It’s Time to Upzone Worcester

Mason Primrose, Contributing Writer

For the blessedly unaware, there is a housing problem in the United States. According to the Federal Reserve and any other reputable source, housing costs have risen quickly nearly every year, pre-pandemic. Worcester itself is not immune to this problem, and it’s clear we need new ways to reduce prices. Fortunately for us, there’s a clear culprit in the rising housing costs. Zoning laws are laws that allocate specific areas of a city to be used for certain types of properties. For example, one area of a city might be designated only for commercial buildings, while others might be for single family housing or apartments. This can sound good on paper as a nice way to keep cities organized, but the practical effects of zoning quickly reveal it to have a number of drawbacks, including the speeding-up of gentrification and rising housing prices. 

Think about it for a second, and it starts to make sense. Zoning laws do this in two ways: either flatly denying the construction of denser housing, or by requiring specific permits which run the risk of getting blocked by the locals. Both of these contribute to ongoing supply problems. For example, if half of an entire city is restricted to only single family housing, then that leaves far less space for just about everything else. That means that as a developer, it becomes more difficult to find areas to develop new housing, specifically apartments. This leads to fewer new housing projects being started, and reduced supply at nearly every level of the housing market. As any introductory economics course will tell you, restricted supply, compounded with the high demand of a city, will result in high prices. 

This isn’t just theory either; this is an economic reality even in housing markets. One research paper from UC Berkeley found that new building projects substantially reduce rents in the surrounding area by as much as 2.3%, and that these effects persist years after construction has ended. According to another paper – this one from NYU – construction can drop by about 1% for each 10% increase in housing supply. According to another study, one specifically discussing supply skepticism, preponderance of evidence suggests that easing barriers to new construction will moderate price increases. The paper also has a number of references to other papers on the impacts of supply. One in particular by Gyourko and Malloy finds that after reviewing the literature, it is clear that the lion’s share of research finds that deregulation leads directly to greater supply, which leads to declining rents. One more by Gyourko finds the clear impacts of restrictions on housing supply and prices. And here’s the kicker, the studies aren’t talking about ‘affordable’ housing specifically – this is market-rate housing being built, but it still drops the rates of rent for just about everyone, even at the bottom. How can this be? How can building midrange to pricy housing possibly reduce rent at the bottom of the spectrum? 

Let’s use an example. Let’s say John has just graduated from our very own Clark University with his Computer Science degree and is on his way to a swanky office job with an equally impressive paycheck. Being a high earning, highly skilled worker, he’s naturally going to seek out some equally high-end housing. But lo and behold, the nice housing has either become prohibitively expensive due to its lack of supply, or there simply aren’t any available apartments for him to move into. What is he to do? Well, he’ll decide to search out some humbler housing. So rather than being nicely contained in an expensive apartment, he’s forced downwards into lower rent markets, set directly to compete with poorer residents. And he’s not unique either. En masse, people like John have large-scale effects on low income housing. Long term, this can significantly increase rents at the low end of the spectrum and cause gentrification. Even if we build only market-rate housing, we can substantially decrease rents by capturing people like John and keeping them out of the low-rent markets. 

Let’s come back to Worcester. I happen to like Worcester, and wouldn’t you know it, lots of other people do too. According to the 2020 census, our population has jumped to a rather large 206,518. That’s up 14.1% from 2010, and over 15,000 new Worcesterites. In simple economic terms, demand is very, very high. We can see this in the rent numbers as well. Estimates vary, but according to the Telegram and Gazette, rents in Worcester are still below statewide averages, but likely climbed about 3.4% from 2018-2019, slightly less after adjusted for inflation. It’s clear there are issues in the city, and the same article kindly tells us why: to keep rents from climbing too fast, it’s important to have a decent vacancy rate. That is, units that are on the market but left unrented. This is consistent with the supply and demand ideas that have proven true. So how is Worcester to up the supply and vacancy rate? Well, there are a few approaches to be taken. Worcester can subsidize the construction of additional units – which the city is already doing – and reduce barriers to construction. 

(via Worcester Zoning)

I’m partial to both, but for this piece I’m here to discuss the second. For a city of its size, Worcester has some issues with its zoning. Below is a piece of the town zoning map around Clark, and the full zoning map. This is accompanied by a guide to different zoning types. 

According to the most recent zoning ordinance, not only can apartment buildings not exist in the areas marked with RS-7 and RS-10, but not even the humble triple-decker we all know and love can exist within these regions. In the RL-7 sections, you need to chase down and aquire special permits to build, which could very well be protested and denied, and at best will take several months to acquire. And these aren’t tiny pockets of the city, either. At least half of Worcester is legally banned from even containing triple-deckers. And if you want to build anything taller, you’ll have to work within that orange and red patch in the center of the city. The zoning of Worcester creates an inhospitable environment for growth, and severely restricts our ability to combat rising rents. 

It’s clear Worcester is in desperate need of an upzoning. By doing this, we allow supply constraints to be broken or significantly reduced. When we allow builders to build, and maybe even hand out subsidies to spur on growth, we’ll see the pressure taken off of low income renters. We’ll see some new Worcesterites bringing their skills and money to the city to boost our economy. Building housing is building for everyone in the city. There’s no reason to continue on our current path. It’s time to let Worcester build itself up into a better city.