How affordable is it to rent in Springfield? Experts weigh in on new report
SPRINGFIELD — Among the 26 Gateway Cities in Massachusetts, Springfield is the fourth most affordable , according to a recent MassINC report.
But the incomes earned by Western Massachusetts residents are far below what's needed to not be burdened by rent costs.
So, how affordable is it to rent in Springfield, really?
"Rents here look lower to people from other parts of the state, but income (here) is also lower," said Gerry McCafferty, director of housing for the so-called City of Homes. "Renters who live in Springfield can't afford to live here ... it's an enormous challenge."
The typical asking rent cost is close to $1,800 in Springfield, according to the new report. That cost is less than the national average — $2,069 — and much less than renting in the Boston area, which is in the $3,000 range.
The median income earned by Springfield residents is roughly $50,000 less than the income needed to afford typical asking rents in Springfield, the report shows. And Springfield has the lowest median income among all the Gateway Cities, at $29,781. Gateway Cities are medium-sized urban centers that were once industrial hubs but now need economic revitalization.
The Gateway City with individual earnings closest to Springfield is Fitchburg, at $40,500.
Close to a quarter of renters in Springfield are cost-burdened, spending between 30% to 49% of their income on rent. Severely cost-burdened renters make up 31% of the tenant population, and they spend more than 50% of their income on rent, the report said. To be cost-burdened means that other essentials — medicine, car repairs or food, for example — are forgone so the rent can be paid.
Keith Fairey, president and CEO of Way Finders in Springfield, a housing and human services provider, noted that the city is eighth on the report's list for people experiencing rent burdens.
"What stands out in the report is that rents in Springfield are high compared to greater Boston," he said. "Affordability is relative to the people living here."
Fairey, who also serves on the board at MassINC, the public policy agency that authored the report, said that, while the rents are lower in Springfield compared to other parts of the state, the real estate market is also "softer."
"There is less activity here, less transactions and lower costs," he said. "It's a different dynamic on who is investing in housing here."
Corporate investors have been a growing concern for housing advocates and those working in the housing sector.
"Increased investor activity means entire rental portfolios will be bought, rents will be increased, and there will be more profit for them," said Fairey.
The data from the MassINC report also pointed to deed-restricted housing and naturally occurring affordable housing, known as NOAH, as being helpful to solving the ongoing housing crisis.
Deed-restricted housing, said McCafferty, is homes and apartments that are built with public money but specifically state in their deeds that there will be affordability restrictions for its owners or renters, who must earn under certain income levels to live there.
"The restrictions will (stay) with the property regardless of if there are new owners," she said. This allows for sustained affordable housing opportunities.
In Springfield, 29% of affordable housing in the city is deed-restricted — that's close to 14,000 units, McCafferty said.
The other angle of units is naturally occurring affordable housing, or apartments that are affordable to households earning less than 50% of the state's median income without any subsidies or income restrictions, according to the report.
The report said in Springfield, 42% of affordable housing is this type, which is typically older and therefore less expensive to rent. But McCafferty noted that it's still out of reach for many.
"This is a comparison based on the state's median income, so it doesn't mean that naturally occurring affordable housing is affordable to Springfield renters," said McCafferty.
She also laid out an important distinction: "Just because it's more affordable, doesn't mean it's available housing," she said.
Economists consider a healthy vacancy rate to be between 3% to 7% — at this rate, there is an equilibrium where the vacancy rate is neither pushing rents up or down, she said. Springfield's vacancy rate is 3.4% — very low, according to an earlier report from MassINC on the topic of monitoring housing in Gateway Cities.
"That puts pressure on the market, increasing competition and driving rents up," she said.
The topic of housing affordability has inspired conversations on how to solve the burgeoning crisis, she said.
Building more — and diverse — housing decreases the tug-of-war for a unit, she said.
The city has 670 units in the pipeline. And among those, 255 units will be deed-restricted, she said.
Offering increased public assistance to renters and fully funding those programs is an "expensive but achievable option," she said.
Public assistance for housing, which includes Section 8 (a federal program) and the Massachusetts Housing Voucher Program, is "only available to a quarter of people who need access to them," she said. "Broadening who the programs are available to (reach) will improve affordability."
McCafferty also said a solution would be for employers to increase the salaries of residents in this section of the state.
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