Quality firms and skilled labor are essential ingredients for housing construction. Massachusetts has added about 15,900 homes per year since 2020. For Massachusetts to accelerate this rate of production, we need to either grow the construction industry dramatically or increase its productivity, preferably both. Employment in the residential construction industry is up 11% from pre-pandemic levels, but it’s still not enough to achieve the levels of production we need to achieve housing abundance. To meet this plan’s production targets, Massachusetts will need to train a new generation of skilled labor and entrepreneurs prepared to build our future. Increases in worker productivity can also help achieve more homes with the workforce (and money) we have.
There are about 18,000 people working in residential construction firms today. This is not a historically high level. Employment in the residential construction industry peaked at nearly 20,000 workers prior to the foreclosure crisis and the great recession, then fell to just under 13,000 workers in 2012. The industry made slow gains through 2019 and has increased 10% since the pandemic [1]. That’s just a portion of overall construction employment in Massachusetts, which includes 18,000 workers in non-residential building construction and 121,000 in specialty trade contracting firms. This category encompasses a variety of specialty establishments such as plumbing or concrete. Many in the construction workforce are self-employed. According to the Home Builders Institute 24% of the construction labor force in Massachusetts was self-employed. Self-employed workers and sole proprietors will be especially important to smaller scale construction, such as ADUs, and the maintenance and remodeling of single-family homes.
As with the workforce overall, the construction workforce in Massachusetts is aging. Thirty percent of Massachusetts residential construction workers are 55+; the industry skews older as compared to the Massachusetts workforce overall or the residential construction industry nationwide, both of which are only 26% 55+. In the specialty trade contractor industry, only 23 percent of workers are 55 years old or older, similar to the nation overall. One challenge with homebuilding is that many of the occupations that are essential to the construction and maintenance of homes require extensive training and licensing. Thus, even if shortages result in increased incentives for workers to enter a trade, it will take time for workers to obtain the necessary training and certifications. For example, electricians need four years to complete the electrician apprenticeship process and become a journeyman electrician.
In recent years, much of the growth in the construction labor force has been due to foreign-born workers. Research has shown that historic increases in immigration enforcement had negative impacts on the housing supply, by reducing the size of the domestic and foreign-born construction workforce. Nationally, in 2022 nearly a quarter of the construction workforce was foreign-born and 31% of workers in construction trades were foreign-born. To the extent that immigration in Massachusetts declines, this could have a negative impact on the size of the workforce available to build, repair, and remodel new homes.
One means of growing the workforce is to attract members of groups who have been historically underrepresented in the construction industry, such as women. While 51 percent of all industry employment in Massachusetts is female, only 21 percent of workers in the residential construction industry and 15 percent of workers in the specialty trade contractor industry are female.
Compensation is an important aspect of attracting workers to the construction industry. Massachusetts workers in the residential construction industry earn higher wages than their peers in other states and are just above Massachusetts average wage across all industries ($96,000 vs $94,000 in 2024 dollars). Employees in non-residential building construction earn more than the statewide average. Thus, many jobs in construction provide the kind of solid, middle-income careers that have been disappearing in MA over the past 30 years. Within construction, however, there is a disparity between the high-skill union and prevailing wage positions and lower-skill, lower-wage, and less stable employment.
While wages are higher in Massachusetts, it is important to note that the Commonwealth has a higher cost of living than nearly all other states. A challenge for growing the residential construction workforce is that there is overlap in the skills necessary to construct commercial buildings and elements of public infrastructure, such as schools and bridges. If these sectors are adding new jobs at wages higher than residential construction, it will be harder to find enough skilled workers for home construction. Consequently, increases in the wages of those in residential construction will also increase the cost of new construction.
National BLS measures of single-family residential construction productivity show that productivity of the industry also declined with the great recession and has remained consistently below pre-great recession levels. In part this is driven by the nature of the residential construction industry where technological innovation has been limited compared to other industries. Increasing productivity in home building could include implementing measures to encourage the adoption of new technologies and production methods, such as modular or off-site construction. Through standardization and controlled conditions, offsite construction can dramatically reduce the time it takes to build home, increasing productivity of each worker. Massachusetts has historically been slow to embrace off-site construction, but there is potential for change. For example, in 2024, the Biden-Harris Administration and U.S. Department of Housing and Urban Development awarded the Metropolitan Area Planning Council a $3 million grant to explore innovative ways to build and install modular housing in the Greater Boston region.
Prior research has found that offsite construction can provide predictable, well-paying jobs for people who wouldn’t otherwise be involved in the housing construction industry, particularly women and people of color. Offsite manufacturers can also be a positive workplace for formerly incarcerated workers or workers in recovery due to its predictable hours and work.x Onsite construction often has long periods with little work, followed by periods of intense work, which are difficult for many workers to accommodate, like working parents. Offsite construction has much more regular hours, with the added benefit that the work largely takes place at one facility rather than at construction sites that may be far away, reducing transit time. Manufacturing facilities are temperature-controlled and protected from inclement weather, making offsite construction friendlier to people who cannot work under difficult conditions due to age or disability.xi There are numerous examples of unionized housing manufacturing facilities.