The squeezing out of that middle-income workforce is an issue that the mayors of three of New England’s highest-profile cities—Martin J. “Marty” Walsh of Boston; Ethan Strimling of Portland, Maine; and Miro Weinberger of Burlington, Vermont—are confronting in their municipalities, and was the subject of the closing plenary session of the recent ULI Housing Opportunity Conference held in Boston. Moderated by Jessica B. Zimbabwe, executive director of ULI’s Daniel Rose Center for Public Leadership, the panel discussed the challenges presented by the housing markets of those cities as well as the strategies for tackling the problem.
Despite a regional economy that is faring better than that in much of the country, many of New England’s major cities are struggling to provide enough affordable housing for their middle-income workforce. A new report by ULI Boston/New England’s Housing and Economic Development Council (in partnership with the Metropolitan Area Planning Commission), Building for the Middle: Housing Greater Boston’s Workforce, indicates that over one-third of Greater Boston’s households earning between 80 percent and 120 percent of area median income (AMI) are cost-burdened, meaning that they pay more than 30 percent of their income toward rent, a mortgage, or other home-related payments. And for the lower-middle-income households, the percentage is even higher—42 percent.
Weinberger, the longest serving of the mayors with just over four years in office, said that while Burlington has “been a leader for decades in [maintaining] permanently affordable housing”—thanks to a strong land trust program (first established by then-Mayor Bernie Sanders in 1984) and by accessing federal tax credit programs—the city has come up short in solving the remainder of the housing puzzle.
“What Burlington has not done well is to address the rest of the housing market,” said Weinberger. “The average Burlingtonian spends an average of 44 percent of [his or her] income on rent—one of the worst rent [to income] ratios in the country. It’s a combination of high housing costs and relatively low incomes.”
The city has produced little in the way of market-rate housing in recent years, exemplified by the fact that Burlington has added only 18 new market-rate units to the downtown area during the 12-year period of 2000–2012. “That is really at the heart [of the problem]. We need to fix a market that has been broken for a couple of decades,” said Weinberger.
In order to do so, Burlington is implementing zoning changes for the downtown, which will include reducing parking requirements for new development and improvements to the project review process. The city council also recently approved a predevelopment agreement between the city of Burlington and the property owner of the Burlington Town Center mall that sits along Church Street, which Weinberger described as “one of the most successful pedestrian marketplaces in the country.”
Under the proposed agreement, the redevelopment will create at least 270 new homes, of which at least 54 units (20 percent) will be permanently affordable. The city will also be buying back two city streets currently in use by the Town Center that will reconnect the downtown district with Burlington’s Old North End neighborhood. In exchange, the city will contribute nearly $22 million in public infrastructure improvements using future property tax revenue generated by the estimated $200 million of new private investment in the project through tax increment financing.
Mayor Strimling of Portland is faced with a housing crisis that affects not only the middle-income earners, but also the city’s most economically vulnerable populations. According to a recent special report by the Maine Sunday Telegram/Portland Press Herald, “Welcome to Portland: No Vacancy,” the city has a virtual 0 percent vacancy rate, and has seen 40 percent increases in rent over the last five years, including a 17 percent increase in the last 12 months—all of which is squeezing out families.
“We had a big controversy up there where one landlord evicted 24 families on Christmas Eve and gave them 60 days’ notice to get out—basically because he wanted to turn the buildings over to higher-end development,” said Stirling. “These were people with developmental disabilities, all low-income, many with Section 8. And you can feel what that pressure is doing to the middle- and lower-income [residents].”
A housing report issued in 2002 by the city council indicated that Portland needed 4,000 additional units of housing to keep pace with growth, but only 2,000 were built, creating a massive shortfall. As in Burlington, little market-rate housing was built during that period, so when an available apartment at a recently built 40-unit market-rate complex immediately rented for $2,400 per month, “that’s when it really flagged for people that something very serious was going on,” said Strimling, who was elected in the fall and assumed office at the beginning of 2016. “So now we’re looking at ways to protect families when the market doesn’t work, and we’ve got to make sure there are countermeasures in place to make sure that families aren’t kicked out on the street on Christmas Eve.”
And while Boston is experiencing a massive development boom—with $7 billion of development underway and more than $13 billion in the development pipeline—the city is experiencing the same affordable housing issues as its northern neighbors.
“There’s a positive story going on about Boston, but when you flip the coin over, you see a lot of income inequality, and you see a lot of the challenges that we’re facing, and housing is probably at the top of the list,” Walsh said. “Because we do a really, really, really good job of building high-end housing in the city of Boston, but we don’t do a good job—or we didn’t do a good job—of [building] middle-market housing.” So in October of 2014, 21 months after he assumed office, the city of Boston launched a plan to create 53,000 units of housing by 2030. “And to date, we’re at 68 percent of that—either approved, in the pipeline, under construction, or completed,” he told the crowd. In 2015, the city added 1,022 units of low-income housing, and in 2014 had 4,000 housing starts, with more than half classified as low-to-moderate-income housing.
One of the problems the city faces is the enormous amount of off-campus housing absorbed by the student population. Boston proper is home to 25 colleges, and Walsh said landlords typically charge up to $1,000 per student, with five or six students living in one apartment, thus pricing out families. So the administration is now working with the colleges and universities to build more on-campus housing to free up housing stock for families.
The municipal government also owns hundreds of lots throughout the city that will accommodate one- or two-unit projects, as well as larger parcels of land for multifamily housing that the city is making available to developers. After the city began the process, the state followed suit and is also now making state-owned parcels available for housing development. “There’s a unique relationship that we have going on, because we’ve got a Republican governor and a Democratic mayor, and we’re working extremely closely together to try and create more opportunities for housing,” said Walsh.