As Worcester struggles with a shortage of affordable housing, city officials are considering joining other Massachusetts communities in mandating that a minimum percentage of new housing units be affordable for low- and moderate-income households.
Worcester currently allows developers to charge whatever rent they want for new housing units. Often, those prices are too expensive for a lot of residents. The proposed policy — known as an inclusionary zoning ordinance — could change that.
Worcester’s city councilors are in the process of reviewing a draft of the ordinance and holding a series of public meetings on it. Although most members of council have expressed support for some form of inclusionary zoning, they must still sort out differing opinions on the specifics, such as income limits for affordable units in a building.
During a recent City Council meeting, Mayor Joseph Petty acknowledged the various opinions and discussed the need to include different community stakeholders in the decision-making process.
“Bring developers in. Bring housing advocates in, so we can all have the discussion together,” he said. “It’s not the end of the conversation. There [are] so many moving parts.”
Why Worcester’s leaning toward inclusionary zoning
Dozens of other cities and towns around Massachusetts — including Boston, Cambridge and Quincy — already have implemented forms of inclusionary zoning. In Worcester, housing experts say officials previously avoided such a policy because the city had a history of struggling to attract development.
When developers finally started viewing the city as an economic opportunity around 2016 — thanks to its growing population and cheap land compared to Boston — Worcester officials didn’t want to do anything like inclusionary zoning that would scare developers away.
Worcester officials’ consideration of inclusionary zoning is only now in response to the city’s shortage of affordable housing.
Median rent in the city is currently $1,800, up $150 over this time last year. According to Massachusetts’ subsidized housing inventory, just 13.5% of Worcester’s housing stock is designated affordable for low- to moderate-income households. Massachusetts’ two other largest cities have a higher proportion of affordable housing: 21% in Boston and 16% in Springfield.
“It’s just crazy,” said Steve Wage, who walks with a cane due to polio and has spent more than a year trying to find an accessible apartment in Worcester that’s around $1,300 in rent. Wage has to leave his current apartment in the city because his landlord is selling it. He has until January to move out.
“People are being driven out … there’s just not enough [affordable housing],” Wage added.
Debate on the specifics of inclusionary zoning
In September, the Worcester city manager’s office released a draft of the city’s inclusionary zoning ordinance, which would apply to all new housing complexes with at least 12 units.
The policy would give developers the option to reserve 15% of habitable square footage in the complex for people earning 80% of area median income — which is $79,600 for a three-person household, according to federal housing data — or 10% of habitable square footage for families making 60% of area median income — $59,700 for a three-person family. Developers could also have some combination of the two.
Under the draft ordinance, the maximum price of a unit could not exceed fair market rent amounts in Worcester nor be more than 30% of a household’s gross income. That means for inclusionary zoned two-bedroom units, rent can be no more than $1,492 at 60% AMI or $1,635 at 80% AMI.
Steve Teasdale, executive director of the Main South Community Development Corporation and a member of a Worcester affordable housing coalition, said the majority of renters in the city make less than $50,000 a year and would not benefit from apartments set at 80% of area median income.
“We need to do better than that,” he said. “Worcester is not a wealthy city, and that’s shown by the demographics of its rental household population.”
"Worcester is not a wealthy city, and that's shown by the demographics of its rental household population."Steve Teasdale
Although the inclusionary zoning ordinance gives developers the option to price units at 60% AMI, Teasdale is concerned that some luxury housing developers stigmatize lower-income renters and will prefer to build units at 80% AMI.
As a solution, Teasdale suggested the city amend the inclusionary zoning ordinance to mandate that at least a portion of the affordable units in a new housing complex be at the 60% AMI level. He said the ordinance will remain flexible for developers because it allows them to build more dense housing with fewer parking spaces than the city usually requires. Developers also have the option of paying their way out of the affordability minimum.
But city officials, some developers and the Worcester Regional Chamber of Commerce have pushed back, advising that councilors keep the proposed ordinance as is. Worcester Chief Development Officer Peter Dunn told City Council during a September meeting that developers will have a financial incentive to include units at 60% AMI since the ordinance doesn’t require as many affordable units in new projects if they’re at 60% AMI rather than 80% AMI. If the ordinance is too restrictive, it could eat into developers’ profits.
“We want to have this balance where we’re not stifling production because, as it’s been noted by a number of folks, there is a supply issue [and] we’re trying to keep production going,” Dunn said.
Robert Branca, a developer in Worcester, said a potential compromise could be for Worcester to use its new Affordable Housing Trust Fund as a separate mechanism to incentivize construction of units at or below 60% AMI.
City officials created the pot of money to finance new affordable housing, rehab existing housing and assist low-income homebuyers. The fund began accepting applications Tuesday.
The city can tell developers, “‘We’ll give you money if you do the things we really want done,”’ Branca said.
What’s next
State law requires an elaborate process before communities can pass inclusionary zoning ordinances.
In Worcester, City Council has already held several meetings on the proposed ordinance, including in September when councilors sent the policy proposal to the Worcester Planning Board for discussion.
The ordinance will eventually go back to City Council for another public hearing before councilors on the city’s economic development subcommittee discuss it. The final stage of the process requires that council pass the inclusionary zoning ordinance by a two-thirds majority vote. That means that at least eight of the council’s 11 members must vote in favor of the policy.
