In a Billerica subdivision, making it in the middle class is still a full-time job
JOHN AND LAURA PETERS ended up on Heritage Road in much the same way many others have landed on this quiet street of split-level ranch homes in a Billerica subdivision. After dreaming big, they came down to earth.
The street of well-kept homes, part of a 1970s development called Heritage Heights, is nothing if not down-to-earth. The three-bedroom houses are comfortable but hardly cavernous, decidedly of the pre-McMansion era. They each have a modest-sized living room and dining area on the main level, along with the bedrooms, and a large family room on the lower level. Heritage Heights is laminate, not granite. The families drawn here are neither those struggling at the edge nor the high-fliers whose outsized incomes feed an insatiable consumer appetite for the best and biggest of everything. In this land of the minivan and occasional backyard pool, the half-acre lots provide plenty of elbow room compared with more urbanized settings, but neighbors can still call out and talk to each other while working on the lawn.
It’s a place that has worked well for the Peterses, though when they set out to buy their first home four years ago, the couple started looking in nearby Reading, where John grew up and his parents still live. But a dose of real-estate-price reality quickly threw cold water on the idea of buying a home there. Billerica’s neighbor to the south, Bedford, where Laura grew up, was also out of the question. Indeed, they found nearly every community in this area north of Boston out of reach. “I figured we’d probably end up in New Hampshire,” says John. So when they came upon the tidy split-level on Heritage Road, the Peterses jumped at the chance to become homeowners in what seemed like the last affordable community in this swath of suburbia.
Heritage Heights is a place where, even three decades ago when the first residents moved in, families seemed to land not necessarily because they set out determined to live in Billerica, but because the town of nearly 40,000 people offers a toehold into middle-class life that can be hard to find in many nearby communities. Once there, however, families seem to find this once-rural town, which is increasingly a bedroom suburb to Boston, a solid community in which to put down roots.
Ten years ago, in the inaugural issue of CommonWealth, founding editor Dave Denison set out to take the pulse of the Massachusetts middle class by seeing how families were faring on Heritage Road (“On Heritage Road,” CW, Spring ’96). CommonWealth went back there in its fifth anniversary issue (“Return to Heritage Road,” CW, Spring ’01), and now we’ve gone back again. In every visit, the report back has been consistent in its inconsistency. To be middle-class in Massachusetts, it seems, is to be caught up in conflicting sentiments.
Then, as now, residents on Heritage Road by and large know they have much to feel good about and be grateful for. There are no obvious signs of economic distress in these well-tended homes. But conversations with those who live here make clear that there is an undercurrent of angst, a feeling that life seems to throw one curve after another at those who have worked hard and played by the rules but still struggle to get ahead.
A decade after CommonWealth first visited here, that mixed outlook remains, even if the cares have, in some cases, changed. Worries about retirement seem to loom ever larger, both for those looking ahead to it and for some already there. Stopping to smell the roses is now done alongside worrying about everything from health care costs to soaring property taxes. And wondering whether your children will be able to do better than you have has, for some, been replaced by the downsized hope that they will simply do as well.
THE PETERSES: ‘WE ARE FORTUNATE’
For $320,000, the Peterses considered themselves lucky to get in on a real estate market that, in 2002, was still rising by the month. Even if they found themselves in Billerica somewhat by default, they say they couldn’t be happier. Their neighbors are friendly, and they love their home and their easy commutes to work.
Firmly in the white-collar world—John is a manager at Picis, a Wakefield software firm, and Laura is a financial analyst at nearby Hanscom Air Force Base—the Peterses are part of a demographic wave in town that’s been in motion for at least a decade, one that is bringing more and more professionals to once decidedly blue-collar Billerica.
Their four years on Heritage Road have been good ones, they say, especially with the arrival of their first child, Justin, in November. With both of them in desirable jobs, John says, they’re feeling “pretty well off” and probably doing better than many around them. But it’s not as if they haven’t worked for it. John, 39, who got a computer science degree from the University of Lowell (now the University of Massachusetts–Lowell), has worked his way up after a dozen years at Picis, where he is a manager.
