Panelists: rising materials, labor and regulatory costs — plus financing limits — are slowing housing production in Northampton

A panel at a forum hosted by the Northampton Housing Partnership and the City Council committee on community resources said high construction prices, layered regulations and a constrained state funding process are driving up per‑unit costs and slowing housing production across Western Massachusetts.

Carolyn Meesch, director of the Northampton Office of Planning and Sustainability, opened the session and introduced three presenters who described how financing, regulatory standards and market forces combine to raise development costs and timelines.

Panelists explained why the costs matter and where the money goes. “We only do affordable housing. We do not do market rate housing,” said Alexis Breitenacker, executive director of Valley Community Development, describing the multiple funding sources she layers into projects. “We borrow money that has interest rates. We use state money. And then we use federal and state low income housing tax credits.”

Nut graf: The discussion detailed specific drivers — acquisition, construction, professional and legal “soft” costs, state reserve requirements and lengthy funding cycles — and why those drivers make projects harder to finance in Northampton and the region.

Alexis Breitenacker, Valley Community Development Breitenacker said municipalities often provide only a small portion of total project costs. She cited her group’s gut rehabilitation of a former nursing home on Bridge Road as an example: she described the project as a roughly $30,000,000 development that received about $1,000,000 from the city while the team paid roughly $2,300,000 to acquire the property from a prior purchaser. “That is a thirtieth of the cost,” she said of the city contribution.

She walked through typical cost categories: land acquisition, construction and construction loans, capitalized reserves the state requires (she gave an example of $250,000 set aside for a project next to Amherst College), required supportive‑services reserves, and developer/owner fees that nonprofit developers take to pay staff after long pre‑development periods. Breitenacker said it can take five years or longer to reach construction for many projects.

Panelists gave regional cost examples and ranges rather than single definitive figures. Breitenacker said Western Massachusetts per‑unit construction costs have moved toward Boston levels; she described broad per‑unit ranges "like $3.50 to $7.50" (meaning roughly $350,000 to $750,000 per unit depending on project type and constraints) and said an early estimate for Northampton’s Crafts Avenue project was about "$650 a square foot". She also said, "I think we're coming in at a per unit cost of around 6 something, $6.10, $6.20, something like that," reflecting the uncertainty developers face during predevelopment.

Elan Tierney, president of Key and Riddle Architects and Designers Elan Tierney, an architect who designs multifamily housing across the region, listed additional cost drivers — labor shortages, tariffs and material inflation, limited land supply in the Northeast, and increasing local energy and construction codes. He detailed how different building codes (residential, commercial, and fire codes), state energy standards and local “stretch” or specialized energy codes raise design, materials and mechanical‑system costs.

Tierney said Northampton and some nearby towns have adopted specialized energy measures that can require passive‑house–level performance for multifamily projects. “Northampton opted into the fossil fuel free construction ordinance,” he said, adding that the ordinance and specialized codes are intended to reduce operational emissions but increase upfront construction costs for new and for some renovated buildings. He warned that some existing‑building renovation projects would become more expensive if the rules are applied too strictly, and noted the city added some exceptions for older buildings.

Tierney reviewed historical examples of projects his firm designed to show how per‑unit costs have risen over time: a 2010 modular veterans’ project he cited had about $4,000,000 construction cost for 20 units (about $200,000 per unit at that time), while other mid‑2010s conversions and new builds ranged in the low‑to‑mid hundreds of thousands per unit.

Jeff Spiritos and mass timber examples Developer Jeff Spiritos presented mass timber (cross‑laminated timber, CLT) projects as a lower‑carbon construction alternative with possible time‑savings. He described a completed, passive‑house CLT project in New Haven: "69 units, 87,000 square feet… $30,000,000 total cost… around $350 a square foot and 425,000 per unit," he said, noting the project also experienced COVID‑era closing delays and change orders that increased costs. On comparative cost he said one recent mass timber estimate was "$8 a square foot or 8% higher than a stick frame project," but he argued mass timber can yield programmatic and carbon benefits and in some designs approach parity with steel or concrete podium options.

Financing, timing and program limits Panelists repeatedly cited the structure and cadence of state funding as a major bottleneck. Breitenacker said affordable projects typically rely on one state funding cycle per year; if a project misses that round, developers can wait another year. She also said state review capacity can create another backlog even when funding exists. Tierney and Breitenacker described how layered legal and consultant reviews — sometimes many attorneys and specialized consultants per project — add soft costs developers must finance during long preconstruction periods.

Panelists also discussed Low Income Housing Tax Credits (LIHTC) and other subsidy programs as essential but constrained sources. Jonathan Wright, a local developer who participated in the discussion, emphasized that tax credits and bond cap limits, combined with long approval timelines, are a major constraint on deploying more affordable units.

Local incentives and permitting Speakers and some council members discussed local tools: Community Preservation Act (CPA) funds, expedited permitting and preapproved plan sets. Breitenacker said CPA funding is “critical as first in money to a deal” but typically covers only a small slice of total capital needs. City staff said zoning clarity and predictable local review steps can help reduce time and cost; several panelists urged that municipalities, local housing partners and residents advocate to the state for larger, steady capital pools and tax‑policy measures to reduce financing risk.

Why this matters Panelists framed the problem as regional and structural: rising costs and scarce, episodic public subsidy reduce how many units nonprofits can build and make it difficult for private builders to accept rental subsidies such as Section 8 or MRVP at the rents those programs support. Local leaders said that shortfalls in housing production push people out of the region and constrain local employers’ ability to hire.

Ending: next steps and advocacy Speakers urged local leaders and residents to press for larger and more predictable state capital programs and to support municipal measures that smooth approvals. "Show up at the state," Ward 5 Councilor Alex Jarrett and other local participants urged; Breitenacker added, "Northampton has been a critical partner for us," noting the city’s CPA contributions.

Provenance: Topic intro: "This meeting is hosted by Northampton's Housing Partnership and city council committee on community resources. We have invited housing developers and professionals who will discuss data, statewide initiatives, current trends in the housing market that that are contributing to the high cost of construction..." (transcript block starting at 11.44)

Topic finish: Jeff Spiritos on state programs and recommended funding approaches: "...the state can support a housing bond fund... 3% 4% 30 year construction and permanent financing..." (transcript block starting at 5620.95)