Worcester Business Journal

wbjournal.com | September 27, 2021 | Worcester Business Journal 21 Budget for action on housing V I E W P O I N T E D I T O R I A L T he Worcester Regional Research Bureau was honored to continue our proud history of collab- oration with the Worcester Business Journal this May with our coordinated focus on homeownership issues. e Bureau's report, "Achieving the American Dream: Disparities in Worcester Homeownership," used Home Mortgage Disclosure Act data in combination with U.S. Census Bureau statistics and other sources to provide insights into the realities of housing in Worcester and other Central Massachusetts communities. Key data the WRRB examined includes median gross rents, percent of owner and renter occu- pied, owner occupied unit value, and monthly owner costs, not just for Worcester, but for Marlborough, Fram- ingham, Fitchburg, and Leominster. e report's analysis provides some surprising insights into Worcester's housing market, such as the fact 43% of heads of household moved in before 2010, and 57% moved in more recently. e report shares some of the financial inequities between owning and renting your home. In Worcester, 44% of renters are paying 35% or more of income toward housing costs, while just 25% of homeowners pay 35% or more. is topic is particularly important as the city has reached a modern population peak of 206,000 while our housing market is hitting historic highs, and as policy- makers and community institutions consider responses. Some of those responses are detailed in e Research Bureau's most recent report, "Breaking Down the Bud- get." Worcester's city manager has released a preliminary plan for federal American Rescue Plan Act funds to reinvigorate the community. at plan would include $28 million for initiatives, such as capitalizing the city's Affordable Housing Trust Fund. Under the proposal, $10 million would be used to address community-de- termined needs, with direct input on spending priorities being sought in community input sessions on Sept. 27 and 30, and online at www.worcesterma.gov/arpa. e state is engaged in its own deliberations on $5.3 billion in federal aid flowing to Massachusetts. e Legislature created a $4.89-billion Federal COVID-19 Response Fund, and has been conducting Legislative hearings on potential distributions. Under Gov. Char- lie Baker's proposal, $2.9 billion would be released for immediate priorities, including $1 billion for homeown- ership and housing production with an emphasis on dis- proportionately impacted communities like Worcester. ese reports are available at www.wrrb.org, along with our other independent, non-partisan research on a wide range of topics. e bureau is proud of our 36-year history serving the community, and we thank all of our supporters – employers, institutions, foundations, and individuals who understand the importance of informed decision-making in shaping Greater Worcester's future. Paul Matthews is CEO and executive director of the Worcester Regional Research Bureau. BY PAUL MATTHEWS Special to the Worcester Business Journal The above Editorial is the opinion of the WBJ Editorial Board. The Viewpoint column, the A Thousand Words cartoon, and the Word from the Web commentary represent the opinions of their authors and do not necessarily reflect the views of WBJ or its staff. WBJ welcomes letters to the editor and commentary submissions. Send them to bkane@wbjournal.com. Worcester must play a better hand at the bargaining table Paul Matthews W F or decades, the city of Worcester struggled to attract investment. With housing prices historically low (or, more nicely put, afford- able) attracting builders to increase that stock has always been a challenge. When new construction costs don't cover what they can get for rent, it's not easy to entice developers to invest in commercial space either. Worcester has been a tough town to be a developer, and the city had little leverage in attracting new investment, so it developed a busi- ness-friendly toolkit of tax breaks, zoning leniency, and limited design review, all of which helped get deals done, but gave plenty of chips at the bargaining table to developers. Now, that power has shied. Worcester is in a posi- tion of strength. e city has a better hand to play at the table, and it is important the city plays it well. Historically, while the city officials could not change real estate values or rents, they could at least make it easier to do business here. Streamlining the approval process, better coordinating departments working on developments, and bending over back- ward to be accommodative were all important factors in getting investors to take another look. On the fi- nancial side, larger projects were given tax incentives, especially for those expanding operations and hiring additional staff. Add to that a big investment from the city and state governments to help clear key parcels, build out infrastructure, and work hand in hand, all willed new projects into being. e city, along with key private partners, played an important role in spurring the development activity we see today. Worcester is clearly a place where peo- ple want to be: the population rose by over the past decade by 8% to a modern record of 206,518 accord- ing to the 2020 U.S. Census; the arts and culture scene is gaining new attention; and developers are falling over themselves to build new stock and rehabilitate old facilities. With momentum now clearly on its side, Worcester's got a much stronger hand at the table. However, several projects now underway or in the final throes of their approval process feel out of scale with their surroundings and not in step with the city's urban design priorities, especially in how the projects interact with the street. e Alta Seven Hills apartment complex at the former Our Lady of Mount Carmel church site just off I-290 plans a large parking garage facing Shrewsbury Street, a critical pedestrian artery connecting downtown to Worces- ter's historic restaurant row. e 371-unit, $106-mil- lion market rate development is up for a $10-million tax break. Before being granted such a generous gi from the city, the developer – Wood Partners of Atlanta – needs to dramatically soen that edge of its project with retail or other interactive elements along that key artery in order to encourage the critical pedestrian link with Washington Square. Much like the city did when Galaxy Development of Webster was planning the Trolley Yard retail center off Grove Street, officials need to strongly advocate for a more pedestrian-friendly design from Wood Partners as conditional to the $10 million tax break. e new mixed-use development planned for the Sir Morgan's Cove site on Green Street is an exciting blend of retail, including a bowling alley and restau- rant, to go along with 318 apartments. e design is attractive, but it's on the drawing board as a 13-story giant in a neighborhood where surrounding buildings don't exceed four stories. is zoning shi, which was approved in May, should never have been allowed to happen. Was the project only truly financially feasible towering above everything else in the neighborhood? With rent prices spiking throughout the city, there has been a justifiable outcry for more affordable housing, but the former Table Talk manufacturing site in the heart of Kelly Square – one of the hottest development parcels in town – really the best spot for a project with potentially 400 affordable units? e plans from developer Boston Capital right now only designates the first 83-unit phase as affordable, with the rest still an open question. In one of the city's most heavily trafficked pedestrian areas, Boston Capital's plans offer minimal street level interactiv- ity, which ought to be required for the first floor of a project in the middle of all the action and just a 9 iron from the Polar Park baseball stadium. It is more prudent to have a mix of affordable and market rate units in every major development instead of a single massive project that could well end up being devel- oped as 100% affordable unless the city and Boston Capital can agree on a healthy mix. Worcester's new construction activity has brought palpable excitement to the city. Yet how these new projects fit into their locations, how they interact with the street, and their neighborhood, is critical for their long-term success. ey need to add to the neighbor- hood's vitality, not deaden the public realm. e city has new leverage with developers it did not have in the past, and needs to use it to push harder to achieve its urban design priorities. Worcester must create a design review board to offer feedback to developers at the early planning stages when input can be valuable, and not at the tail end of the process. Even if the board started in an advisory capacity, it would be a real positive. e use of big tax breaks ought to be rethought, too, only using that carrot as leverage to gain mean- ingful concessions. e city's split real estate tax rate is already a burden for commercial owners, and it's the existing property owners who absorb the tax breaks that mostly large, well-heeled, and out-of-town developers are being rewarded. Worcester is playing from a new deck of cards, and upping its game with stronger advocacy for urban design principles will help assure that today's momen- tum will continue well into the future. W

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