Laura, 40, left college after one year and has worked 21 years for the Defense Department at Hanscom. But growing weary of what she calls the “dead end” data management position she held for many years, Laura went back to school in her 30s, completing her B.A. and receiving an M.B.A. through a branch of Western New England College operated at Hanscom.
John says they are “definitely doing better than my parents,” but he quickly qualifies his answer by pointing to one difference. His parents were able to buy their house in Reading and raise a family in it, “with only my dad working,” John says of his father, an electrician by training, who manages several office buildings in Cambridge.
The Peterses say they could probably get by on John’s salary alone—“Moneywise, we’re probably right on that line,” he says—but for now, they’ve decided not to veer too close to that line. In late January, Laura was getting ready to go back to work following maternity leave, and they had recently visited the on-base daycare center at Hanscom, where she’ll drop Justin off in the mornings.
It’s not just Laura’s income they didn’t want to give up. The Peterses were also thinking ahead to retirement. “I’m not sure if I’d want to give up 21 years with the government,” says Laura. If she stays at Hanscom, Laura will be eligible for a pension at age 55, at which point she will have already recorded more than 30 years of service.
While Laura, in her government job, can count on pension at a young retirement age, John entered a private-sector work world that was giving up on defined-benefit pensions, and at a time when even faith in the security of Social Security was fading. John figures he’ll have to fend for himself. “Which is fine, since at least I know,” he says with a laugh that seems equal parts resignation and roll-with-the-punches resiliency. “I’ve got a 401(k) and a couple of IRAs, so I’ve definitely been thinking about it,” he says. “But I’ll be 70 by the time I can retire, with the way it’s going.”
The Peterses have many dilemmas to face before retirement. They might want to have another child, in which case John says they might look for a larger home. And they haven’t paid serious attention to the Billerica schools and the question of whether they’ll want to stay in town when Justin hits school age. As Laura rocks the sleeping 3-month-old in her lap, that’s a decision that seems a long way off.
THE CARROLLS: ‘EXACTLY WHERE I WANTED TO BE’
Although she is about the same age as the Peterses, who represent the newcomers to Heritage Heights, Lori Carroll, who lives a few doors down, is very much part of the old guard on Heritage Road.
The 38-year-old telecom sales representative is now the proud owner of the same Heritage Road home that she moved into 31 years ago with her parents and two sisters; she now shares it with her 11-year-old daughter, Briana, and her fiancé, John. But Lori didn’t come to be ruler of the family roost through inheritance or a parental hand-off; she paid for it.
After splitting up with her husband in the mid-’90s, Lori and her daughter moved back in with her parents. She landed a good job at iBasis, a Burlington telecommunications firm where she still works today, and for her, life back on Heritage Road was good. But it wasn’t as good for her parents, who divorced five years ago. They needed to sell the house in order to divide their assets, and to Lori that meant the life she was building for herself and Briana might come undone. At the time, she pegged her sense of stability on remaining in the comfortable confines of Heritage Road.
“Right now I consider myself middle-class because I am able to live in this house,” she told CommonWealth five years ago. “But if I have to leave, I don’t know.”
The story had a happy ending. Her parents agreed to sell her the house for a price she could afford—$270,000, at a time when it might have fetched as much as $320,000. Then she built an 800-square foot addition on the house, creating a cozy in-law apartment where her mother, Rosemary, lives. The arrangement is especially helpful if Lori needs help caring for Briana, but with a separate outside entrance to the apartment, the two women also maintain their own lives. “We’re very respectful of each other,” says Lori.
Asked to size up the last five years, Lori says, “It’s been awesome. This is exactly where I wanted to be. This is where I envisioned myself, and I’m here.”
