Politics and the City: So many new people in Worcester, not enough housing

Worcester City Hall


CYRUS MOULTON   | Telegram & Gazette

It’s a stat that city boosters love to note: Worcester has grown by roughly 27,000 people to a population of 206,500 in the last decade – its highest population in history, according to the U.S. Census Bureau.

But one important statistic has not kept up with this population boom: Over the same time period, the census calculates the city has only created 10,000 units of housing. 

“We know that there’s a housing crisis in Worcester,” David Sullivan, director of economic development and business recruitment with the Worcester Regional Chamber of Commerce, said, citing these statistics. 

Moreover, the crisis only worsens when you focus on designated affordable housing – of those 10,000 units, only 500 were designated affordable housing, Sullivan noted. 

As of 2020, 13.5% of Worcester’s housing stock qualifies as affordable, according to the state Department of Housing and Community Development’s Subsidized Housing Inventory. To qualify for the inventory, the housing unit must have an affordability restriction of at least 30 years if new and at least 15 years if rehabilitated, and be limited to households not exceeding 80% of area median income. Area median income for a household of two in Worcester is $88,400, according to the Massachusetts Housing Partnership.

“It’s pretty desperate,” Main South CDC Executive Director Steve Teasdale said Friday of the affordable housing situation. He said that the CDC’s Grant Street Project with 48 units garnered more than 1,700 people applications. It is scheduled to open this fall. 

Housing crunch likely to worsen

Moreover, the housing crunch is expected to get worse.

Over the last 18 months, the average price of a three-bedroom rental unit in Worcester has increased from $1,500 to $1,900 per month, Teasdale said. But Teasdale noted that 65% of the City’s rental households earn less than $50,000 per year. Moreover, a recent report from former City Manager Edward M. Augustus Jr. to the City Council noted that there are 1,925 market rate units permitted for development as compared to only 126 affordable units. 

“In other words, affordable units under production comprise only 6% of the city’s housing development pipeline,” Teasdale said. 

As a result, city officials estimate that 13.5% will go down.

But city officials are proposing something to help ease this crunch: an inclusionary zoning ordinance.

Inclusionary zoning is a tool used by communities to ensure a certain amount of affordable housing is included in housing development projects. More than 140 communities in Massachusetts have some sort of inclusionary zoning in place, with some incentive-based and others mandatory, according to a 2019 report from the Massachusetts Housing Partnership.

Advocates hope the next community to adopt such zoning is Worcester.

“It’s not a panacea,” the city’s Chief Development Officer Peter Dunn said Tuesday night during a discussion of inclusionary zoning at the Economic Development Committee meeting. “But it’s another tool we can use.”

Adding to the ‘toolbox’

But that “tool,” to extend the metaphor, comes in many different sizes. 

For instance, will the requirement apply to all developments or just developments over a certain size? How many units will developers be required to set aside as affordable in developments and how will that be determined? How much money can a person make and qualify for such units? Will the units remain income restricted in perpetuity or only for a certain period of time? What kind of housing – rental or owner-occupied – will be created? Should there be a payment-in-lieu-of program so that a developer can opt out of requirements by putting money into the Affordable Housing Trust Fund? Will inclusionary zoning apply citywide or only in specific areas? 

These are the questions city officials and community leaders are asking as the attempt to find the right tool for Worcester has begun.

Dunn said that the city has compiled data from many gateway cities that have inclusionary zoning programs, and officials will begin talking with their counterparts in such communities to find out what is and is not working, what changes they should or would make, etc. He also told the councilors on the subcommittee that city officials had talked with local community development corporations, developers and affordable housing groups. 

Dunn suggested repeatedly that the city is seeking a “balance” to create affordable housing while not alienating developers. 

“As we anticipate how the market will respond to this regulatory framework, we are trying to strike the right balance of increasing affordable housing production without stifling housing development overall,” Dunn said. “If adopted, this zoning initiative will be one new tool in the toolbox to help address our affordable housing needs and will complement the new Affordable Housing Trust Fund we have created.”

Dunn gave a report recently that suggested the city’s initial thinking on the topic. This includes:

• Applicable to all multifamily developments – rental or for-sale – with 12 units or more.

• 15% of habitable square footage at 80% AMI or 10% of habitable square footage at 60% AMI, or some combination thereof.

• Affordability restrictions lasting for at least 30 years.

• Allowing a payment-in-lieu-of program.

Feedback from public

Meanwhile, members of the economic development committee Tuesday solicited feedback from the public. They heard pleas for housing that is affordable for income levels around 50%-60% of AMI, that is designated not just as affordable but also as accessible for those with disabilities, and that can accommodate families who may need more than three bedrooms. 

“Our aim is to come up with as many ideas and suggestions as possible to go to crafting the ordinance,” Committee Chairman and District 1 Councilor Sean Rose said. “(Inclusionary zoning) is, without a doubt, important to this committee and, I would presume, important to the (full) council as well.”

The committee unanimously ordered the city to develop a draft ordinance taking into account public comment.  

Finally, the chamber is pushing for flexibility in the future ordinance and focusing on ways to incentivize developers to create affordable housing, so that inclusionary zoning is seen as the proverbial carrot rather than the stick.

“Some of the most important aspects of the ordinance will be that there are as many options as possible for the developer,” Sullivan said.

“A successful IZ ordinance provides incentives to developers for carrying out the required affordable housing construction, rather than being punitive by requiring them to add to their bottom line and increase their workload at a time when developers are already mired by rising labor and materials costs and increased interest rates,” the chamber wrote in a recent letter to the city.  

The chamber “strongly” recommended incentives such as a waiver for certain off-street parking requirements as well as an opportunity for developers who construct more affordable units to get better incentives.

In sum, there are a lot of questions to answer and decisions to be made. 

But officials are listening. The public is, too.

Worcester residents should have housing options,” a man who identified himself simply as “Tony” said while calling into the Economic Development Subcommittee meeting Tuesday night. “This decision should be a no-brainer.”

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