Worcester Business Journal

wbjournal.com | October 2, 2023 | Worcester Business Journal 17 Communities are more receptive to business development In September, the Worcester City Council unanimously voted to decertify a property tax break for Tennessee insurer Unum, after the company failed to meet the requirements of its tax-increment financing agreement. The move by the City defied its long- held stance on property tax breaks for businesses, which typically remain in place regardless of whether the companies meet the requirements. This came after the City of Worcester created an inclusionary zoning policy to require multi-family housing developers to include affordable units in their projects, as well as discussion among the City Council considering harsher penalties for developers and construction firms for not meeting diversity hiring requirements. When polled online, the plurality of WBJ readers said their communities are more receptive to business development than they were five years ago. Is your community more or less receptive to business development than it was five years ago? F L A S H P O L L B A N K I N G & F I N A N C E F O C U S NOW IS THE TIME 0% APY Improve your home's energy efficiency while making every dollar count. Scan code for details. FOR ENERGY EFFICIENT HOME IMPROVEMENTS MASS SAVE ® HEAT LOAN APPLY FOR A stmaryscu.org (866) 585 7628 More receptive 41% Less receptive 23% The same 35% for incoming developers." Two hotels which received TIF deals, the AC Hotel by Marriott Worcester and the Hilton Garden Inn, have not created the number of jobs they originally promised. However, the City choose not to attempt to decertify those tax breaks, as the COVID-19 pandemic hit the entire hotel industry, making hiring difficult, said Worcester Chief Develop- ment Officer Peter Dunn. Requiring affordability in all new housing In April, the Worcester City Coun- cil voted unanimously to adopt an inclusionary zoning policy requiring multi-family developers to set aside 15% of residential apartment units for house- holds with an income less than 80% of area median income, or 10% of units available to households making less than 60% AMI. Before Dunn wrote his recommen- dations, he and his team researched other communities' inclusionary zoning policies and the results of those policies. ey spoke with housing advocates, developers, land-use attorneys, and land-use consultants. "I'd say where we are at is kind of the average, if you will," said Dunn. "We came up with what we felt was the best recommendation for our community where we're at right now." Jacobs predicts inclusionary zoning will have an impact on market-rate developers' decisions to build large-scale multifamily developments in Worcester. Some developers he is working with have told him when they are developing their project's business plans, they count affordable units at zero or at a loss of income. With inter- est rates rising significantly over the last three years and construction materials and labor costs increas- ing, every penny counts, he said.If those pressures lessen and market-rate rents rise, it will be easier for developers to absorb the missing revenue from affordable units. "From an affordable housing devel- opers perspective, the IZ has no impact as City and State subsidies are available to them where market rate builders Continued on next page Peter Dunn, Worcester chief development officer

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