Which is not to say that she has taken her good fortune lightly, or has no worries going forward. Lori knows she dodged a big bullet when she held on to her job during the big telecom downturn of a few years ago, when the industry shed thousands of positions. She regrets not having received a bachelor’s degree—she has a two-year degree in office administration from Middlesex Community College —and worries about what that could mean on the job market if she were ever cut loose.
She’s unsure how she’ll finance her retirement. And she has no idea how she’ll manage to pay for Briana’s college education, but she’s determined that her daughter will get one. “One way or another, she’s going,” says Lori.
“I don’t want her to settle,” she says of Briana. “I don’t want her to just get by or think someone’s going to save her, like I thought,” referring to her own dreamy view when she got married at age 23.
Just how determined she is to drill a set of life lessons into her daughter becomes clear when Lori poses a pop quiz to Briana after she arrives home on the school bus one day.
“What is my theory, Briana?” she asks. “What do I tell you about growing up?” Lori turns her head and delivers an aside. “We’ll see if she remembers.”
“Don’t get married till you’re 30,” says Briana.
“That was a good start,” says Lori. “But it wasn’t 30, it was 35, so get that right.”
Next question: “Go to…?”
“College,” says Briana.
“Friends. And get a good job.”
“She’s going to learn from her mother’s mistakes,” says Lori.
THE GIOVINOS: NO EMPTY NEST
Even more representative of the Heritage Heights old guard are Joanne and Tony Giovino. Living one street over from Heritage Road, on Eastview Avenue, the Giovinos were among the original residents who paid about $40,000 each for the new homes in the 1970s. And CommonWealth has spent time with them on every one of its visits over the past 10 years.
Tony retired in December, closing up shop on Main Street Services, the Medford service station he successfully operated for 25 years. Not bad to be able to put up your feet—and lay down the socket-wrench set—at the not-very-ripe age of 58. But Tony earned that respite with plenty of 60-hour workweeks. And Joanne credits him with being a pretty savvy investor as well, and his homework was in evidence: A paperback titled How to Make Money in Stocks was lying on the kitchen counter during a visit to the comfortable home where they have raised two daughters.
Joanne, who grew up in Lynn, has a degree from Salem State College, but she hasn’t worked full-time since her children were born. “I’m always the first to say that I’m a very lucky person,” says Joanne. Like Lori Carroll, Tony, who grew up in Walpole and got a two-year degree in business, has some parental wisdom that he imparts to their children. “Pick something and go for it. That’s what I did,” he says. “Whether it’s hairdressing or whatever it may be, find something that you want to do and go after it. It’s all what you make it.”
Though a big believer in self-made success, Tony isn’t so sure it’s as easy to come by as it once was, even in his own field. The increasing complexity of auto repair and maintenance is driving more and more business to dealerships. Then there’s the soaring cost of health insurance, which he has always offered to his workers, along with liability and workers’ compensation insurance. “I couldn’t do it today,” he says of the business he built.
The same is true on the domestic front. The Giovinos were 24 when they bought their house. Says Tony: “I look at where we were and where the kids are today and say, ‘What happened?’”
Ten years ago, Joanne talked to CommonWealth about how common it was becoming for children in their 20s to move back in with their parents. Today, that is the Giovino family story, as both Katelyn, 25, and Leslie Ann, 21, are living at home. Katelyn, who got a bachelor’s degree from Saint Anselm College in New Hampshire, is working as an assistant for a Bedford lawyer and hoping to start graduate school this fall, while Leslie Ann, who left college after two years, has an entry-level position at a bank.
The Giovinos say they are glad to help their daughters get on their feet—and understand why they have to, these days. “The price of grad school is tremendous,” says Joanne. Katelyn wants to study international relations at Tufts University, where the annual tab would be $28,000. Living rent-free at home, she is socking away money for tuition, an expense Tony and Joanne have told her will be her responsibility.
