Editorial: Use measured progress to fix the rental crisis
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It all sounds so simple.
At the end of its 31-page report detailing the many, many ways the 80% spike in Worcester rental prices over the past seven years is impacting the economy, neighborhoods, and residents, the Worcester Regional Research Bureau laid out a series of recommendations on ways to improve the situation.
One of the last lines summed it up nicely: “Concentrating on raising household incomes, slowing cost-growth, addressing 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 in the Dec. 12 report “Static Income, Rising Costs: Renting in the Heart of the Commonwealth”.
The recommendations from the report, which was done in partnership with WBJ for the “Redlining: An Economic Legacy” project, includes:
• The city government adopting its proposed inclusionary zoning policy to have residential developers set aside some units for affording housing;
• Using the city’s Affordable Housing Trust Fund to build more residential units; and
• Increasing funding from $10 million to $30 million for Massachusetts’ Housing Development Incentive Program to construct more housing in Gateway Cities.
These are all steps in the right direction, but as the WRRB summary illustrates, the real keys will be the much-larger, complex, and harder-to-define goals of paying people more, limiting the rise in their expenses, and building more housing fitting their needs. All are complicated to achieve in a complicated world.
Take the last one: Building more housing. New developments don’t magically appear, at no cost. A developer – either an individual or a company – needs to arrange enough upfront money to take on a risky, years-long project where any number of things will go wrong. Currently, those problems include rising construction costs, a limited supply of labor, and a potential slowdown in the economy, which could weaken demand for new housing in a year or two. The finished development needs to generate enough revenue to cover those costs, as well as its ongoing expenses. Developers generally aren’t super rich individuals who can just take a loss on a major project. Even if they are, they won’t stay super rich if their projects repeatedly generate losses.
Solutions like government money do help address these issues, but the real struggle is the effort to win over hearts and minds of businesspeople. New developments can generate profits without putting the squeeze to people. Rents can rise without forcing people from their homes. Rather than maximum profit, the goal should be striking the right balance between appropriate profits and keeping the overall community healthy and viable. Inclusionary zoning is little more than the government saying, “Take a little less profit on a handful of units so more people can afford to live in your development.” That sentiment is good for business in the long run.
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