Housing Secretary Ed Augustus is pictured speaking at a Sept. 12, 2023 Local Government Advisory Commission meeting. Photo by Chris Lisinski | State House News Service
State government leaders in Massachusetts are trying to instigate a building boom to address a housing shortage marked by high rents and sale prices, but a top housing official is now warning that headwinds from Washington could threaten their efforts.
“The equity that’s often needed to facilitate a deal doesn’t like uncertainty, and we are in the midst of lots of uncertainty,” Housing and Livable Communities Secretary Ed Augustus said in Lee on Wednesday during a policy talk with local experts hosted by the Berkshire Edge.
He added, “If you come in and want to fund a project, and you look at what the [financial estimate] says, but you’re going to actually go in the ground 18 months from now, how could you guarantee that those are the prices that you’re going to have, given this uncertainty?”
It’s an argument Augustus also made earlier in the week, testifying before lawmakers in Gloucester on Monday about Gov. Maura Healey’s fiscal year 2026 budget proposal.
“What developers tell me is equity, which they are usually pursuing in order to get the financing to build a unit, equity doesn’t like uncertainty. And the idea that this project may cost 10 or 15 or 20 percent more than they’re projecting, it doesn’t often attract that investment,” Augustus said on Monday.
Big State Effort, Little Gain Feared
The administration has long pointed to a goal of increasing the statewide supply of year-round housing by 222,000 units over the next decade — a 7 percent increase in supply.
As production slowed over the past few decades, the share of homes available for sale or rent in Massachusetts has shrunk to 1.6 percent, and costs have skyrocketed.
Programs focused on keeping low-income residents housed are struggling to keep up with housing inflation. The Massachusetts Rental Voucher Program has seen large increases in spending, without making a significant bump in the 160,000-person waitlist of people who need help paying rent.
“We’re putting significant additional dollars into the voucher program, but not necessarily getting more vouchers. We’re just having to pay higher rents for the vouchers that have already been leased so that we don’t lose any of those units and have people fall into homelessness. So again, some of it is just, you’re paying a lot more, but you’re not necessarily getting more. You’re trying to keep what you’ve got,” Augustus said Wednesday.
The governor and Legislature passed a law last year that authorizes $5.16 billion in long-term bonding, mostly focused on production of new units. State officials are trying to put some of that money, and new production-oriented policies, to work in a state where building remains mostly under the oversight of local zoning rules.
The state housing secretariat estimates that the law will lead to the creation of over 45,000 new units and the preservation of 27,000.
The law was signed in August, three months before the election, and Healey and Augustus have both warned recently that policies coming down from President Donald Trump could threaten the planned production boom.
Lumber Tariffs of Particular Concern
In addition to seeing a pullback of investors, the housing secretary warned Wednesday about Trump’s tariffs on lumber making it more expensive to build housing.
“When you get most of your lumber from Canada, and that’s subject to a 25 percent tariff, that is driving up the costs,” he said.
Trump’s promised tariffs on Canadian lumber are scheduled to start on April 2. The 25 percent tariff on softwood lumber used in most home building would be on top of the existing 14.5 percent lumber tariffs previously imposed by the U.S. Department of Commerce, according to the National Association of Home Builders.
At a National League of Cities Conference, Vice President JD Vance spoke Monday about the national housing crisis, calling it “not acceptable or sustainable” that the average income it takes to buy a new house is nearly two times the average salary of a typical American family before going on to lay much of the blame for the situation on immigrants – a claim most housing experts reject as insignificant compared to the under-building of housing that’s gone on in America in recent decades..
