MASSACHUSETTS IS FACING a housing crisis that poses a dire threat to its economy. It is one of the most expensive states in the country, due in large part to the cost of housing: it is the third most expensive state in the nation to rent a home and the fifth highest to buy a home. At a time when we need to increase production of housing, costs and other factors are making it increasingly difficult to build new units. This all contributes to a troubling outmigration of talent and the inability of employers to find workers to fill open jobs.

Members of the Massachusetts Business Roundtable – CEOs and senior executives from large employers across the Commonwealth – reported in a survey last spring that 75 percent anticipated some difficulty in filling jobs in the next year. As one business leader said in that survey, “If you want the economy to run, you have to have an affordable place for people to live and reliable transportation.”

Yet, Massachusetts is not affordable. The state was ranked 47th out of the 50 states in its cost of living index and 49th in cost of doing business in CNBC’s 2023 Top States for Business Rankings. As another business leader said in that survey, “The greatest challenge facing Massachusetts is affordability.” The greatest driver of affordability is the cost of housing.

Fortunately, leaders from state government, municipalities, quasi-public agencies, and nonprofit and advocacy organizations are working diligently – individually and collectively – to address our housing challenges head on. The business community is poised to be an active collaborator in this all-stakeholder approach.

How do we address this crisis?

First, business leaders must sound the alarm about the impact of the high cost of housing on the state’s economy and competitiveness. In Massachusetts, our competitiveness is fundamentally about people, yet people are leaving.

According to the US Census, in the year ending July 2023, Massachusetts had a net loss of about 39,000 people and over the past three years, the state lost a net of 122,000 residents. Most alarming is that in 2022, nearly 60 percent were aged 25 to 44, young people and families who help drive the state’s economy today and into the future. For an economy historically based on access to the best talent in the world, this is a direct threat to the state’s competitiveness.

Second, it is imperative that significant housing legislation is passed this session, and employers must be active partners in that effort, both locally and at the state level.

There is no shortage of good ideas, including the bold and comprehensive $4.1 billion bond bill — the Affordable Homes Act — filed by Gov. Healey, as well as others from organizations like NAIOP, the Massachusetts Housing Partnership (MHP), Citizens’ Housing and Planning Association (CHAPA), and legislators.

Allowing accessory dwelling units, or ADUs, across the Commonwealth, repurposing vacant commercial properties and surplus state land for housing, recapitalizing programs like HousingWorks and Commonwealth Builder, and new ideas such as the governor’s proposed Seasonal Communities Designation and Momentum Fund all could help increase housing production and warrant consideration.

In addition, innovative zoning reforms, such as the MBTA Communities Act, must continue to be supported and enforced. And new ideas for homeownership such as tax-advantaged savings programs – like Section 529 Plans for education – should be explored. Fifteen other states currently offer tax-programs to facilitate the down payment for purchasing a home, with Montana the first to initiate such a policy in 1998.

Finally, business leaders know there must be robust data collection and accountability. The Affordable Homes Act requires the Executive Office of Housing and Livable Communities to “prepare a Statewide Housing Plan every 5 years based on regional outreach and robust data analysis.”

Others have called for the collection and tracking of local housing data, essential to both set and meet statewide housing production goals. The Minneapolis Federal Reserve Bank has created a Regional Housing Affordability Dashboard that sets housing targets and uses the dashboard “to ensure our collective accountability to them.” Plans, goals, data collection, measurement and accountability need to be key features of a comprehensive housing policy solution for Massachusetts.

Massachusetts is facing a housing crisis that is directly impacting our economy and competitiveness. The alarm is being sounded, and there is a shared urgency among public, private, and nonprofit leaders to take bold action to address it.

The business community stands as a willing and engaged partner in efforts to ensure that the state actively addresses its housing affordability challenges.

JD Chesloff is president & CEO of the Massachusetts Business Roundtable. Lisa Murray is the Massachusetts president of Citizens Bank and chair of the Roundtable’s board.