Worcester’s housing market, once affordable, is squeezing out many residents
Dave Vespucci fears he’s on the verge of homelessness.
For 22 years, Vespucci has lived in a sky blue duplex in a quiet, residential neighborhood in Worcester. He says he’s been a good tenant, never missing rent and caring for the house like he owns it.
“I painted it three times, paid for it myself, patched cracks in the ceiling … used to clean the gutters, mow the lawn,” Vespucci, 74, said. “This is my home.”
But with property values and rents across Worcester surging, Vespucci’s landlord is forcing him out as part of a plan to renovate the house and sell it for a profit. Vespucci, who has diabetes and a bad back after working decades in the construction industry, lives off $850 monthly disability payments. He’s unsure whether he’ll be able to find a new apartment he can afford.
“The stress is killing me,” Vespucci said, noting he’s lost about 20 pounds since learning he must move several months ago. “[Rental] prices are outrageous.”
Vespucci’s plight exemplifies an increasingly common story in Worcester, where home values have increased 117% since 2011 and experts say the market is squeezing out more than 20,000 residents struggling to afford rent. The problem stems from Central Massachusetts’ population growth over the last decade. Worcester’s supply of affordable housing isn’t keeping up with demand.
Just 13.5% of Worcester’s housing stock is affordable for low- to moderate-income households. For comparison, that number is higher in Massachusetts’ two other largest cities: 21% in Boston and 16% in Springfield. Housing advocates say Worcester’s percentage must increase to around 20% to meet the need.
“We have a waiting list of over 200 people waiting for our help. And it grows daily,” said Lindsey Richmond with RCAP Solutions, a nonprofit that provides housing assistance in and around Worcester. “Things have to change.”
According to the Massachusetts Housing Partnership, about half of all Worcester residents are cost-burdened, meaning they pay at least 30% of their income on rent and utilities. Steve Teasdale witnesses the consequences of that often.
Teasdale directs the Main South Community Development Corporation, a nonprofit that builds affordable housing in Worcester. The organization’s latest project involves constructing 46 affordable units at 92 Grand St. During a recent tour of the townhouse style-complex, Teasdale showed off a walk-in closet in a three-bedroom apartment. In other units, construction workers were busy installing wood floors and painting walls.
“The [Worcester] real estate market is the best it’s been in history. This is the time to sell.”
Henry Raphaelson, attorney for Dave Vespucci’s landlord
Once construction is complete by the end of 2022, the complex will mainly house people earning no more than 60% of the area median income — about $47,460 for a two-person household. As with other new affordable housing developments in Massachusetts, people who submitted an application to live at the Grand Street complex were added to a lottery.
But during the recent two-month application window, more than 1,700 households applied, overwhelming Teasdale’s staff, which vets each applicant to make sure they meet the income qualifications. Teasdale said he’s never seen so many applicants for so few units in more than 30 years working with affordable housing.
He noted that although some of the applicants are from other states, most already live in Worcester. Some are homeless, living with family or friends. Others cannot afford to stay in their current apartments and rental homes.
“It’s blown our minds,” he said. “There’s going to be a lot of disappointed people, which is the sad part.”
Worcester’s housing market wasn’t always like this, said Andrew Howarth, director of development for the nonprofit Worcester Community Housing Resources. While the Boston area has long been one of the most expensive places to live in the country, Worcester remained affordable in 2014. But shortly after that Boston-based developers began migrating to Worcester, where land was cheaper and the population was growing.
Howarth said the developers saw an opportunity to build new market-rate housing and renovate existing apartments before increasing rents. In fact, Howarth remembers suddenly receiving calls in 2016 from real estate investors in Boston, saying they were interested in the Worcester market and asking him to sell them some of his housing portfolio.
“Of course, because that’s not what we do, I would say ‘no,’” Howarth said. “But they went and found other units and started scooping them up.”
Worcester city officials welcomed the developers because, until then, the city had struggled to attract private development. Since then, developers have built thousands of new units across Worcester, Howarth said. Most have been market-rate and unaffordable for many lower-income households. Instead, the new housing tailors to higher-earning workers in Worcester as well as people who work in Boston and MetroWest.
Despite its hot housing market, Worcester’s monthly median rent — $1,800 — is significantly less than Boston’s median rent of $2,950. As a result, Worcester is an attractive place to live for people who work in Boston but can’t afford to reside there.
“Boston sneezes, Worcester gets a cold,” Howarth said, describing Boston’s impact on Worcester’s housing market.
