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Government & Regulations • EDITORIAL / OPINION

Editorial: Beware of unintended policy consequences

Boston Business Journal | January 25, 2023

unintended policy consequences
The trend toward creating more bike lanes to promote climate-friendly cities has had the unintended consequence of taking away parking spaces from retailers — a sector in which Black and Brown people are disproportionately represented. (via The Boston Business Journal)

This week, we’ve asked some of the region’s most prominent business leaders — in fields of real estate, technology, health care and retail, among others — to provide a glimpse into the economic future. One recurring theme in their answers has been dealing with the unintended consequences of actions that sound good on the surface, but end up undermining other efforts.

Jon Hurst, for instance, cites the recent implementation of bus and bike lanes statewide and the effect this has had on parking spaces. The president of the Retailers Association of Massachusetts points out that the well-intentioned effort is hurting many of the same small-business owners already suffering from pandemic-related impacts. In effect, a change intended to improve public health and address climate change also has a downside that hurts businesses that are disproportionately owned by Black and Brown residents.

Another example is cited by Tamara Small, CEO of NAIOP Massachusetts, who is worried about cities and towns putting burdens on developers that could slow down new construction. “In cities like Boston where 74% of the city’s budget comes from property tax revenue, policymakers should take note,” she writes. “Even a slight dip in that revenue could have dire consequences for city services.” Again, we see a laudable goal (an attempt to create more affordable housing through higher fees, for instance) that can end up hurting the very residents the city is trying to help.

Yet one more example is the so-called “millionaires tax” that kicked in this year, the 4% income surtax intended to fund transportation and education. Christopher R. Anderson, president of the Massachusetts High Technology Council, points out that as one of a handful of states that actually raised taxes this year, Massachusetts may unintentionally speed up the “redomiciling of senior executives” to other states, which he says is already at “a record pace.” The net effect, of course, could be less tax revenue than intended and a talent outflow at a time when companies already are struggling to compete.

There are a slew of similar examples. And in every case, the intention is worthy — whether it’s addressing climate change or equity. But policymakers must keep their eyes open and be realistic about the effects — both positive and negative — of the changes they implement. They must also be prepared to formulate a plan to address the unintended consequences of those actions. That’s why politicians seeking input from the business community is critically important — not just for the sake of the businesses, but for the sake of the success of the policies themselves. The relatively new administrations in both Boston and Massachusetts need the insights of business leaders as much or more than businesses need them, if only to help foresee the ramifications of the policies they are proposing.