It seems the Bay State building bust may linger on for years to come, thanks to an unlikely mix of green zealots, NIMBY suburbanites and apathetic lawmakers.
The greensters, admirable motives aside, are proposing to heap thousands in new costs onto the construction of new homes, just as our local builders struggle to get back up off the floor.
For their part, some suburban xenophobes have a skewed vision of utopia, one free of “greedy” builders and the irksome, and expensive, schoolchildren their new developments bring. Their solution lies in a statewide referendum that could kill mandated affordable housing development in what is still one of the most expensive housing markets in the country.
And that apathetic Legislature? So far, they’ve proven unable to muster the will to extend local and state permits for developers whose plans were frozen in place when the global economy collapsed in 2008.
These issues of new stretch energy codes, anti-40B legislation and permit extension serve to encapsulate all the barriers the Bay State still faces if it seeks to build itself out of this recession.
Stretch Energy Stretches Wallets
After prodding from the Patrick administration and various true green believers, the Legislature last year gave cities and towns across the state the power to institute even stricter energy codes, so-called stretch energy codes, on top of state codes that are already some of the toughest and most progressive building codes in the country.
Not surprisingly, town and city officials across Massachusetts have leaped on the green bandwagon, with more than 40 cities and towns adopting new stretch codes.
But in the rush to be fashionably green, local officials are also driving up the cost of building in a state where a starter home can easily put you out $300,000.
The surcharge builders across the state will likely have to slap onto each new home to comply with these rules could come in at $10,000, according to Home Builders Association of Massachusetts estimates.
Developers of new commercial buildings are also vulnerable, with increased upfront construction costs.
“A lot of communities don’t think this is anything but a win-win,” said David Begelfer, chief executive of NAIOP Massachusetts. “They don’t realize they are adding some costs to projects now.”
State officials counter with a different set of costs – and a plea for more of a long-term mindset.
The tough new codes will add anywhere from roughly $4,500 to $6,500 onto the cost of a new home, depending on the size, but could save homeowners $1,500 a year in energy costs, officials contend.
“I would push back,” said Phil Giudice, commissioner of the Massachusetts Department of Energy Resources. “For folks who don’t want to change, there is never a good time.”
But any additional upfront cost is nothing to sneeze at in a state with some of the highest housing prices in the country. So, sorry, but the Patrick administration gets an A for math but an F for timing.
40Backlash
As if that weren’t enough, builders face another challenge in the mounting suburban backlash against the state’s 40-year-old affordable housing law. The Coalition to Repeal 40B wants to repeal the old law at the ballot box through a statewide referendum this fall.
Basically, the law gives housing developers the power to cut through local zoning obstructions in towns or communities with a dearth of affordable homes and rentals. In exchange, 20 percent of the units in the proposed project must be set aside as “affordable,” as determined by local income levels.
Critics of the law contend it has not produced enough truly affordable housing, while lining the pockets of developers with outsized profits. But this seems more like a line offered up for public consumption than anything else.
Frankly, it’s hard to figure out sometimes exactly what’s driving 40B opponents – too many irksome schoolchildren moving to town, renters getting a chance to live the suburban lifestyle or just hatred for the much-maligned “greedy developer.”
Sure, the law isn’t perfect, but criticism of it ignores the larger reality – that Greater Boston is one of the hardest places in the country to build anything, especially new housing.
Permitting Too Slow
Finally, our apathetic Legislature is also to blame.
Dozens of projects, from new office buildings to new condo communities, were put on hold across Greater Boston when the economy tanked in 2008.
Now, after fighting (for years, in some cases) to line up a multitude of state and local approvals, many developers face the prospect that these hard-won permits will soon expire.
NAIOP Massachusetts and the Home Builders Association of Massachusetts have lobbied hard at the Statehouse for a common sense solution – automatically extending these permits to give developers more time.
But after more than a year of debate, it’s an open question whether Beacon Hill will finally get its act together and pass an extension before the legislative session ends July 31. House leaders recently removed language from a sweeping economic development bill that would have extended in-place permits for two years. The Senate had previously passed the measure in its own economic development bill, and the question’s fate now rests in conference committee.
Dropping the ball on this could be catastrophic. Instead of putting shovels in the ground and building as the economy recovers, many builders would be forced to go through the whole, onerous permitting process all over again.
It’s hard to see the benefits of more delays – that is, unless you are a NIMBY and simply want to pull up the drawbridge and bar any more newcomers from town.
“We are way behind on the housing we need to keep the economy of this state moving ahead,” noted Judy Jenkins, past president of the Home Builders Association of Massachusetts and a builder herself. “Young people, they can get a decent job here, but they can’t afford to buy a decent house.”