The city of Worcester could have prevented the current affordable housing crunch by forcing developers to include a minimum percentage of less expensive units in their new developments, a requirement known as inclusionary zoning.
However, Howarth said that could have been risky and scared developers away from Worcester right when the city was beginning to attract them. That’s because building units that are affordable for low- and moderate-income households isn’t always as profitable as developing all market-rate units.
To make up for that, developers can apply for state tax credits in exchange for building affordable housing. But Taylor Bearden, a partner at Civico Development, which builds both market-rate and affordable housing in Worcester, said those incentives often aren’t enough as developers face increasing construction costs. The application process for the tax credits can also be long and strenuous.
“And so there are many developers who simply do not want to introduce the level of complexity and the increase in the timeline to develop that [affordable] housing because in exchange for getting the subsidy from the state, there is significant oversight and administrative burden that is not present with the development of market-rate housing,” Bearden said.
Dave Vespucci, the tenant who’s being forced out of his Worcester duplex, never imagined he’d be at risk of homelessness. Born in Winchester, Vespucci served in the U.S. Army and enjoyed moving to new cities. He spent time in Springfield and Sturbridge, as well as New York City and Philadelphia, and never had trouble finding affordable places to live. When he settled in Worcester, apartment listings were always in the local newspaper.
“It was easy,” he said. “[Housing was] all over everywhere.”
Vespucci realized Worcester’s housing market had changed when his current landlord began threatening to kick him out in 2020. He looked for a new apartment, but after finding nothing affordable, he compromised with the landlord, Harry Kotseas. Vespucci agreed to a rent increase from $750 to $1,000 a month, and Kotseas let him get a roommate to help pay for the space.
“It’s not right. It’s just not right to do this to somebody.”
Dave Vespucci, Worcester resident
But then late last year, Kotseas sent him an eviction notice. Kotseas could not be reached for comment for this story. But his attorney, Henry Raphaelson, told GBH News Kotseas wants Vespucci out because he plans to renovate the duplex and sell it.
“The [Worcester] real estate market today is the best it’s been in history,” Raphaelson said. “This is the time to sell.”
Kotseas agreed to let Vespucci stay in the apartment until the end of January 2023, but that hasn’t eased Vespucci’s anxiety about finding a new home. Vespucci said his apartment search will be difficult because he can’t afford more than $600 in monthly rent. Many landlords also may not accept his 115-pound dog, Buddy, and Vespucci can’t live on the second or third floor of a triple-decker because he’ll struggle to climb the staircase with his bad back.
“Where do I go? What kind of place is it going to be? I can’t live in a shelter,” Vespucci said. “It’s always on your mind. … You go to bed, and when you wake up, it’s there again.”
Building more affordable housing
Worcester officials say they’re trying to address the city’s housing shortage. Last year, the city created an affordable housing trust fund, a pot of money that can be used to help finance affordable housing, renovate existing units and assist low-income homebuyers.
Now, the city is considering forcing developers to include a minimum percentage of affordable units in new housing developments via an inclusionary zoning ordinance. Worcester Chief Development Officer Peter Dunn recommends the move, noting that although hundreds of housing units are under construction or being planned across the city, most are market-rate. If the city doesn’t balance the market-rate units with less expensive ones, he said, the affordable housing shortage could worsen.
In May, Worcester’s City Council voted unanimously to hold a public hearing to further discuss inclusionary zoning. City officials say the city manager could submit an inclusionary zoning ordinance for council to review as soon as this summer.
“I will passionately and fiercely support this policy, and I hope that this is the year we actually implement it,” Councilor Etel Haxhiaj said during the May City Council meeting. “Folks that have limited incomes … people that have children — they are finding Worcester to be an extremely unaffordable city.”
Haxhiaj, who’s the public education and advocacy director for the nonprofit Central Massachusetts Housing Alliance, said Worcester could take other steps like increasing government incentives for affordable housing development. The city could also embrace density by modifying zoning rules that restrict multifamily housing in certain parts of the city.
Vespucci said those changes probably won’t take effect soon enough to help with his housing search. But he hopes they still happen, so more people don’t have to experience what he’s going through.
“It’s not right. It’s just not right to do this to somebody,” he said.
GBH News will continue to follow Dave Vespucci’s story as part of the reporting project Priced Out: The Fight For Housing In Massachusetts. Follow along at GBHNews.org/pricedout.