Why small businesses are paying attention to housing

Monique Ching/Massachusetts Smart Growth Alliance.

Above: Ray Hamilton (left) and Rajia Abdelaziz are co-founders of a Massachusetts startup that produces jewelry that customers can use to contact police or loved ones during emergencies. Below: Estefanía Santoscoy. Bottom: Hamilton (left) and Abdelaziz.

Ray Hamilton and Rajia Abdelaziz have tripled their local startup, InvisaWear, over the last few months.

But when the founders asked their intern, Mariel Blanco, to come on board as a full-time staff member, she told them she could not stay in Massachusetts.

“I was really happy,” said Blanco, but she could not afford to live in the state.

The Lowell-based startup offers jewelry that customers can use to contact friends, family, or police during emergencies and is currently testing its products.

“It’s tricky when you’re a startup. We’re not a Gillette or Amazon; we can’t offer $100,000,” said Hamilton.

Blanco moved to Phoenix, Arizona, to live with family and now works remotely for InvisaWear part-time.

“It’s heartbreaking for us. (We said,) ‘We love you and want to see you,’” Hamilton said.

Recruiting and retaining talent is essential for business, but some are finding it difficult in a region undergoing significant housing pressures.

In a recent study, Northeastern University researchers found more than 67 percent of employers they surveyed cited housing costs as a barrier to recruiting and retaining talent to the Greater Boston area. When asked to rank the major barriers, respondents ranked “employees unable to find housing at adequate cost” as the third highest challenge behind “lack of qualified candidates” and “salary”, which they noted is likely related to housing costs.

“Companies with ten or more full-time employees responded with greater concern to these [housing] issues, especially establishments that lack national prestige,” the report states.

In addition to hindering their abilities to find and keep talent, some employers experience other obstacles that can arise amid housing pressures.

Estefanía Santoscoy plans to create 200 jobs in the next year through her startup Etiquette Bride, which allows brides to rent dresses and other wedding items at an affordable rate. Santoscoy, who is from Guadalajara, Mexico, was almost swindled by a rental housing scam she found over the internet.

“My friends had the same experience,” she said. She later found a place in Boston’s Back Bay neighborhood where she has lived for the past few months and had her lease extended through December.

Uncertainties abound in the startup industry, but the area’s tight housing market leaves little room for uncertainty. Those from outside Massachusetts often need short-term or flexible-term housing while they establish their businesses, but such arrangements are rare.

Instead, many of Santoscoy’s friends are staying at hostels or at Airbnb units, where people rent their homes to guests by the day.

“I had a huge advantage,” said Lea LeBlanc, who has lived in Massachusetts for some time. LeBlanc is the founder of Wunder, a company that develops women’s underwear to address medical needs.

Being familiar with the landscape was helpful, LeBlanc said, and she has family in the state if she needs support.

“Much research has shown that the most effective way to address the issue of rising housing costs is to simply increase supply to meet the rising demand,” the Northeastern report states.

The Great Neighborhoods bill aims to do that by requiring communities to zone for more apartments, by making it easier for homeowners to have accessory apartments, and by making the permitting process less burdensome.

Housing has become a key issue for the Alliance for Business Leadership after hearing increasing concerns from businesses over how housing is affecting their ability to find and keep workers. The ABL supports the Great Neighborhoods bill and has been conducting housing workshops educate its members.

Like in InvisaWear’s case, the Northeastern researchers observed employers are increasingly using telecommuting to allay some of the housing challenges and long commutes. Blanco said she would move back to Massachusetts without hesitation — if she could afford it. She is grateful that her marketing responsibilities allow her to work remotely for InvisaWear.

Hamilton and Abdelaziz, on the other hand, are trying their best to stay in the region even if it means a few hours on the road to and from work. Abdelaziz commutes from her home in Nashua, New Hampshire, to meet up with Hamilton in Billerica, Massachusetts, so the two can carpool to Boston.

“Commute-wise, it’s not ideal for us,” said Abdelaziz, with a laugh.

Support housing options to help recruit and retain talent in Massachusetts. Sign the Great Neighborhoods petition or write to your legislator to express your support for the Great Neighborhoods bill.

If you are a business leader and are interested in supporting the Great Neighborhoods bill, contact Dottie Fulginiti at dottie@ma-smartgrowth.org for more information.

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