cap law. The law, which returned nearly $3 billion to taxpayers in 2022, gives excess tax collections back proportionally to how much the taxpayer paid. The change will split up the excess tax collections equally among all taxpayers. 

– Lawmakers said the change was needed to bring greater equity to the process, but Paul Craney of the Massachusetts Fiscal Alliance called it a “a socialist wealth redistribution scheme.” Read more.

Food pantry opens at college: Roxbury Community College opens a food pantry to address growing food insecurity on campus. A recent survey of 132 college students found that 81 were worried that the food they had purchased would run out before they could purchase more. Read more.

OPINION

Planetary CPR: Dr. Brita Lundberg asks why the US is locking down for climate change when it should be practicing aggressive planetary CPR. Read more.

 

FROM AROUND THE WEB

BEACON HILL

In the ongoing chaos enveloping state oversight of the cannabis industry, a spokesman for the state cannabis commission fired off a letter to lawmakers who recently called for a hearing on the sector, rejecting their contention that the commission is mired in turmoil. (Boston Herald) 

Lawmakers are considering a new commission to review the child welfare system and suggest reforms. (MassLive)

MUNICIPAL MATTERS  

A group of Boston city councilors is urging the Wu administration to declare a state of emergency at Mass. and Cass and blasted the administration for not sending officials to testify at a hearing on the issue. (Boston Herald) 

The Worcester city council voted Tuesday to adopt a new state building code that calls for electrification of new construction next July. (Worcester Telegram)

The African Heritage Reparations Assembly releases a detailed report on how much money Amherst needs to raise for reparations and how it should be spent. (Daily Hampshire Gazette)

HEALTH/HEALTH CARE

Cambridge will become the home to one of three hubs funded by the federal government to accelerate treatments for cancer, Alzheimer’s, and other diseases. The focus of the Cambridge hub will be on financing the cures of the future. (WBUR)

WASHINGTON/NATIONAL/INTERNATIONAL

A New York state judge ruled that Donald Trump persistently engaged in fraud in inflating the value of real estate assets, a major victory for the state’s attorney general, Letitia James, in her civil lawsuit against Trump, which could go to trial as soon as next Monday. (New York Times)

ELECTIONS

Preliminary round-up: Incumbent Beverly Mayor Mike Cahill and businessman Jamie Zarella will face off in November. In Fitchburg, incumbent Mayor Stephen DiNatale will face City Councilmember Samantha Squailia. (MassLive)

BUSINESS/ECONOMY

Against the backdrop of the UAW strike, New York Times editorial writer Binyamin Applebaum makes the case for a 32-hour work week. President Biden joins striking workers on the picket line in Michigan. (Associated Press)

The Federal Trade Commission and 17 states, including Massachusetts, filed a sweeping antitrust suit against Amazon. (NPR)

HOUSING

The Mashpee Wampanoag Tribal Council voted unanimously to enact a state of emergency due to a homeless crisis, with the goal of getting more federal funds and grants to eventually structure its own tribal housing authority. (Cape Cod Times)

IMMIGRATION

GBH profiles a New Bedford teenager juggling school and work at a seafood processing plant who is part of a surge of unaccompanied minors that have entered the US.

TRANSPORTATION

If you were betting that things couldn’t get any worse on the T, you lose. The tracks along the Green Line Extension, which has been open for only a year, have been found to be so defective that speed restrictions are now in place slowing trains to 3 miles per hour – average walking speed – over a  total of 1 mile of track. (Boston Globe)

The express commuter train between Worcester and Boston is getting less “express,” adding stops between Worcester and West Natick and changing departure times between the line’s terminal stations. (Worcester Telegram)

ENERGY/ENVIRONMENT

Despite its 4-1 rejection of an offshore wind terminal in Salem Harbor last week, the agency is giving the developer a second shot at winning approval. (Salem News)

CRIMINAL JUSTICE/COURTS

The police chief in Dighton steps down after being charged with participating in an insider-trading scheme that netted more than $2 million. (WBUR)

MEDIA

The new nonprofit Plymouth Independent will bring former Boston Globe investigative reporter Andrea Estes onto its staff.  Here’s more from Dan Kennedy at Media Nation.