Worcester May Be Headed Toward Housing Crisis, New Data Shows

WORCESTER, MA — Housing advocates in Worcester are sounding the alarm about a present housing crisis that may make the region's homelessness problem worse without swift, coordinated action.

According to the Central Massachusetts Housing Alliance (CMHA), the rental vacancy rate hit 3.3 percent in 2021, the lowest since 2010 when the vacancy rate was above 7 percent. That low inventory — and rising housing costs in communities east of Worcester — has driven the average rent price in the area above $1,800, according to Zillow.

CMHA data analyst Jack Moran called those two factors an "equation for homelessness in Worcester," adding that vacancy rates are most likely lower today.

Those two data points sit on top of evidence that points to a worsening housing situation in Worcester: stagnant wages, rising evictions, limited shelter options and laws that prevent housing from growing quickly.

About two-fifths of Worcester residents earn below $41,000 per year, according to U.S. Census data. Meanwhile, the recent annual Out of Reach report by the National Low Income Housing Coalition found that a person would have to earn over $65,000 per year in Worcester to afford the average two-bedroom apartment. The report uses the federal guideline that no more than 30 percent of household income should go toward housing costs.

At the same time, incomes are not rising for lower-income local residents. The annual household income for two-fifths of Worcester residents has only increased about $5,000 since 2019. Household incomes for the highest earning Worcester residents has increased about $11,000 since 2019.

Worcester has a large pipeline of new housing units set to open in the next few years that may relieve the low vacancy rates. Many of those units will be market-rate — in other words, priced as high as a developer feels the market can bear.

There are already more than 51,000 households in the region that are paying more than 30 percent toward housing. Those residents, CMHA officials say, are "making it work" by cutting back on necessities like food, working more hours or working multiple jobs.

Rental evictions have also been rising in Worcester since a Massachusetts pandemic-era moratorium ended in October 2020. There were about 3,000 evictions between October 2020 and today, with many of those former renters ending up in an overloaded local shelter system, according to CMHA officials. CMHA is a regional nonprofit that coordinates the response to homelessness in Worcester and beyond and tracks the local homeless population.

In February, the Worcester area saw a recent high 810 people either living in a homeless shelter or outdoors, according to CMHA's data. That's double the population counted in February 2021, and part of an increase in homelessness in Worcester and smaller communities like Webster and Spencer, CMHA Executive Director Leah Bradley said.

The number of homeless living in shelters and outdoors dropped to about 523 in May — not because the population shrank, but because many unsheltered people scatter during warmer weather and can't be counted.

Data on the local homeless families also artificially dropped during the pandemic, Bradley said, because those families were forced out of shelters due to social distancing requirements. Advocates say many families fled to substandard housing, where children and adults were exposed to lead and other harmful environmental factors.

Worcester is heading toward a winter with about half the usual number of shelter beds, and no formal plan in place to increase them. In 2022, the Hotel Grace shelter closed, and was replaced with a 60-bed temporary shelter at the Blessed Sacrament church. But city officials have said they are not interested in putting resources into congregate shelter beds.

The number of homeless families was over 600 as of May. Massachusetts has a law that requires the state to place families in shelter. Existing family shelters have been full, leaving the state to rent hotel rooms in communities across the state.

Bradley said state, federal and local governments need to take steps to alleviate the crisis.

Looser zoning restrictions allowing for the construction of multifamily housing could help produce housing units quickly. The state's new MBTA communities zoning law is a step toward that, but some towns — including Holden — are resisting it. Cities like Worcester also still have zoning laws that prohibit multifamily developments in single-family zones.

An increase in housing vouchers would also help alleviate long backlogs. There are about 30 unsheltered people in the Worcester area right now who have vouchers in hand, but can't use them due to a shortage of suitable local units, Bradley said.

Laws that protect renters, including sealing eviction records — an eviction on someone's record makes it hard to secure housing in an extremely competitive market — for renters who lose housing in no-fault evictions. And one of the state's main developer subsidies, the Housing Development Incentive Program (HDIP), should come with affordability requirements. HDIP is structured to provide subsidies for only market-rent apartment developments in the state's 11 "Gateway Cities," including Worcester, Springfield and Fitchburg.

The state's Residential Assistance for Families in Transition (RAFT) program should also get more support. The program currently provides up to $10,000 in a calendar year to prevent evictions and utility shut-offs. CMHA believes it will have about 7,000 applications for RAFT help by year's end. Gov. Maura Healey's fiscal 2024 budget — which has not been passed by the state Legislature yet — cuts the RAFT benefit to $7,000 every two years. The average household applying for RAFT through CMHA earns under $20,000 per year, the agency said.

Worcester has started several new programs that may help the situation. The city council passed a new inclusionary zoning law this spring, although it was more conservative than housing advocates had wanted. As part of that measure, Worcester set aside $1 million for direct rental assistance for city residents. Worcester also started a new Affordable Housing Trust Fund with federal stimulus money.

If trends continue, Worcester is heading toward a crisis point that cities like San Francisco, Vancouver, Seattle and others have seen, Bradley said — a "spiral of housing instability" that will have the greatest impact on the most vulnerable people in the region.