Massachusetts should take advantage of historically low interest rates and make strategic investments in the “repair, refurbishing and expansion” of the state’s transportation system, according to the editorial board of Massbenchmarks, a journal published by the University of Massachusetts Donahue Institute.
Transportation disinvestment is a “genuine constraint on the future economic growth and prosperity of the Commonwealth,” the editors wrote. The other major issue for the future they identified was the poor performances of K-12 schools in cities. “In light of these challenges, the choice state leaders have made to freeze state capital investments seems shortsighted and counterproductive,” they wrote.
The editors also noted that high housing costs have been dragging on the economy and point out that “Increasing housing supply in areas of greatest need continues to be constrained by a myriad of archaic and highly restrictive state and local regulations.”
According to Massbenchmarks, investing in transportation and education would not only be beneficial to the economy, but would combat inequality, as well. However, housing is also a major factor in inequality. As the economist David Schleicher recently wrote:
Not only have land use restrictions limited growth, but they also play a central role in problems of inequality. In his review of Thomas Piketty’s work, Matthew Rognile showed that almost all of the gains to capital over the last seventy years have accrued to house and land ownership. The holders of scarce assets that play such a big role Piketty’s work are not like the landed aristocracy of yore, but are, in fact, the landed rich. But, rather than choice farmland, they own access to rich labor and consumption markets in the form of houses and apartments.
Similarly, restrictive land use restrictions affect virtually all of the other subjects discussed in this book. The number of jobs created by superstar firms is limited when there is no housing growth in the metropolitan areas in which they reside. Access to elite K-12 schools is conditioned on being able to buy property in the towns where they exist. And so on.
But overall, Massbenchmarks’ urging of strategic investments in the Massachusetts Bay Transportation Authority have struck an urgent note on a day during which almost all commuter rail service to South Station was canceled due to a signal problem. The lack of investment in transportation is not only a constraint on future growth, but a drag on current productivity.