The seesaw battle over who should take responsibility for the housing crisis affecting Massachusetts took another turn last week, as the head of a leading commonwealth think tank told a gathering of builders that the solution to the problem rests squarely in the private sector.
That conclusion is the latest in a string statements about housing affordability that have included Gov. Paul Cellucci’s statement that the free market got the state into this situation and will get it out, as well as Boston Mayor Thomas M. Menino’s assertions that the federal and state governments need to take a more active role in housing.
Last week, the pendulum again swung away from the government.
The problem cannot be solved by the public sector, said MassINC Executive Director Tripp Jones. I believe there is a very important role for the government to play, but ultimately the issue of expanding the housing supply is something that has to be addressed by the proactive leadership in the nonprofit and private sector. Jones’ comments came at the Builders Association of Greater Boston’s January Forecast Dinner in Waltham Jan. 26.
Tripp called on industry leaders to begin working immediately toward alleviating the housing crisis that he said poses a danger to the overall economy.
We believe this is a major, if not central, threat to the vitality of Massachusetts, Jones said. Cutting the cost of doing business is paramount to a strong economy, but that’s only half the equation for economic success.
Jones cited several statistics that showed Massachusetts residents have high income levels and good jobs, but added that the cost of housing has taken away from the Bay State’s standing as an economic leader. Massachusetts residents have one of the highest per capita incomes in the nation, he said. Massachusetts has created and continues to create some of the best jobs in the country. We have a lot to be proud of. So what’s wrong with this picture?
He continued to say that the cost of living in the state has risen quicker than income levels, and in many ways, Massachusetts workers are running in place.
While the state ranks near the top in the nation in terms of earnings, when figures are adjusted for housing costs, Massachusetts falls from the fourth highest to the 22nd highest, Jones said. Massachusetts is not the leader, it’s a follower back in the middle of the pack, he said.
Eroding Workforce
The high cost of housing has driven many potential employees away from the state in search of more affordable shelter, which Tripp said is slowly chipping away at the strong economy. It’s affecting our ability to compete with other states, he said. Housing is the most serious threat to the economy. It’s becoming more difficult to attract people here.
Jones termed the migration of skilled labor an exodus, and said in recent years the size of the state’s work force has only grown by 1 percent, placing Massachusetts 47th out of the 50 states.
These are the people we need to rely on to fuel our growth and the future of the economy, Jones said. The bottom line is clear: unless there is a collective and sustained effort to help people find an affordable place to live, we’re in serious jeopardy.
To help solve the housing problem, Jones outlines several steps builders and other industry officials could take, including working with individual cities and towns on expediting the permitting process for new projects. Costs associated with delays in the permitting process are cited by real estate experts as one of the reasons that housing costs are so high.
We need to expedite the process, Jones said, though he acknowledged this conflicts with one of the most appealing aspects of living in Massachusetts, that each of the towns has its own democratic process.
I’ve talked to many developers to see what impedes development, he continued. We need to educate others, and make the process run more effectively.
Jones encouraged the builders to play an active role in educating politicians about the housing problem and what they can do to help, and encouraged them to contact local media outlets to give the issue more publicity.
To help clarify the issues facing the housing industry and what factors are limiting development in Massachusetts, the Northeast Builders Association is commissioning a two-part study on the matter. It will focus on the impact of regulation on the cost of housing, as well as new housing’s impact on town services compared to the revenue it brings to the town.
There’s a lot of misinformation out there about housing’s impact on a town, said Mark H. Leff, a senior vice president at Salem Five bank and member of the Growth is Good committee. He said resistance to building has led to a decline in building permits issued in the state, a trend opposite to what is happening nationwide. If the decline continues, the livelihoods of builders and those associated with the industry will be affected.
If we don’t do anything about this, that’s something that I just can’t live with, Leff said. What we were first concerned about four years ago is starting to come true.