“The competition—it’s all global,” says Joanne of the job market her daughters are in today. “We never had to face that. We had to worry about the kids sitting next to you or in the next town over.”
Meanwhile, it’s hard to imagine when their daughters could become homeowners, as they were at Katelyn’s age. “How does the middle class afford $400,000 for a basic house?” asks Joanne. “There used to be such a thing called starter homes, which you don’t find anymore.”
THE PRITCHARDS: RETIREMENT MAY NOT LAST
For Chuck and Kathleen Pritchard, these were supposed to be the golden years. But they aren’t feeling quite as golden as expected.
The Pritchards arrived on Heritage Road in 1975 and raised five children there. They had the builder give them a fourth bedroom where other homes in Heritage Heights have a garage.
Chuck, 71, a native of Kansas City, worked for 30 years as a technical publications manager, first for Sanders Associates, a Nashua, NH, defense contractor, and then for Lockheed Martin after it acquired Sanders in 1986. Kathleen, 66, worked as a quality control manager for an electronics firm in next-door Bedford, but she stopped working full time when their last child arrived, in 1977.
Asked whether he felt life had worked out as he had hoped, Chuck has a two-part answer.
“Pre-retirement? Yeah. Post-retirement? Oooh,” he says, his voice trailing off. “The expenses have been terrible.”
that they may not be
able to afford retirement.
He singles out health care costs and property taxes as particular offenders. Chuck gets a pension for his years at Sanders, something he knows is becoming more and more rare. Health coverage to supplement Medicare comes with it, but he has to pay the same share of the premium as do current employees at the company. The cost has tripled since he retired in 1998. Meanwhile, the Pritchards’ property taxes have doubled in five years, to about $4,000 a year.
“I planned on them doubling in 10 years,” he says. “I did not plan on them doubling in five.” To top it off, other retirement savings they had accumulated took a big hit in the stock market downturn.
The couple say they are now seriously considering looking for part-time jobs. It’s “sad,” says Kathleen, when “in your retirement you have to say, you know what, we need to go to work again because it’s just not what we thought.”
The Pritchards may be disillusioned, but their fate is likely to become more common. Last year, a MassINC survey, A Generation in Transition, found that nearly two-thirds of Massachusetts baby boomers expected to work after retiring from their main career positions, at least 39 percent saying they will do so out of financial necessity. Nearly 70 percent of boomers reported being concerned about having access to affordable health care in retirement.
“We’re doing all right,” says Chuck. “But I kind of pictured [being more financially secure] than where I’m at right now.” There may be a bit of generational stoicism to the Pritchards’ stiff upper lip attitude. But they also have good reason to keep life’s challenges in perspective: Their oldest son, who lives in Lowell, recently had surgery to remove a brain tumor, though his prognosis is encouraging.
“That’s more important than anything in the world,” says Kathleen.
A BREWING BACKLASH?
If there’s anything CommonWealth’s visits to Heritage Road over the past 10 years has taught, it’s that there’s nothing average about being middle class. There are many ways to be above poverty but below luxury, and most of them involve a struggle that, if all goes well, comes with reward. The families of Heritage Road have their financial worries, for themselves or their children, but they all have two solid components of middle-class security: a home of their own, and a reliable source of income, whether from a job, pension, or smart retirement investments. That, experts say, is enough to keep most households on an even keel.
“If you own your home and still have a job in Massachusetts, you’re doing reasonably well,” says Barry Bluestone, director of the Center for Urban and Regional Policy at Northeastern University.
But those are big “ifs,” considering that Massachusetts was second in the nation in percentage of jobs lost over the four-year period 2001 to 2005. The Billerica area, with its concentration of technology-related firms, lies in the heart of one of the biggest job-loss belts in the state. The six-community area comprising Billerica, Andover, Bedford, Lowell, Reading, and Wilmington lost 11.2 percent of its jobs over this four-year period, more than double the statewide job loss of 4.7 percent during this time.
