A new report by the MassINC Policy Center finds the state’s Gateway Cities need 83,000 new homes and apartments over the next decade. Otherwise, the state’s housing crisis could worsen.
The 26 cities are post-industrial, mid-sized urban centers with median household incomes below the state average. They’ve historically been more affordable than other parts of the commonwealth. But amid Massachusetts’ housing shortage, prices across many of the cities have steadily increased to unsustainable levels for residents.
The report’s authors propose ways cities can increase their housing supply, including loosening zoning restrictions and offering developers more subsidies. But until the rate of housing production speeds up, the consequences of the shortage will mount.
Over half of Gateway City residents are cost-burdened, paying more than 30% of their income on rent, according to the MassINC report, which relies on data from the U.S. Census Bureau and Zillow. In many of the cities — including Methuen, Chelsea and Lynn — the report finds that median incomes are about half of what tenants need to make to afford typical asking rents.
The report, “The Gateway Cities Housing Monitor,” notes that tens of thousands of people already move out of Massachusetts every year, in part because housing is too expensive in Gateway Cities. For those who stay, the report says they’re less likely to eat out at restaurants and attend local events, depriving Gateway Cities economic growth. The financial stress of making rent can also weigh on their health and ability to be productive at work.
“Not being able to pay for your housing is one of the worst forms of financial stress you can have,” said Ben Forman, the director of MassINC’s Gateway Cities Innovation Institute and one of the report’s authors.
The study argues that the cities are prime spots for more housing because they have underused land that can accommodate new homes and apartment complexes. They’re also walkable, feature convenient transportation infrastructure and have an array of hospitals, universities and museums.
The authors calculated the need for 83,000 new homes based on current and projected demand over the next decade. In order to build that many homes, the report says the cities have to double their pace of housing production. Cities should also prioritize rehabbing thousands of units that are currently vacant and in disrepair.
But high construction costs make those goals hard to achieve. Forman noted that the average cost of rehabbing an old, vacant property can be about $400,000. And in several cities like Pittsfield, New Bedford and Springfield, average rents aren’t high enough to attract developers who need to cover construction and operational costs. Cities try to fill the gap by offering developers subsidies and tax credits, but that type of financing is often enough for just a few projects each year.
“If we keep doing things the way we’ve been doing things, I think it’s inevitable that we’re just going to erode more and more of that [affordable housing] stock,” Forman said.
The state’s trying to address the problem with the Affordable Homes Act, which allocates $5.2 billion to create thousands of new homes and help landlords upgrade existing ones. Still, the MassINC report says that in order for that money to have the most impact, cities must ease more zoning codes.
Forman noted that just two gateway communities, Chelsea and Quincy, allow developers to build triple-deckers without undergoing lengthy regulatory reviews or adhering to other impractical building requirements. And many cities still have strict policies that force developers of new housing complexes to set aside a lot of land for parking spots — space that could otherwise be used for more housing units. Everett is an exception.
“By removing bureaucratic hurdles and creating flexible parking requirements tailored to a transit-oriented approach, Everett has unlocked significant housing potential, launching a significant increase in housing production within the city,” the report reads.
Housing advocates say they don’t doubt that more housing will go up in Gateway Cities as additional state funding becomes available and as local governments try to comply with the MBTA Communities Act. But they question how many of those new units will be affordable for residents with low incomes.
The tight housing market has helped fuel a surge in homelessness across the state. In the Gateway City of Brockton, councilors have raised concerns about public safety around encampments. On Tuesday, they passed an ordinance to fine people $200 for sleeping outside.
Judith Liben, a housing attorney with the Massachusetts Law Reform Institute, stressed that localities must prioritize taking advantage of all forms of financing to build housing for the most vulnerable residents.
“There is a real crisis for low income people,” Liben said. “They’re very worried, very anxious and very frustrated.”
