What Will be Happening in Boston in 2016?

Barring a major downturn in the economy, construction in Boston will continue to be very strong. Examples… 

• - The Huge Millenium Tower ...Will open this summer. Tallest residential building north of New York City – 60 stories, 685 feet high – on the site of the old Filenes. Many units are already sold. 1-bedrooms started at $1.6 million.
  Cheapest units now available: $3.3 million. Total sales by last fall were already at $1.5 billion…There will also be a hotel, and commercial businesses located on
  lower floors. LATEST NEWS: Someone is purchasing the full-floor penthouse on the 60th floor – supposedly a local family. Asking price was $37.5 million.
  
• - Boston Redevelopment Authority took control of the Winthrop Square Garage in December. The garage had been condemned in 2013, and sits on one of the most visible plots in the financial district. Some recent legal glitches will be overcome. Proposals are in the works for a building as tall as 780 feet. That would make it several stories taller than the Prudential tower.
  
• - Mayor Marty Walsh: In the second year of the Walsh administration 1,022 new affordable rate housing units came on line – the most in Boston’s history. But finding an affordable unit in Boston is still difficult. Walsh is working with large developers, colleges and universities to increase funding for constructing affordable units. His goal: 53,000 units by 2030 – including new dorm rooms.
  
• - Seaport District….According to the Boston Globe: 12 vacant acres there were purchased for $359 million late last year. Two smaller parcels were sold to Chinese investors for $100 million.
  
• - The NorthPoint area near Lechmere will benefit from spillover from Kendall Square, where commercial rents are the 10th highest in the country MIT is working on a proposed major redevelopment project adjacent to its campus.
  
• - John Hancock will build a new 26 story tower along Stuart Street in the Back Bay. Construction starts this year.
  
• - Along Washington Street at Downtown Crossing, a developer is proposing a 30 story building on a lot that is 1/10 of an acre. It would have a frontage of 38 feet.
  
• - Harvard is starting up its long-delayed development in Allston-Brighton. Will include new graduate housing, and science buildings. According to Harvard Magazine: “The long-range goal of redeveloping the vast acreage further east (beneath and beyond elevated roadways, a former rail yard, and other less visible properties), once thought far off in the future, now appears a realistic prospect.”
  
• - Amazon has purchased land in Fall River for a new 1 million-square-foot fulfillment center that will employ 500 people. Construction starts this year.
  
• - Boston rents are up nearly 6% over the last year – about three times the rate of inflation. Average Boston rent is now above $2,000. Boston has become the 4th
  most expensive rental area in the country – trailing only San Francisco, New York City and Silicon Valley.

For more plumbing and construction industry news, see my February 2016 update.

Plumbing Contractors Can Now Say, "Show Me the Money"

If you put in a day’s work, you expect to get a day’s pay — and you expect to get paid promptly, right?

Those expectations are at the core of our free enterprise system. For decades however, plumbing contractors have been putting in a day’s work, but not getting paid in full until many weeks — or more typically, many months — later. Thanks to a recent Massachusetts law, that’s no longer the case.

Associated general contractors had been using a long-held practice known as “retainage” to routinely withhold payment to subcontractors such as plumbers. Incorporated into most contracts, GCs would customarily hold back 10 percent of a subcontractor’s pay until they determined that the work was completed to their satisfaction. Although construction projects would, in fact, be successfully completed, GCs wouldn’t release the funds until much later.

The Mass. retainage law, however, changes the dynamics by specifying a payment schedule as well as the amount that can be withheld. Read more in The Pipeline, the industry newsletter jointly produced by the GBPCA and Plumbers Boston Local 12.

For Joe Cannistraro, Education Is the Key

We may be in the midst of winnowing candidates to nominate for president of the United States, but the presidency of the Greater Boston Plumbing Contractors Association was decided last spring. Members voted Joseph C. Cannistraro, the CFO of J.C. Cannistraro in Watertown, to head the organization’s executive board.

Cannistraro brings years of experience to the leadership role. He also brings an abiding interest in education and learning to the position.

He plans to leverage the resources of the GBPCA and encourage other member contractors to take advantage of the organization’s educational opportunities. Through its affiliation with the Mechanical Contractors Association of America and the Plumbing Contractors of America, the GBPCA offers training and best practice models in areas such as project management. Cannistraro is hopeful that by pursuing education and working together, GBPCA members can help themselves, help one another, and make the organization stronger.

