closing thoughts: an interview with Guy Webb of the Builders Association of Central Massachusetts
Guy Webb is executive director the Builders Association of Central Massachusetts. It's an organization whose acronym, BACM, ("back 'em), seems particularly apt right now, due to the intense focus on construction costs as a factor in the state's costly housing market. The non-profit BACM advocates for the state's single-family homebuilders. Here, Webb comments on the issues affecting the state's homebuilding industry.
WBJ: What do you think of the Inspector General's recent report that alleges abuse of the 40B affordable housing program by underreporting profits? Is there real abuse, or is the state being too heavy-handed?
Webb: It appears that the IG has made the assumption that all accounting inaccuracies in 40B projects are efforts to hide excessive profits. The vast majority of 40B builders have developed their projects both within the spirit and the letter of the law. In some of the few cases where a developer of a 40B project has either exceeded the maximum profit allowed or in some way gone astray of the regulations, the developer has done so unintentionally. Many projects make much less than the 20 percent maximum profit. The problem with 40B is not willful abuse by developers, it's that the regulations and the oversight process need to be revised and improved. With that done, problems, intentional or not, can be eliminated.
WBJ: Do you think the 40R Smart Growth concept is beginning to work in Massachusetts?
Webb: I think many of the future 40R projects will often be the redevelopment of older, often vacant, commercial and industrial properties. We need to create housing of all types, across all income levels. And 40R, although a very useful tool, will be somewhat limited in that.
WBJ: Do you think 40S will work in terms of encouraging towns to be more open to new families moving in?
Webb: I think the incentives within both 40R and 40S will help create some housing units, both market rate and affordable, but some towns are just resistant to housing and no amount of incentives are going to change that.
WBJ: Do you foresee a mass shift from single-family homes to condos as baby boomers downsize?
Webb: I think that's already happening to some degree. I don't envision it as a mass shift, though. Condos just don't appeal to every empty-nester. Another trend of aging in place is the single family home with the master bedroom on the first floor, and other design features that allow aging boomers to stay in their homes longer. Most markets easily absorb homes vacated by downsizing.
WBJ: Many communities are building 55 and over housing, to attract people without children. Do you think too many of these projects are being built?
Webb: I can't say that there are too many being built because they are still selling well. There's a great temptation to develop such projects because towns that are otherwise resistant to new homes will welcome, or at least tolerate, a 55 and over development because there are no children. That temptation could very well lead to an abundance in the market of that particular kind of housing. Builders are smart people. They'll adjust to the market before things get out of control.
WBJ: Are 55 and over buyers selling their homes to the very families the towns were hoping to discourage?
Webb: Sure, sometimes, but I don't think towns concern themselves about that. The amount of children coming into a town through these transactions are partially offset by other households that become empty nests, and besides, they can't dictate who buys your home anyway. By the way, isn't it a shame that children have become a four letter word for so many communities?
WBJ: What do you think can be done to bring down the price of housing in light of rising construction costs?
Webb: It's not the construction costs as much as it is land costs and development costs. The solution is to create more housing. It's a simple formula of supply and demand. Towns have systematically choked off the supply of buildable land over the years through zoning and local regulations. An individual house lot in Massachusetts costs more than the median price of a home in many other states. A homebuilder pays million for a parcel of developable land and then has to go through 3 to 4 years of expensive approval hurdles before he can stick a shovel in the ground. The cost per individual lot is driven up each day.
There is no silver bullet to solve the housing crisis in Massachusetts. Tools like 40B, 40R and 40S help but the state needs to do much more. The housing crisis was created by numerous causes over a long period of time. Unfortunately it won't be undone easily or quickly, but I do think things are headed in the right direction for the first time in many years.
This interview was conducted via e-mail and edited for length by Editor Christina P. O'Neill.
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