Communities Along Route 128 – A Closer Look
Patrick Sullivan | July 11, 2015
128 Business Council regularly examines census and economic data for the communities we serve along the Route 128 Corridor. * We do it to gauge the economic health of the Corridor and to look for correlations between economic activity and travel patterns. We also just do it because we’re data nerds. *(Woburn, Burlington, Lexington, Waltham, Lincoln, Newton, Needham, Weston, Wellesley)
The communities along the corridor are among the most prosperous in the Commonwealth, both in terms of the residents that call this area home and the corporations clustered in these communities. Most of these communities have the coveted mix of a well-educated population, highly ranked public school systems, and a strong base of hi-tech and life science corporations that are highly profitable and pay their employees a weekly wage well above the state and national average.A dive into recent U.S. Census data and data from Massachusetts Executive Office of Labor and Workforce Development (EOLWD) shows that these communities, which I will refer to as the “128BC Corridor”, are the linchpin of the Massachusetts economy. Within these communities you will find the highest concentration of residents with graduate degrees, the finest public schools, and employers that pay high weekly wages. This has created a micro-region that has become amazingly resistant to economic downturn, even during sharp economic declines such as the recent Great Recession. Employment The Great Recession and housing crisis resulted in record unemployment and home foreclosure. The 128BC Corridor communities were not immune to the recession, although they fared better than many other areas of Massachusetts. A look at employment numbers in the 128BC Corridor between 2006-2014 illustrates stagnant job growth and in some cases job losses between 2008-2010. However, job growth over the last few years has been impressive. For example, Lexington, Waltham and Needham have seen the number of employees working at companies in these communities increase by over 12% between 2010-2014. While there has been some growth in the retail and service industries in these communities, the bulk of job growth came from tech and life science companies that have either moved into these communities or expanded their headcount. Wages The wages made by employees of companies in the 128BC Corridor has not uniformly increased in the way that overall employment has. Between 2011-2014 Newton saw a 14.81% increase in the average weekly wage of the workforce working in Newton, going from an average of $1,179 to $1,384. In Lexington, wages increased 9.95% in this same time frame, from $1,674 to $1,859. The impressive growth in wages in Newton and Lexington contrasts with stagnant or falling average weekly wages in many other 128BC Corridor communities. Salaries dropped slightly between 2011-2014 in Burlington (-0.67%) and Waltham (-0.58%), even though both of these communities have large concentrations of high-paying tech and life science jobs. The high wages from these employers may be offset by growth in retail employment in these particular communities that pay lower hourly wages to their workforce. Housing Communities in the 128BC Corridor represent among the hottest housing markets in the state, and perhaps the country. The draw of excellent public school systems, quality housing stock, and proximity to high-paying jobs both along the Route 128 Corridor and in Cambridge and Boston make it easy to understand why these communities are so desirable. As a result, median home prices in these communities are among the highest in the state. According to 2014 data from the Warren Group, six of the 9 communities in the 128BC Corridor have median home prices over $800,000. Woburn, Burlington and Waltham have median home prices between $350,000-$500,000, which is closer to the average median price for all of Massachusetts. The demand for housing in the 128BC Corridor has not necessarily led to a corresponding increase in the number of housing units being built in these communities. According to the most recent Census data available, there was a 2% increase in housing units in the 9 128BC Corridor communities between 2010-2013. Waltham and Newton had the largest increases, each with 6% more housing during this time period. Surprisingly, most of the new housing came in the form of new single-family homes. With a dwindling supply of land available for new residential development in the 128BC Corridor and ever-growing demand for housing in these communities, one might assume that housing growth would come in the form of multifamily housing. However as I will explain below, many 128BC Corridor communities perceive multifamily housing as a potential drain on municipal resources. Many of the 128BC Corridor communities are leery of permitting construction of new housing that will create a net increase in the overall quantity of housing units in the community. This reticence stems from the commonly held assumption that increases in housing create a corresponding demand on municipal services and the local public school system. The quality of education in these communities comes with a price – the average cost per pupil often far exceeds the average property tax bill. As a result, more students will often result in higher property taxes, even with more housing added to the tax roll. There is research that refutes this scenario, but many communities continue to establish policies aimed at avoiding the consequences of rapid growth in school enrollment. New construction in 128BC Corridor communities comes most commonly in the form of “teardowns.” A teardown is when smaller and older homes are torn down and replaced with new 3,000-45000 square foot single-family homes. This results in newer, larger homes with higher property tax bills, but with the same number of inhabitants. This scenario is ideal for municipal administrators in largely residential communities seeking increased property tax revenue to fund town services. Education On average, the residents of the 128BC Corridor are more likely to have a bachelor’s degree or graduate degrees than any other area of the state. Over 67% of 128BC Corridor residents have bachelor’s degrees, which is more than both the state average (39.4%) and the average for all of Middlesex County (50.7%). 38.16% of 128BC Corridor residents have graduate degrees, far exceeding the state (17.1%) and county (24.8%) average. With such a highly educated workforce clustered into 9 communities, it's no surprise why so many multi-national corporations have offices in these communities. The quality of public education offered by many of the cities and towns in the 128BC Corridor is often citied as the driving force behind the highly competitive housing market. Boston Magazine publishes and annual ranking of the best public school systems in Massachusetts. The Boston Magazine rankings are arguably the most widely viewed ranking of Massachusetts public schools, making them a powerful tool for town administrators and real estate agents. Lexington (#2), Newton South (5), Wellesley (6), Weston (12), Needham (14) and Lincoln-Sudbury (19) high schools all fall within the top 20 of the Boston Magazine list. Barriers to Entry The economic indicators listed above paint a picture of prosperity for the 128 Corridor communities. However, this prosperity has created communities with a steep barrier to entry for first-time homebuyers or those with a mean household income at or below the state average ($90,877). While single-family homes in Burlington and Woburn can still be purchased for under $350,000 (about the state median home value), a community likes Waltham that was once considered affordable now has average single-family home values over $400,000. With a limited number of multi-family and rental housing being constructed in these communities, there is a distinct lack of economic diversity of many of these communities. Transportation
So what does this all mean for transportation? It means the strain on our aging roads, bridges, and transit equipment continues to grow. 128 Business Council has seen our ridership grow steadily over the past 2 years – enough to require the Council to add additional vehicles to meet demand. This demand is a direct result of increased hiring at the companies along Route 128. Average daily vehicle traffic is also increasing on Route 128, a roadway that is already 125% over capacity. There are no easy answers for the problem of traffic. The 128BC Corridor is a victim of its own success, and while additional transit options could help to alleviate a small percentage of traffic in the short term, long-term investments need to be made to plan and fund the type of additional transit infrastructure necessary to make a real impact on the volume of drive-alone traffic in the corridor.