Greg Beeman
A recent Boston University study revealed an alarming increase in the number of residents fleeing Massachusetts and found that housing costs were one of the three main drivers of outmigration. Earlier this year, the Greater Boston Chamber of Commerce conducted a survey of more than 800 area residents aged 20 to 30. Over 25 percent said they are thinking of leaving the area within five years – with the lack of affordable housing being their top issue.
Few would disagree that building more units is the key to solving the housing crunch, and one way to achieve that goal is for lawmakers to incentivize housing development rather than making it more burdensome and expensive.
The cost of constructing a typical starter home in the commonwealth is already second highest in the nation, 22 percent above the national average. Yet lawmakers continue to encourage the use of project labor agreements. PLA’s require that all trade labor on a construction project come from construction unions, which dramatically reduces competition because they prevent the 81.8 percent of Massachusetts construction workers who choose not to affiliate with a union.
A 2021 RAND report on the effects of PLAs on affordable housing production in Los Angeles illustrates their impact. The study found a 14.5 percent increase in construction costs and an 8 percent increase in overall per-unit costs for projects subject to the PLA. RAND also found that in the absence of the PLA, approximately 800 additional units of housing could have been produced with the same funding, an increase of approximately 11 percent.
State officials estimate that Massachusetts needs at least 200,000 new housing units by 2030. But by the end of 2022, the region had built barely half the units needed to keep pace with the goal of 185,000 new units by 2030 set by the 15 communities in Greater Boston’s Metropolitan Mayors Coalition. Part of the reason is sharply higher production costs.
It’s not just PLAs that are an obstacle to building the housing we need to grow the economy and keep young people in Massachusetts. It appears that state legislators will return before the end of the year to try and complete work on several bills they failed to act on by the July 31 close of the legislative session.
MBE Firms Penalized
One such piece of legislation is an important climate bill that highlights the type of barriers that make it so costly and burdensome to build in Massachusetts. The bill contains vague, broad language would erect additional barriers, especially for small contractors that don’t have the resources to deal with more bureaucratic processes.
One section of the bill would require a 10-year safety violation look-back that would exclude many reputable, respected contractors that have received minor OSHA citations. The language does not consider ongoing appeals processes that can result in OSHA violations being dismissed.
Another section would require the length of all registered apprenticeship programs to be five years, which exceeds the commonwealth’s licensing and apprenticeship requirements. Such an extended apprenticeship requirement is unnecessary and would be a barrier to entry for newer contractors.
Most owners and developers, as well as the non-union contractors that make up the vast majority of the Massachusetts construction marketplace, are not signatory to agreements with labor organizations and have no control over when those organizations may choose to picket or boycott a project. Yet the climate legislation would hold those entities responsible for actions of labor organizations acting in their own self interest.
National estimates indicate that the overwhelming majority of Black- and Hispanic-owned construction firms are nonunion, and this provision would be particularly hard on those contractors, for whom the commonwealth is trying to make the public construction market more accessible.
The commonwealth’s highly skilled workforce has long been the cornerstone of our economic competitiveness. Solving the housing crisis is the key to keeping young, educated residents in Massachusetts, and doing that requires stripping away policies that needlessly add to the costs and burdens of housing construction.
Greg Beeman is the president and CEO of Associated Builders and Contractors of Massachusetts.