Even for those who dodged the job-loss bullet, these have hardly been great times for getting ahead. Real family income, adjusted for inflation, fell by 7 percent in Massachusetts between 1999 and 2004, says Andrew Sum, director of the Center for Labor Market Studies at Northeastern. The one household category that held its own—even recording a 1 percent increase in real income over the time—was married couples, he says, while income losses were smaller for those with higher levels of education. Thus, married couples and the well-educated “were the most well-protected from these declines,” says Sum.
But owning your home and holding your own in income are no protection from rising costs, and one of the costs that is the talk of Heritage Road, and many communities like it, is the property tax. Since 1980, Proposition 2½ has imposed limits on the total property-tax levy in a city or town based on property value (2.5 percent of total valuation) and rate of increase (no more than 2.5 percent per year). But as the value of residential property has soared in a red-hot housing market, more of the property tax burden has shifted from commercial property owners to homeowners, even within Prop. 2½’s restrictions.
“It costs me more for taxes now per month than it did my mortgage all that time ago,” says Tony Giovino, whose tax bill now tops $4,000 a year. “People who are on a fixed income—I don’t know how they’re going to be able to stay in their homes.”
It’s not only those on fixed incomes who are affected. Property tax increases have outpaced income growth in many Massachusetts communities. Last year, Bluestone co-authored a report that documented just how big that gap has become. The report divided communities into two categories, according to whether their median household incomes were above or below the statewide figure, then further divided those groups according to whether median household income increased or declined during the 1990s. For communities in the upper half of the income distribution with incomes that rose between 1989 and 1999—a category that includes Billerica—median household income grew by 6.5 percent, while the average property tax bill for a single family home grew by 66.6 percent, a rate 10 times that of income.
“I came away from this saying, I understand Barbara Anderson,” says Bluestone, referring to the longtime leader of Citizens for Limited Taxation. “I understand the property tax revolt. I understand why people are going nuts about local government.”
The property tax revolt that Anderson led a generation ago, which ushered in Prop. 2½, may be ready for a second act. In Billerica, there are signs of it.
“We’ve always had conservatives or libertarians fighting taxes,” says Gil Moreira, a former Billerica deputy town moderator. “For the first time in a long time, I’m hearing a majority upset about taxes. I think there’s a bit of a backlash coming.”
One target of the gathering storm over property taxes may be public-sector employees, whose paychecks are funded by those tax bills and who enjoy a smorgasbord of workplace benefits that are becoming increasingly rare in other sectors of the economy.
“We’re paying millions and millions of dollars for health care,” says Joanne Giovino, a longtime member of Billerica town meeting. A Massachusetts Taxpayers Foundation report last year cited health insurance for municipal employees as one of the fastest rising costs in local budgets, calling it “a mounting crisis.” But Giovino is particularly galled by a contractual provision that allows town employees to cash in up to 300 unused vacation and sick days when they leave the town payroll. She says the town recently had to pay out $75,000 to two retiring police officers and $230,000 to four teachers.
“I think it’s obscene,” says Tony Giovino. “I worked 60 hours a week. I don’t think the taxpayer is going to be able to continue to take this out of their pockets.”
When it comes to the benefits and protections of working in the public sector versus the private sector, “a generation ago, the divide wasn’t nearly as stark,” says Jacob Hacker, a Yale University political scientist and author of The Great Risk Shift, a book due out this fall examining the offloading of economic risk and responsibility from employers to individuals.
In Billerica, the widening of that gap seems to be stoking an already brewing backlash against soaring property tax bills, giving an added edge to the issue that Bluestone thinks may be at play in many communities. There is a “growing sense of alienation between private sector workers and public sector workers,” he says.
THE TIMMINSES: ‘CAN’T AFFORD’ HERITAGE ROAD
The divide between homeowning haves and have-nots also seems to be getting magnified for those in Billerica, as elsewhere in high-priced eastern Massachusetts. And while there has always been a divide between homeowners and those without property, the housing story is increasingly one with a prominent generational divide as well, as younger people even in well-paying professional jobs are finding it more and more difficult to join the ranks of Massachusetts homeowners.
