Amid housing crisis, Boston’s building boom has gone cold. How much of that is due to Mayor Wu?

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Wu’s detractors point to her housing policies as the root cause of the slowdown — specifically, her affordable housing requirements. But what’s happening in Boston cannot be solely blamed on city policy changes. Indeed, broad shifts in the economics of homebuilding, such as inflation, higher interest rates, and even rising insurance costs, have dampened construction nearly everywhere in the years since the pandemic.

“There has been very little development under Mayor Wu, but she’s been dealt a horrible hand,” said Adam Guren, an associate professor of economics at Boston University. “Could the mayor be pulling more levers to try to get housing built? Sure. But is the reason we’re not building a lot in Boston because she hasn’t pulled those levers? I don’t believe so.”

On the campaign trail and in the mayor’s office, Wu has presented herself as something of a foil to her predecessor, Mayor Martin J. Walsh, and the “build, build, build” approach that fueled a market-rate building boom at the end of his term.

While Wu has embraced rezoning efforts to spark new construction and offered generous subsidies to convert obsolete office buildings into apartments, she has consistently prioritized housing for lower- and middle-income residents. She has pushed — unsuccessfully — for a version of rent control and a tax on high-dollar real estate sales, and invested a large chunk of the city’s federal pandemic funds in affordable housing, with some 5,455 income-restricted units completed or under construction between 2022 and 2024.

But it is rules requiring more affordable units in new development, along with Wu’s embrace of green energy codes that can drive up construction costs, that Wu’s critics point to as a major cause of the slowdown — at least one the city can control.

Whatever the reason, new construction has fallen off a cliff during the last few years.

Housing construction held relatively steady between 2013 and 2022, with an average of 4,247 units started annually, according to city data. And there was a surge in permitting near the end of Walsh’s administration, with the Boston Planning & Development Agency board, now the Boston Planning Department, approving 6,900 units in 2019, 9,800 in 2020, and 6,858 in 2021.

But over the last two years, new construction has dropped precipitously, with just 2,358 units breaking ground in 2023, a 46 percent drop from the previous year, and 2,389 units starting in 2024.

Wu’s administration prefers to cite the number of units in the city’s approved development “pipeline” — some 32,147 homes that have been permitted but not yet broken ground. But that number includes megaprojects permitted under Walsh’s administration, including 6,400 units at Suffolk Downs in East Boston, and big mixed-use projects like Dorchester Bay City, where housing would be balanced with lab space, which faces financing challenges of its own. One-off, midsize apartment buildings these days are few and far between.

Bruce Percelay, founder of multifamily developer The Mount Vernon Co., said his firm has a six-story, 117-unit apartment building on Leo Birmingham Parkway in Allston permitted and ready to go — but the firm can’t make financing work to start construction.

Materials costs for multifamily buildings have jumped more than 40 percent since the start of 2020. Interest rates on construction loans have soared. And the investors who typically finance housing developments now demand higher returns, meaning projects need to make a bigger profit to get built at all. It is not uncommon for apartment towers in Boston to cost $1 million a unit these days.

Another factor: Wu’s move in late 2022 to increase the city’s affordable housing requirement — the share of units in most new buildings that must be set aside at below-market rates — from 13 percent to 17 percent, with 3 percent more held for Section 8 voucher holders. The change took effect in October.

Developers loudly protested this change to the Inclusionary Development Policy, and today, many of them blame the increase, at least in part, for the slowdown in new buildings.

“I have repeatedly expressed to City Hall that 20 percent of nothing is nothing,” said Percelay, “If they reduced the affordable requirement to 10 percent, they would get far more units produced than by asking for 20 percent, which produces zero.”

Wu’s opponent in this fall’s election, Josh Kraft, has assailed the mayor over the issue and proposed lowering the IDP back to 13 percent — a return to the way housing was built under Walsh. He has said the change would unlock the majority of stalled projects in the city. His campaign said he would set a goal of creating between 5,000 and 7,000 units annually.

