Worcester Business Journal

wbjournal.com | October 30, 2023 | Worcester Business Journal 17 residential real estate market. As a result, Worcester is considered one of the hottest real estate mar- kets in the Northeast, including ranking fourth on Realtor.com's ranking for 2023. at, city leaders say, isn't as great as it sounds. "ose aren't places we want to be," said David Sullivan, director of economic development and business recruitment for the Worcester Regional Chamber of Commerce. Sullivan noted the city has seen its population rise 14% over 10 years. "e question becomes how do we house all these people," said Sullivan, adding Worcester needs more housing of all kinds. Housing development factors going in wrong direction e city is working to tackle the significant problem of lower-income households struggling to find a place to live. But young professionals the city wishes to retain af- ter they graduate from local colleges may be priced out W O R C E S T E R : J U S T T H E F A C T S F A C T B O O K of buying a home and are being pushed into the scramble for a vacant apartment. Several high-visibility apart- ment developments have opened or are planned for downtown Worcester, including mixed-use projects that will provide retail shopping for residents. But with hundreds of planned units in the pipeline, Sullivan said it's really just a trickle of new stock. ith about 80,000 total housing units in the city, just 800 market-rate rental units have come online in the last four years. "e rental units are at their ceiling for what they can bear, so people are forced to look for housing out- side of Worcester," Sullivan said. John Tocco, managing partner and chief operations officer for V10 Development, said Worcester had a lot going for it when his company decided to build a multifamily apartment complex abutting Polar Park. Known as e Cove, it will add 173 high-end apart- ments to the bustling Canal District when complete. "Worcester is a tremendous asset, and it's tremen- dously underutilized," said Tocco, a College of the Holy Cross alumnus who lives on the North Shore. With amenities like Polar Park and numerous fine dining options within walking distance, plus proximity to outdoor destinations like Wachusett Mountain and the Berkshires, Worcester is a developer's dream in many ways, he said. But with a spate of similar projects in the pipeline from other developers, Tocco was dubious about future multifamily construction in Worcester. Inclusionary zoning, which requires new projects to restrict up to 15% of units as affordable for renters who meet income guidelines, has put a damper on mar- ket-rate housing construction, Tocco said. Meanwhile, the cost to develop such projects is climbing due to rising land values and interest rates impacting how much it costs to raise the debt to build, and construction materials themselves remain expen- sive, Tocco said. "Everything is going in the wrong direction," Tocco said, noting multiple factors would have to shi in order to consider building more rental housing in Worcester. City Hall has launched 10 programs aimed at in- creasing affordable housing options for low- to moder- David Sullivan, director of economic development, Worcester chamber John Tocco, managing partner for V10 Development Continued on next page Worcester Common has become a regular location for events and festivals. PHOTO | CHRISTINE PETERSON

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