If Massachusetts politicians want to take truly meaningful steps towards making the state more attractive and more livable, they should start beating feet towards efforts to expand pipelines into the building trades.
Anywhere you look – the news, economic data, friends and family – the crushing burden of the state’s multiple housing crises stares you in the face. And while what seems like an emerging consensus on Beacon Hill will deliver not-insubstantial help to families with children and other caregiver responsibilities, $600 per dependent per year won’t do a thing to cushion the $2,864-per-month average rent on a two-bedroom apartment in Boston or ultra-long waiting lists for affordable housing.
As we’ve explained in this space numerous times before, the region’s astronomical rents trace back to one place: NIMBY homeowner greed and myopia that seeks every means necessary to curb multifamily construction. These neighborhood defenders’ “housing for me and not for thee” attitude has kept the number of apartments in Massachusetts’ metro areas artificially low.
In turn, this has given landlords incredible market power to set rents as they please, or forced them to keep rents high as they try to pay off the mortgage on a rental property whose value was pushed up by the amount of income it can generate.
The way out, as we’ve also explained many times before, is more housing construction. The MBTA Communities reforms will help in this regard, and more zoning reforms like statewide legalization of multiple ADUs per single-family home are necessary, as well.
But boosting the number of construction workers and construction firms will be key if we want to keep building housing in this new era of higher interest rates.
All else being equal, a new apartment’s rent is largely governed by three things: the cost of land, the cost of construction and the cost of financing. By forcing large amounts of land to be zoned for development and allow a parcel’s cost to be spread over a larger share of units, Beacon Hill can reduce demand for each individual development site and help keep the first factor in check.
The cost of financing is largely out of the state’s hands, although it can make modest contributions by generating more money for programs like MassDevelopment.
The cost of construction, though, is largely driven by the cost of the labor that goes into erecting a building. Like apartments, that’s in terribly short supply, with similar impacts on building costs.
JLL estimates that around 25 percent of the Greater Boston construction workforce is at risk of retiring soon, with far too few Millennial and Generation Z workers coming in to replace them so far.
Massachusetts can’t afford a 25 percent cut in its ability to build homes when we’re so deep in the hole that even the current pace of construction, by JLL’s estimates, has created between seven- and nine-month backlogs of work for Greater Boston’s subcontractors.
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