“In my conversations with a broad cross-section of people involved in the Boston housing ecosystem, including housing advocates, developers, construction firms, union officials, and firms that finance projects, everyone believes that Mayor Wu’s policies — not the economic conditions — are the primary driver in slowing down housing production,” Kraft said.

The Wu administration rejects the notion that the steeper affordable housing requirement is responsible for the slowdown. They also point out that many of the projects that are struggling to secure financing were permitted under the previous, lower IDP rules.

“We’re in a unique economic moment,” said Boston Housing Chief Sheila Dillon. “Cities across the country are struggling to build housing right now; it’s not something that’s unique to Boston. The notion that these financial challenges are made locally is just not accurate.”

For their part, housing economists said that pinning the housing construction downturn on the IDP is an oversimplification.

While requiring more affordable housing does reduce a developer’s profit margins on some of their units, they said, the higher costs of building and borrowing have much more to do with a project’s bottom line.

“That is a far greater cost burden than the inclusionary requirement,” said Guren, the BU economist, who has studied building costs in the city. “You might see a few projects on the margins start to move if you reduce the affordable housing requirement. But my feeling is that the majority of the projects that are stuck are stuck because their numbers are way off.”

Another big factor: The increased returns that investors — insurance companies, pension funds, and banks — who finance housing development are seeking now. Higher interest rates mean those investors can make money in less-risky ways than building housing, so to finance a project, they have been demanding a higher return.

That has pushed some developers to suburban sites, where they can build at a lower cost.

Boston-based Marcus Partners, for instance, broke ground this month on a 304-unit project in North Attleboro. It’s a four-story wood-frame building, far cheaper per unit than the taller steel and concrete structures typically required in downtown Boston, said Levi Reilly, the firm’s head of development. Land costs less in North Attleboro, too, and the project landed $3.9 million in state infrastructure funding, all of which bolstered its bottom line.

“The bar for investment just got raised everywhere, and that’s not unique to Boston or Massachusetts or New England,” said Reilly. “It’s across the country. The bar got raised high.”

Still, while Boston remains slow, multifamily construction is happening faster in other big cities. Boston permitted less housing per 1,000 people in 2024 than 16 other peer cities, including Raleigh, Denver, and Detroit, research from the Boston Planning Department shows.

And numerous studies have shown that higher affordable housing requirements reduce housing production, said Andrew Mikula, a senior housing fellow at the Pioneer Institute, a free-market think tank. Just over the river in Cambridge, for example, developers blame the city’s 20 percent affordability requirement for grinding development to a near halt in recent years.

“Policymakers in Boston and elsewhere shouldn’t use those macroeconomic concerns as excuses not to address our housing challenges,” said Mikula.

Housing economics aside, Wu ran on making Boston more affordable for people who live here, including longtime residents in lower-income enclaves in Roxbury and Dorchester, where rents and home prices have climbed quickly.

Many community activists have long called for a higher IDP, and they said Wu’s effort represents a commitment to those residents who felt left behind — and even squeezed out — by the Walsh-era market-rate building boom.

“We have been asking for affordable housing to be a priority for years, and Mayor Wu has made good on that,” said Armani White, executive director of advocacy group Reclaim Roxbury. “Good housing policy is not just about what’s good for developers.”

Dillon, who has led city housing efforts under four mayors, said she expects Boston’s development pipeline to begin moving quickly if the market turns around. And the city has $110 million in a new Housing Accelerator Fund Wu created to help advance projects that are paused because of financing constraints. As they select recipients, the city is focused on boosting projects with considerable affordable housing.

“When you talk to residents, the number one thing they say is that we need more affordable housing in this city,” Dillon said. “We are doing everything we can to deliver that.”

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Andrew Brinker can be reached at andrew.brinker@globe.com. Follow him @andrewnbrinker. Catherine Carlock can be reached at catherine.carlock@globe.com. Follow her @bycathcarlock.