The cost of housing is sky high again, and suddenly, union construction workers are getting fingered as major culprits.
To their credit, some local labor leaders are now signaling a new willingness to bargain on wages in order to get new housing developments off the ground and grab more work for their members in the traditionally open-shop suburbs.
But for anyone who truly thinks that high-living union hardhats are the main reason that it costs more now to live in Massachusetts than almost anywhere else, I have a simple question: Where in the heck have you been for the past two decades?
Like a slow-moving train wreck, our latest housing affordability crisis has been building since the 1990s. Towns and suburbs have become allergic to middle-class housing. Meanwhile, an onerous Boston development bureaucracy can take years to review major projects.
Sure, some flexibility on wages could provide a boost to some projects. But it is not a silver bullet that is going to bring down the crushingly high cost of keeping a roof over your head in Massachusetts.
“In these days, where there is a growing income inequality in this country, the danger is that we always try to squeeze every penny out of the working person,” said Hugh Kelleher, executive director of the Plumbing, Heating, Cooling Contractors of Greater Boston.
Yet if anyone can get the unions to ante up, it’s one of Kelleher’s long-time friends, Boston Mayor Marty Walsh. A former top trade union leader himself, Walsh has pledged to put everything on the table in the bid to get more middle class housing built, including union wages.
And to be sure, those wages are substantial, with the hourly wage for a union plumber in the $49 range compared, or about $100,000 a year, provided there is full-time work throughout the year, never a guarantee in construction.
Lots Of Ideas, No Solutions
A number of ideas are being floated right now by City Hall, including the idea of a lower union wage rate for housing projects in Boston’s traditionally middle- and working-class neighborhoods, beyond the increasingly gilded downtown enclaves like Back Bay or the South End. In fact, it’s an idea the New England Regional Council of Carpenters has used to compete outside the region’s metro areas, with a wage rage that is 15 percent lower. The Boston-based plumbers’ union is now looking at a similar arrangement in a bid to grab more suburban work.
Yet by all accounts, Walsh’s push to get a two-tiered wage system on new housing projects in Boston faces an uphill battle, and is already encountering pushback from unions worried about making big concession on what has long been home turf.
For the sake of argument, though, let’s just say Walsh can successfully negotiate a deal, one that lowers union wages by 20 percent for middle-class new apartment or condo developments in Boston neighborhoods. Problem solved, right?
Not quite. At best, that would lower the cost of the project itself by a few percentage points, not 20 percent. Why? Because labor costs, as important as they are, are just a quarter of any project, with the other 75 percent made up of steel and concrete, wires and pipes, said James Kirby, president of Boston-based Commercial Construction Consulting, who estimates project costs for as living. “That is a meaningful number,” Kirby said.
But he went on to say that other reductions, particularly in land costs and mitigation payments hoisted upon developers, are also crucial. And there is always the issue of the general contractor simply using those savings to pad his own profits, warns Kelleher, head of the local plumbing contractors group.
Getting At The Real Problem
The increasingly ludicrous high cost of housing in Eastern Massachusetts and across the state is not a labor problem. Rather, it is an issue of suffocating red tape and overregulation of new housing development at the town, suburban and city level.
For starters, those relatively high union wages are only relevant inside the city limits of Boston and in a few other urban pockets. The vast majority of construction workers across the state work for nonunion shops, taking home lower wages.
On top of that, while $49 an hour for a union plumber may sound like a lot, just take a look at what has happened to housing prices. You need to be pulling down $96,000 a year – just about that rate – to afford the average rent in Boston, which is up to $2,400 per month, according to a report just released by activist group Homes for All.
The problem is not what we pay construction workers, but the fact that Massachusetts lags the rest of the nation and the country, year in and year out, when it comes to the amount of housing that gets built.
In fact, the last time the Bay State was anywhere near the national average was way back in the 1980s, Census stats and a report by the Home Builders and Remodelers Association of Massachusetts show. And our housing production woes are a result of a straightjacket of hyper regulation on the city and town level, combined with a rise in NIMBY attitudes towards new development.
Even as housing prices soar, the main concern of many suburbs and towns across the state is not where struggling middle- and working-class families will live, but how much school costs will go up. The end result is zoning that leaves only a few sites left for new sizable housing developments, driving up the price of the few lots that can be built on.
By contrast, Boston has talked the good talk about the need to spur construction of new condos and apartments that are affordable to a broad range of city residents. But many of the same forces that make housing so difficult and costly to build in the suburbs are at work in the Hub as well.
The city’s long and laborious permitting process unwittingly works against any developer interested in building something other than multimillion-dollar condos or $4,000 a month apartments. The Boston Redevelopment Authority’s review process can drag on for months, and, in cases where the neighborhood NIMBY-ers throw a fit, even years. Unless you are lucky enough to have bought a parking lot, that can carrying the cost of a multimillion-dollar site deal for years before anything gets built, let alone produces income.
On top of that is “mitigation” – hundreds of thousands, if not millions, of dollars in costs developers are forced to cough up to placate neighborhood critics. It can range from subsidizing the local daycare center to putting in a new traffic light.
Our state’s housing woes and chronic unaffordability are complex and maybe even intractable problems. And going after the paychecks of union construction workers is not going to solve it.
Email: sbvanvoorhis@hotmail.com



