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BOSTON—“The sun is shining on the city of Boston,” observedBruce Percelay, chairman and founder of theMount Vernon Co., and while a look out any of thewindows at the State Room conference facility duringRealShare Boston on Tuesday would verify thatPercelay's comment was literally true, he wasn't talking about theweather. Peter Merrigan, CEO and founding partnerof Taurus and another member of the conference'sTown Hall Power Panel, put it another way: “If you're not having agood time in this business right now, you should probably findanother business.” Added John Hynes III, CEO andmanaging partner of Boston Global Investors, “I'vebeen in the business for 35 years, and this certainly feels like ahigh watermark to me.”

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The bullish outlook carried through the half-day conference,which drew approximately 200 industry professionals to a RealShareevent that was last held in New England's largest city in 2008.Following the downturn, the city came back earlier than many and,arguably, stronger than most.

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Greater Boston's biosciences corridor, for example, has becomethe world's largest. As John Barros, appointedthis past February as the city's first-ever chief of economicdevelopment, put it in his keynote address, “Boston isbooming.”

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Yet a boom period doesn't mean there are no challenges, andBarros, the Town Hall panelists and other industry experts homed inon one of the downsides of the dramatic uptick in multifamilydevelopment: an emphasis on luxury at the expense of middle-incomerentals. With about $19.2 billion of projects in the developmentpipeline, 80% of that is luxury development, and some panelistsquestioned how large the rental pool for such housing reallywas.

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Barros cited the one Greater Boston employment sector that isn'tseeing growth—manufacturing—and recounted the example of ahigh-tech manufacturer that recently moved its operations out ofBoston to western Massachusetts. A conversation with seniormanagement, Barros told the RealShare audience, revealed the reasonthe company was pulling up stakes: “They couldn't compete with theprice of housing.”

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Improving the affordability of living in Boston is among the keygoals of the administration of Mayor Martin Walsh, who was sworninto office this past January and named Barros to his current posta month latter. The others include eliminating the skills gap inthe Boston workforce and taking a regional approach to planning forgrowth.

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Barros said a plan to encourage development of low- andmiddle-income housing stock would soon be issued by the Walshadministration; among other things, it will create incentives inthe form of bonuses and tax credits. It will also propose zoningamendments to allow development of taller apartment buildings.“We're not afraid of height,” said Barros.

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Rather than mandate affordable components in luxury projects,though, Hynes proposed building affordable housing separately. “Thecity has dozens of vacant parcels in neighborhoods that could use ashort in the arm,' he said. Moreover, development costs inneighborhoods outside of downtown are often lower, meaning thatmore units could be built for less. The Town Hall panel wasmoderated by David Abramowitz, director andco-chair of the real estate group at Goulston &Storrs.

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Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.