Dive Brief:

• In an effort to combat the escalating price of housing, Boston’s construction trade unions have agreed to lower their wage rates on specific projects, possibly reducing the rent on new apartments by hundreds of dollars per month, according to The Boston Globe.
• The unions will assemble apartment construction teams whose members will be paid approximately one-third less than their normal wage in return for the owner agreeing to a 100%-union-staffed project.
• Boston’s housing market presents obstacles on several fronts, The Globe reported, including high-priced land, complicated permitting procedures and steep wages, which can drive the cost of developing apartments as high as $400,000 for a typical 1,000 square foot apartment. 

Dive Insight:

If the union plan is successful, it will aid in Mayor Martin J. Walsh’s attempts to increase affordable housing units in the city by 53,000 over the next 15 years. In fact, Walsh was head of the trade unions in Boston before becoming mayor and has invested years in trying to get them to agree to lower wage rates for this initiative.

Brian Doherty, head of the Metropolitan Building Trades Council, told The Globe that the lower-rate "package" will, in all likelihood, be used for middle-and lower-income projects in Boston but eventually will be offered in surrounding neighborhoods. For now, Doherty said the unions are looking for test projects for the new initiative.

Some critics, however, have said that the lower wages might not be enough to significantly impact rental rates. The Globe also noted that this move could be a way to put union labor on projects that might have hired cheaper nonunion workers.

Many large cities across the U.S. are struggling to provide enough affordable housing for their residents. In a new report, Beacon Economics found that California lost a net 625,000 residents between 2007 and 2014, mostly attributable to the high cost of housing.

And Walsh isn’t the only mayor exploring ways to increase access to affordable housing. The mayor of Los Angeles, Eric Garcetti, has declared his goal of adding 100,000 affordable units to the city’s supply and is considering charging developer fees to finance their construction.