Worcester Business Journal

December 12, 2022

Issue link: https://nebusinessmedia.uberflip.com/i/1487783

Contents of this Issue

Navigation

Page 7 of 27

8 Worcester Business Journal | December 12, 2022 | wbjournal.com REDLINING: An Economic Legacy Cost-burdened households More than half of Worcester renters are cost-burdened, the most impacted group from the Central Mass. cities studied by the Worcester Regional Research Bureau. Cost-burdened Cost-burdened owner-occupied units renter-occupied units 2010 2020 2010 2020 Fitchburg 38.2% 30.6% 55.5% 50.4% Framingham 42.9% 34.1% 52.4% 45.8% Leominster 33.9% 25.4% 51.4% 38.9% Marlborough 32.7% 26.6% 42.8% 48.2% Worcester 39.1% 28.5% 47.7% 50.5% Source: American Community Survey data analyzed by the Worcester Regional Research Bureau Rising cost of living is a problem for employers F L AS H P O L L Does the cost of living in Worcester hurt your employee recruitment and retention efforts? In 2010, more than 33% of low- and middle-income renters in Worcester were overburdened by the cost of renting their homes in the city. By 2020, that increased to 72%, according to an analysis of U.S. Census data. Rents spiked even further throughout the COVID pandemic, and in August 2022 the observed rent in the city was $1,800, an 80% rise from 2015. When polled online, 50% of WBJ readers said the cost of living in Worcester is hurting their workforces. COMMENTS "Our organization has hun- dreds of vacant positions; the cost of living & high rents in the city are a major factor for our employees in health & human services industry." "The rents in the city have to increase because of the cost of doing business in the city. The administration continues to be unfriendly to businesses, and the real estate tax burden, water & sewer fees, etc. are shifted more and more by resi- dential units as businesses leave Worcester. Keep voting for the lowest possible residential tax rate, residential will be paying full boat eventually anyway." - Richard J. Patient "The biggest problem is business has to compete with a government that pays people not to work. When you have to compete against that as a business, it makes it a lot tougher. It's not the rents that the people are paying that's the prob- lem. And whatever happened to the days of working two jobs and sometimes three if needed, like a lot of us did. Just saying." - Steven Christy Yes 50% No 50% e WRRB report breaks down the percentage of cost-burdened renter- occupied units by income levels and tracks the changes over the period between 2010 and 2020. e report found more than 80% of renters making less than $35,000 annually were cost-burdened, and the number of units in this demographic decreased by 1,717 over the 10 years. e income groups facing the biggest increase in percentage of cost-burdened rental units are people making between $35,000 and $75,000. e lower end of this group, making up to $50,000, saw the percentage of cost-burdened units more than double from 34% to 72%. Renters at the top income level, making over $75,000 per year, saw the biggest increase in the number of units, adding 3,684 units, and the portion of those renters who are cost- burdened remained low, although it still rose from zero to 2.3%. Homeowners are faring much better than renters in terms of being cost- burdened, but there are fewer of them in 2020 versus 2010. e percentage of homeowners who are cost-burdened has dropped significantly (from 39% to 29%) over the period between 2010 and 2020, but the number of owner-occupied units in the city dropped by more than 8%. Owner-occupied units make up the minority of Worcester housing, comprising 42%. e number of renter-occupied units climbed almost 12.5% since 2010 solidifying Worcester as being a majority renter-occupied city. "We need to build housing at all income levels, but we need to build affordable housing at the same rate as market-rate housing," said Leah Bradley, CEO of the Central Massachusetts Housing Alliance, a nonprofit in Worcester dedicated to preventing homelessness. Cost-burden and lack of affordable housing stock puts a lot of people in real danger of becoming homeless, said Bradley. "e Department of Housing and Community Development is under a pretty significant crisis. e shelters are full. We are using hotels and motels again, which we haven't had to do in years," said Bradley. "Folks just can't afford rent anymore, and one of the issues that we've seen is that there's a lot of folks coming in with no-cause evictions." Sometimes when landlords want to renovate a building, they don't renew the leases of tenants, Bradley said, and much of the housing stock in Worcester needs renovation. But, because of the increase in rental costs, tenants are not always able to find a new apartment they can afford. e same thing occurs with disasters like fires, or the July apartment collapse on Mill Street in Worcester, which displaced more than 100 residents. Some of these people move into family shelters or out of the city into surrounding towns, while the less fortunate among them end up on the street, said Bradley. Solving the affordability problem e Worcester chamber has been ad- vocating to build more housing in the city, including more affordable housing where the rents are capped based on household income, said Guardiola. "We realized when the city started this period of rapid growth 10 or 15 years ago that we were going to need more housing," said Guardiola. e chamber is backing the City of Worcester's effort to adopt inclusion- ary zoning, a policy requiring new residential developments to set aside a number of affordable units for residents who make under a specified income. e Worcester City Council is in the process of making inclusionary zoning into policy. It is likely to pass in some form, but the terms are being negotiated. To conclude its report, WRRB touted the City's inclusionary zoning efforts, as well as Worcester's Affordable Housing Trust Fund to incentivize the construc- tion of affordable units. Grants from the program will fund either 25% of the cost of an affordable unit or $150,000, whichever is less, according to WRRB. In addition, WRRB said the Com- monwealth of Massachusetts could increase funding for its Housing Development Incentive Program from $10 million to $30 million, which could facilitate construction of all types of units in Gateway Cities like Worcester. "Concentrating on raising household incomes, slowing cost-growth, address- ing the concerns of the most vulnerable residents, and increasing the number of available units should go a long way to ensuring that Worcester's housing and economy remains strong in the future," WRRB wrote. The Main South neighborhood has a large portion of residents who've been cost-bur- dened by rising rents. W PHOTO | CHRISTINE PETERSON

Articles in this issue

Links on this page

Archives of this issue

view archives of Worcester Business Journal - December 12, 2022