Affordable Housing Versus Better Wages

Massachusetts wants to require affordable housing developers to pay construction workers a "prevailing wage", but with costs already totaling $200,000 or more per unit, the proposal may ultimately decrease the amount of affordable housing built.

"Because wages set under prevailing wage provisions are substantially higher than non-union rates, the Senate proposal would dramatically increase the cost of affordable housing. A 2007 study by the Massachusetts Housing Partnership found that projects in cities that impose this requirement are 34-to-40 percent more costly than projects not subject to the wage rule. This means that if the bill becomes law, the state will either have to raise taxes, cut spending in other areas, or build less housing.

Noting the former outcome is unlikely and the latter two are unappealing, housing advocates generally oppose the prevailing wage provision. Union advocates, on the other hand, argue that is unfair to pit the needs of workers against the need for affordable housing.

Lost in this debate is the fact that such housing in Massachusetts already is expensive. This is not a new finding. A decade ago, Denise DiPasquale and Jean Cummings of the Housing Economics consulting firm found that the costs for affordable housing projects in Boston were more than $100,000 per unit, greater than those in any metropolitan area except Los Angeles and Philadelphia."

Full Story: The high cost of affordable housing


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