One response to the state’s tough-to-crack housing market is to leave, something Bay Staters have been doing in large numbers. Massachusetts has the dubious distinction of being the only state in the country to suffer net population loss each of the last two years, according to Census Bureau estimates. Much of the loss of younger native-born residents has been to neighboring New England states, a pattern that includes two of the Pritchards’ five children: a son who has resettled in Maine and a daughter who now lives in southern New Hampshire.
John and Laura Peters say the house-price run-up meant all their friends who began house hunting a year or two after they did were driven to New Hampshire or places much farther out from Boston like Bellingham or Winchendon. “There’s nobody I know that really lives in the area,” says John.
“If it were just old folks leaving Massachusetts, we could say, ‘have fun in Florida, write home,’” says Bluestone. “But when it’s younger folks, we’re in trouble.”
Meanwhile, under the weight of everything from the soaring cost of higher education to the high cost of housing, stories like that of the Giovinos, whose two twentysomething daughters are both still at home, are becoming more and more common (see “The Young and the Penniless,” CW, Winter ’06).
Young people today “can do one or another—pay for housing or schools,” says Tony Giovino. “It’s hard to do both,” adds Joanne.
Boston University economist Laurence Kotlikoff, co-author of The Coming Generational Storm, sees very rough seas ahead for those now coming of age. “We have a real horror show going on,” he says, citing the growing federal deficit and the looming imbalance between workers paying into Social Security and Medicare and retirees drawing on those benefits. Like many economists, Kotlikoff is also concerned about a rise in income inequality that has accompanied two big trends in the US economy: huge growth in productivity and stagnant growth in wages for all but those at the high end of the earnings scale. To the time-honored question of whether today’s younger generation will do better than their parents, Kotlikoff’s answer is blunt and bleak.
“I think large numbers of them will not,” he says. “The middle class is in grave danger from all these changes.”
The Bay State’s loss of young families, which MassINC has documented in research (Mass.Migration) and in the pages of CommonWealth (“Moving In—or Moving On?” CW, Winter ’04), includes one of the families that former editor Dave Denison met in his visit to Heritage Road 10 years ago. Joe and Debra Timmins, who appeared with their young son and daughter on the cover of the debut issue of CommonWealth, had lived on Heritage Road for five years when Denison visited them in 1996.
Soon thereafter, the Timminses pulled up stakes and moved to the Amish country of Pennsylvania so that Debra could attend theological school. Five years ago, they came back to Massachusetts, happy to be near Joe’s mother in Watertown and Debra’s sister in Chelmsford. But after two years in Stoughton, living in the parsonage of the church where she served as pastor, Debra was ready to move on from that post. Ready to rejoin the ranks of homeowners, the Timminses realized they could do far better for themselves, and for young Ben and Kelsey, back in Pennsylvania.
“Housing prices had just increased so dramatically while we were away,” says Debra. “I can’t afford to live on Heritage Road.”
The median sales price of single-family homes in Billerica went from $148,000 in 1996, the year they left, to $250,000 in 2001, when they returned and landed in Stoughton. By 2003, the year the Timminses decided to head back to Pennsylvania for good, the median sale price in Billerica had soared to $311,500, and it hit $369,000 last year. Home prices now seem to be leveling off in Greater Boston, but at a very high level.
Today, the Timminses are settled in a four-bedroom colonial they bought in Chester County for $207,000. They miss the provincial patois of home. “We watch a lot of This Old House just to hear the people talk,” says Debra. And they love to come back to their home state.
“Massachusetts is still my vacation location,” she says. “We have the best of both worlds.”
But it’s hardly the best of worlds for Massachusetts, and for its future, if the best that can be said is that it’s a nice place to visit.