Dive Brief:
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A program that started in Detroit in last year is expanding to eight Rust Belt cities, including Buffalo, NY, Cleveland, St. Louis and Pittsburgh, with the goal of spurring local economic activity and improving the housing stock there using union labor, The Associated Press reported.
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The $2.1 billion initiative is funded primarily by the AFL-CIO Housing Investment Trust’s MidWest@Work Investment Strategy, with additional funds from partnerships with various economic development groups and nonprofits. Cities will not be required to supply matching funds.
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The initiative is expected to create 25,000 jobs, including 9,700 construction positions.
Dive Insight:
The news comes as unions face pushback in U.S. cities that were once strongholds of organized labor, where construction companies cite high labor costs as a reason to forgo signing collective bargaining agreements. Unions counter that their workers provide a better and safer product than nonunion workers. New York City’s Committee on Housing and Buildings is calling that notion into question by calling on the city to require construction safety incidents to be classified as either union or nonunion.
There’s little question as to the need for revitalization in the major Rust Belt cities. An annual report last month from Coldwell Banker ranking the most and least expensive housing markets in the U.S. placed Detroit and Cleveland and the bottom of the list based on average home prices.
Those low prices are catching the eye of companies who are reconsidering the Midwest and Rust Belt as being affordable regions in which to expand, due to low housing costs and available labor. In an August report, real estate listing website Zillow surveyed 100 housing experts and found that jobs and more affordable housing were the top reasons bringing people to the Midwest, though both the Midwest and Rust Belt regions faced slow job growth and negative housing equity.
In Detroit alone, the AFL-CIO-led program aims to renovate up to 300 single-family homes and other properties and it has completed six so far, according to the AP, which noted that there are roughly 30,000 vacant homes in the city — a figure that’s been building since its population started falling in the 1950s. Today, housing advocates in the city are looking at tiny houses, greenhouses and material reuse to contend with the excess, dilapidated inventory and need for affordable housing.