Read more about Cannistraro in a profile published in The Pipeline, the industry newsletter jointly produced by the GBPCA and Plumbers Boston Local 12.

Affordable Housing on the Rise

About half of the apartments, homes, and condos permitted through June 2015 in Boston -- about 1,200 units -- are either low-income housing or market-rate properties to be priced for middle-income wage earners. According to the Boston Globe, Mayor Martin J. Walsh considers the surge in affordable housing to be a welcome trend.

The uptick in new construction is helping to create a more diverse housing mix, but there is still great demand for affordable housing. Walsh and others are urging developers to move forward with projects. The city's Inspectional Services Department has streamlined the building permit process and reduced the amount of time it takes to issue approvals.

Walsh has established a goal of adding 53,000 new units to the city's housing stock by 2030. In the midst of Boston's red-hot real estate market, that goal would be easily met.

The Mechanical Trades: An Update

A couple of major trends are taking place in the mechanical trades in Boston, and they are important to understand. 

The first involves innovation. Thirty years ago on a large-scale commercial plumbing job you would hear the plumbers say: “Plumbing is plumbing.” There was a sense that the trade would continue to be what it had been, more or less, since the days of the Romans when the Latin plumbum, the word for lead – gave the trade its name.

In the many hundreds of years since the Romans the trade had indeed introduced a few innovations. By the twentieth century we were no longer using lead pipes to transport water. Cast iron drainage piping became common, and by the late years of the century various forms of plastic, including PVC and PEX, had been introduced. 

Yet the trade remained essentially the same. Plumbers went out to jobs, cut holes in studs, and soldered, clamped or glued systems together. 

It was the digital revolution that caused things to change in a dramatic way. You see the innovations particularly on commercial jobs where buildings are now being fully designed back at the shop where pipe is then being cut and fabricated. Whole batteries of fixtures are now being put together under controlled conditions, before being lifted by cranes and popped in place. 

Perhaps even more striking are job site innovations such as the use of the Trimble system, which allows the folks back at the office to determine the precise location of hangers and cores. Data is sent wirelessly out to the job, downloaded into the Trimble, and locations for those hangers and holes are identified and marked in a matter of minutes. It is a very far cry from the days when we used plumb bobs and chalk lines on the floor to fix our locations. If you had a told a plumber three decades ago that this would be the way apprentices and journeymen in the 21st century would be doing layout, they would have looked back at you with a very puzzled expression. 

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The second major trend in the mechanical trades – and, to a larger extent the building trades in general – is the growing shortage of skilled workers. Decades of an educational system that placed an emphasis on ‘going to college’ had given the trades a bad rap. Few students leaving high school had been told that among their options is joining a union apprentice program, where if you worked hard after five years you could be earning a six-figure income. Instead of being tens of thousands of dollars in debt from obtaining a college degree, a skilled craftsperson today has opportunities that often exceed those with BA’s. 

This is not to say that college is not useful. Indeed, we are finding that more and more of those who are joining the trades arrive with some advanced education. For instance, in recent years during the Local #12 application process there has been at least one law school graduate. Even at the high school level, we are seeing a renewed appreciation for the importance of our vocational schools. 

What is becoming apparent is that the coming retirement of baby-boomers is opening up a whole set of employment opportunities for those willing to take on the challenges of learning a mechanical trade in the 21st century. Increasingly, there are shortages in various parts of the country of skilled plumbers and electricians. 

In the years to come, the mechanical trades will take on a whole new look. And we’ll be looking for smart, hard-working young people who are ready to take on the challenges and opportunities that the building trades can offer.

There is a Willie Nelson song: “Mamas Don’t Let Your Children Grow up to Be Cowboys.” For years, the American educational system sang a similar tune: Mama, don’t let your children grow up to be plumbers (or electricians, or carpenters, etc.) 

That tune is changing.

Scarce Housing, Boston's Olympic Bid, and other Industry News

I posted the most recent industry news, including:

• New GBPCA officers
• Rental units not keeping pace with demand in Boston
• Are the Olympics coming to Boston?
• Uber and subcontractors

There is plenty more info. Read my June/July 2015 news update.

UPDATE: Housing Market, 2014

Last week the BOSTON GLOBE ran an informative article about the future of the local housing market.  Will the rapid rise in sales and prices continue into 2014?  Probably....even though interest rates are rising and the supply of homes is lower than it has been in a long time.  And let's not forget the impact of the stock market.  When the market is rising, people feel richer, and are more apt to pay more for a home.