WESTERN MASS. – A new study from the UMass Donahue Institute shows the Pioneer Valley – Hampshire, Hampden and Franklin counties – has a significant deficit of housing units, which is having repercussions in economic development.

Keith Fairey, the president and CEO of Way Finders, told Reminder Publishing the problem is only going to get worse if action is not taken.

The report is the second in a multi-phase project studying Pioneer Valley housing issues. It was done in conjunction with Way Finders, the Community Foundation of Western Massachusetts and the Metropolitan Springfield Housing Study Advisory Committee.

According to the report, “Much of the region’s rental housing is out of reach for residents, calculated by comparing rental units available and incomes to determine housing income mismatch. This represents a sizable amount of the out-of-reach rental housing in the state: the Pioneer Valley has 10 percent of Massachusetts’ rental units but has 15 percent of the state’s rent income mismatch, in other words, one in six of all apartments in the commonwealth that are financially out of reach are in the Pioneer Valley. This is despite the region having only 10 percent of the state’s total rental units. This can be addressed and becomes an opportunity to relieve housing pressure for all through support for development of owned and rented homes. Based on calculation of income mismatch for rental housing, the region currently needs at least 17,000 more rental units at or below $500 a month. Hampshire County currently needs over 1,500 additional rental units at or below $1,000 a month and Franklin needs 100 more at $1,000 of all sizes for individuals and families.”

Way Finders is the Springfield-based organization that develops and manages housing in the region and Fairey said the problem is solvable, but certain steps need to be taken to create the housing needed.

The housing issue isn’t just a standalone challenge as Fairey said, “What we are failing to realize it’s about the economic vitality of the region.”

He noted a conversation with a business owner who was considering moving 300 employees into the area. The move was never completed because the business owner could not guarantee the employees could find housing in the area.

Availability of housing has been greatly affected by the coronavirus pandemic, he said. Way Finders is the local administrator of Emergency Rental Assistance funding from the state. Prior to COVID-19, the organization was allocated $2 million, which helped 800 to 900 struggling families.

Because of the pandemic, that funding has increased to $60 million designed to help 10,000 households.

The housing issue is not something that has just happened, though. Fairey said that since the recession of 2008 there has been a shrinking number of vacancies. In Springfield there is a 4 percent vacancy rate of apartments and a 1 percent vacancy rate for homes.

This is not just a lower incomes/affordable housing problem, either. The lack of housing affects the middle class as well.

In Springfield the median income is $40,000, he said, and the median rent is 22 percent of that median income. While the issue is the most severe in Springfield, Fairey said the other two communities where the problem exists are Holyoke and Amherst.

He sees the issue of housing linked to other challenges facing the region. The Pioneer Valley has an aging population which is living longer and staying in their homes. There is a declining school enrollment in many communities, which means less funding from the state, which will affect municipal finances.
Outside interest are driving up the real estate market as well, he said.

The report noted the housing challenges are not just for the bigger cities. “Rural, suburban and urban areas face different pressing issues in housing development. Rural areas have high costs of adding infrastructure that isn’t yet present (water, sewer, internet) while suburban areas often have restrictive zoning or other reasons limiting buildable lots including neighbor resistance and being somewhat built-out, urban areas face high redevelopment costs for lots with existing structures and also are sometimes more built-out (fewer available lots with nothing on them). In higher-poverty areas, building conditions are especially critical, particularly for lower-income owners, where deterioration can lead to housing loss. Keeping struggling owners in their homes and creating more stock to revitalize our region can be achieved using multiple strategies. Ultimately, thoughtful rural and urban development needs further political and monetary support to match demand and create possibilities where they are currently arising too slowly to cope with the natural growth and upkeep of our region.”

Fairey said both state and local governments must invest in housing. He said Community Preservation Act funds, which exist in many communities, can be used to develop housing. Amherst has established and funded a Housing Trust Fund to help with new housing. Springfield has established such a fund but has not yet allocated any money to it, which Fairey said the city should do. He believes that American Rescue Plan Act monies could help fund the Springfield trust.

In Northampton, Fairey said zoning laws have been adjusted to allow for greater density of housing.

He also sees the housing crisis as a chance for public-private partnerships.
One challenge, though, is the “not in my backyard” attitude that can be seen in communities considering additional housing. The opposition is not just aimed at affordable housing, Fairey said. He noted how a developer had to abandon plans for a market-rate apartment complex in West Springfield because of opposition from neighbors.

The report noted that “economic and racial segregation in the Pioneer Valley has meant that people don’t have fair and equal access to opportunity, through the process of securing appropriate and affordable housing. A regional approach to housing production to share in the opportunities of the Pioneer Valley would benefit residents of all income levels by relieving pressure on the increasing housing and rental markets and sharing resources.”

If part of the traditional American dream is homeownership, the report paints a challenging picture. It noted, “Assuming a 20 percent down payment, residents of many Pioneer Valley towns would need to save several times their median annual income in order to afford a mortgage on the typical home. Saving for a down payment on a mortgage is an aspiration for many, but the ability to do so varies greatly by circumstance and for people with low incomes, who are more likely to be people of color, this can be exceedingly challenging as these are households that are much more likely to be housing burdened in the first place. Spending over 30 percent, and in many cases over 50 percent, of household income on rent makes it extremely difficult for families to save money on top of those monthly commitments.”